“How much is minimum salary?” has two layers most people miss. There is the minimum wage — the lowest hourly rate an employer can pay — and there is a separate minimum salary threshold that decides whether a salaried worker qualifies as exempt from overtime. On top of that, the number changes dramatically depending on your state. This guide lays out the federal minimum wage as an annual salary, how state minimums differ, the salary-exempt threshold that matters for overtime, and how to convert any minimum wage into a yearly figure.
The starting point is the federal minimum wage of $7.25 per hour. Worked full-time — 40 hours a week, 52 weeks a year — that comes to about $15,080 a year before taxes. That is the federal floor, but it is rarely the whole story, because many states and cities set higher minimums, some more than double the federal rate.
Then there is a completely different figure that also goes by “minimum salary”: the threshold a salaried employee must earn to be classified as exempt from overtime pay under federal labor rules. These two numbers answer different questions — one is the lowest pay allowed, the other is the line between overtime-eligible and overtime-exempt. Below, we untangle both, show the state variation, and convert the figures into annual terms.
Convert a minimum wage into a yearly figure with our Hourly to Salary Calculator and Annual Salary Calculator — the same math this guide walks through.
What this guide covers
The federal minimum wage
The federal minimum wage, set under the Fair Labor Standards Act (FLSA), is $7.25 per hour. It is the lowest hourly rate most covered employers can legally pay, and it has been at this level for years. It applies as a national floor, but states are free to require more.
Because it is an hourly figure, its annual equivalent depends on hours worked. The standard assumption for full-time is 40 hours a week across all 52 weeks, which is the basis for the salary conversion in the next section. Note that some workers — certain tipped employees, students, and others — fall under special rules, which we touch on later.
The minimum wage as an annual salary
To express the minimum wage as a minimum salary, you annualize the hourly rate using the standard full-time schedule.
Annual = Hourly rate × Hours per week × 52
$7.25 × 40 × 52 = about $15,080So the federal minimum salary for full-time work is roughly $15,080 a year before taxes. Part-time work scales down proportionally — 30 hours a week yields about $11,310. This is exactly the hourly-to-annual conversion covered in how to convert hourly wage to annual salary, applied to the minimum rate.
How states change the number
The federal $7.25 is only a floor. Many states set higher minimum wages, and some cities go higher still. Where a state minimum exceeds the federal rate, employers must pay the higher amount.
| Minimum wage level | Approx. full-time annual salary |
|---|---|
| $7.25 (federal floor) | ≈$15,080 |
| $12.00 | ≈$24,960 |
| $15.00 | ≈$31,200 |
| $16.50 | ≈$34,320 |
Higher-cost states often have the highest minimums, so the “minimum salary” an employer must pay a full-time worker can be double the federal figure or more. To see how a specific state works, our companion guide covers the minimum salary in California, and our Illinois salary guides work through another state in detail.
The salary-exempt threshold
Here is the second, often-confused meaning of “minimum salary.” Under the FLSA, salaried employees can be classified as exempt from overtime only if they earn above a set salary threshold (and meet duties tests). Federally, that threshold has been around $684 per week — about $35,568 a year — with some states requiring more.
Why it matters: earn below the threshold and you are generally entitled to overtime pay for hours over 40 a week; earn above it and meet the duties tests, and you may be exempt. So “minimum salary” here is really the overtime line.
This threshold is separate from the minimum wage and is periodically updated. For the full picture of what exempt status means, see what does salary exempt mean and do salaried employees get overtime.
Two meanings of “minimum salary”
Because the phrase is used both ways, it helps to see them side by side. They answer different legal questions.
| Minimum wage (as salary) | Salary-exempt threshold | |
|---|---|---|
| What it is | Lowest pay allowed, annualized | Minimum salary to be overtime-exempt |
| Federal figure | ≈$15,080/year | ≈$35,568/year |
| Applies to | All covered hourly workers | Salaried employees classified as exempt |
| Question it answers | “What’s the least I can be paid?” | “Do I get overtime?” |
Keep these separate and the topic becomes clear: one is the pay floor, the other is the overtime line.
Convert any minimum wage to a salary
Whatever your local minimum wage, the conversion to an annual salary is the same simple calculation.
