State Minimum Wages in 2025: A Wide Spectrum
The federal minimum wage of $7.25 per hour has not changed since 2009, making it one of the longest stretches without an increase in US history. Most workers, however, are covered by state or local minimum wages that exceed the federal floor. As of 2025, more than 30 states have minimum wages above $7.25, with Washington D.C. leading at $17.50 per hour and states like California ($16.50), Washington ($16.28), and Connecticut ($16.35) among the highest statewide rates. At $7.25 and working 40 hours per week, 52 weeks per year, a full-time minimum wage worker earns $15,080 annually — barely above the federal poverty line for a single person.
Many cities have gone further than their states, setting local minimum wages even higher. Seattle, New York City, and San Francisco maintain minimums above their state rates. If you work in a city with a higher local ordinance than your state, your employer must pay the higher of the two. The rates in this calculator reflect statewide minimums; your actual minimum may be higher depending on your municipality.
Minimum Wage vs. Living Wage: The Gap That Matters
A living wage is the minimum income necessary to meet basic needs — housing, food, transportation, healthcare, and minimal discretionary spending — without public assistance. MIT's Living Wage Calculator, which estimates living wages by county across the US, consistently finds that minimum wages fall well short of living wages in virtually every state. For a single adult with no dependents, the gap between minimum wage and living wage ranges from under $3/hour in states like Washington and California to over $13/hour in states like Mississippi and Alabama where low state minimums meet moderate housing costs.
The gap widens dramatically with dependents. A single parent supporting one child typically needs a living wage of $30–$40 per hour in most metro areas — two to four times the minimum wage. This calculator uses MIT Living Wage data estimates for a single adult with no dependents, which represents the most favorable scenario. Workers supporting families on minimum wage face substantially larger gaps.
Taxes on Minimum Wage Income
Minimum wage earners owe federal income taxes only on income above the standard deduction ($15,000 for single filers in 2025), which means a full-time minimum wage worker at the federal rate of $7.25 per hour earns only $15,080 annually — just $80 above the standard deduction. After the standard deduction, federal income tax liability is minimal. However, FICA taxes (Social Security at 6.2% and Medicare at 1.45%) apply to all earned income from the first dollar, reducing take-home pay by 7.65% regardless of income level. At $15,080 annually, FICA costs a minimum wage worker approximately $1,154 per year. Most states also have their own income taxes, though many exempt very low incomes.
Part-Time vs. Full-Time Minimum Wage Work
Many minimum wage jobs are part-time, which reduces both gross income and access to employer-sponsored benefits. An employee working 25 hours per week at $15/hour earns $19,500 annually, while the same hourly rate at 40 hours yields $31,200. The income difference is proportional, but the benefit difference can be far larger — many employers only offer health insurance to employees working over 30 hours per week. This calculator lets you adjust both hours per week and weeks per year to model any work arrangement, including seasonal employment and jobs with planned vacation time built in (try 50 weeks if you take a 2-week unpaid vacation).
Using Minimum Wage Income as a Budget Baseline
For workers earning minimum wage or near it, understanding your exact income across all time periods helps in budgeting. Monthly income is the most practical figure for rent and bill management, while annual income matters for tax filing and benefit eligibility. The 50/30/20 budget rule becomes difficult on minimum wage — housing costs alone often exceed 50% of gross income in most markets, leaving little room for savings. Many financial counselors suggest minimum wage workers prioritize building even a small emergency fund before any other savings goal, since unexpected expenses are the primary trigger for high-interest debt that traps people in financial hardship.