Use the higher of the federal, state, or local minimum that applies to you.
Typically 40 for full-time. Rate × 40 gives weekly pay.
Weekly pay × 52 gives the gross annual salary.
Use your actual weekly hours if you do not work full-time.
Minimum annual salary = Minimum wage × Weekly hours × 52Tipped and special cases
The straightforward minimum does not apply identically to everyone. A few categories have their own rules that change the effective minimum.
Tipped workers
A lower cash minimum can apply if tips bring total pay up to the standard minimum; rules vary by state.
Youth / training wage
Certain younger workers may be paid a lower rate for a limited initial period under federal rules.
Small or exempt employers
Some very small businesses or specific industries have different coverage.
Local ordinances
Cities can set minimums above the state, so check your locality.
Before or after tax?
The minimum wage and the annual salary it produces are gross, before-tax figures. Actual take-home pay is lower after payroll taxes, though very low earners often owe little or no federal income tax and may qualify for credits.
Still, FICA (Social Security and Medicare) applies to essentially all wages, so even a minimum-wage worker sees about 7.65% withheld for payroll tax. To see what any gross figure becomes after tax, our guides on how to calculate take-home salary and how to estimate salary after taxes walk through the deductions.
Mistakes to avoid
Confusing the two minimums
The pay floor (~$15,080) and the overtime-exempt threshold (~$35,568) are different figures.
Using only the federal rate
Your state or city minimum may be higher and is what applies.
Forgetting part-time scaling
Fewer hours means a lower annual figure. Use your actual hours.
Assuming it is take-home
Minimum salary is gross. Payroll taxes reduce it.
Ignoring tipped rules
Tipped and special-category pay follows different rules.
Using outdated figures
Thresholds and state minimums change. Check current rules.
Read the minimum salary in California, what salary exempt means, and do salaried employees get overtime; use the Hourly to Salary Calculator; browse the salary blog; explore all finance calculators; or visit the Waldev homepage.
Frequently asked questions
How much is the minimum salary in the US?
The federal minimum wage is $7.25 per hour, which is about $15,080 a year for full-time work (40 hours a week, 52 weeks). Many states set higher minimums, so the effective minimum salary where you live can be significantly more than the federal figure.
What is the federal minimum wage per year?
At the federal minimum wage of $7.25 an hour, full-time work of 40 hours a week for 52 weeks equals about $15,080 per year before taxes. This is the baseline, though most states have higher minimums.
Is there a minimum salary for salaried employees?
Yes. To be classified as exempt from overtime, salaried employees generally must earn at least a set salary threshold under federal rules, which has been around $684 per week (about $35,568 a year), with some states requiring more. Below the threshold, employees are typically entitled to overtime.
Does minimum wage differ by state?
Yes. States and even cities can set their own minimum wages above the federal $7.25. Some are more than double the federal rate, so the minimum salary an employer must pay depends heavily on location.
How do I convert minimum wage to an annual salary?
Multiply the hourly minimum wage by hours worked per week, then by 52 weeks. For $7.25 at 40 hours a week, that is $7.25 x 40 x 52 = about $15,080 per year before taxes.
Is minimum wage before or after tax?
Minimum wage and the resulting minimum salary are gross, before-tax figures. Take-home pay is lower after income tax, Social Security, and Medicare, though very low earners often owe little federal income tax.
The quick version
The federal minimum wage is $7.25 an hour, which annualizes to about $15,080 a year for full-time work — but many states and cities require more, so your local minimum salary can be double that or higher. Separately, “minimum salary” also refers to the salary-exempt threshold (federally around $35,568 a year) that a salaried worker must clear to be exempt from overtime. Keep the two apart: one is the lowest pay allowed, the other is the overtime line. To convert any minimum wage to a salary, multiply the hourly rate by weekly hours and by 52 — and remember it is a gross, before-tax figure.
Disclaimer: This article is for general educational purposes and is not legal advice. Minimum wages and the salary-exempt threshold change over time and vary by state, city, and industry. Confirm current figures with the US Department of Labor and your state labor agency.
The DOL publishes the federal minimum wage and the FLSA salary threshold for overtime-exempt employees.
State and local governments set minimum wages that can exceed the federal rate; check your state for the applicable figure.