The January 1, 2027 minimum wage increases and what they change in a cleaning company's books

Reviewed by Dave Gordon, Certified QuickBooks Online ProAdvisor (Intuit). Last reviewed October 2026.

Minimum wages rise on January 1, 2027 in states including California, to $17.40, and Washington, to $17.73, and in cities such as Seattle. In a cleaning company's books, the change reaches the payroll rate table, the labor cost on each job, and the employer payroll tax line.

The 2027 rate notices are written for compliance. Here's the new number, here's the date, hang the poster. For a cleaning company that's half of it. The other half shows up in your books in January, in the hourly rate your payroll service has stored for every cleaner, in the labor cost sitting on every recurring job, and in the commercial contracts you priced when 2026 wages were the only ones anyone had.

This post does two things. It lays out which state and city rates actually move on January 1, with the official source for each one, and then it walks through where that change lands in the numbers. What you pay and how you file stay with your payroll provider and your CPA. Where the change gets recorded is my side of it.

Which states raise their minimum wage on January 1, 2027?

As of October 2026, California, Connecticut, Maine, Michigan, Minnesota, Montana, Nebraska, New Jersey, Ohio, Rhode Island, South Dakota, Virginia, and Washington have announced minimum wage increases effective January 1, 2027. Colorado has announced a 2027 rate of $15.71 an hour.

Exception: The table shows general rates, with tipped figures only where listed; other special rates, New Jersey's $15.00 farm labor rate, and city minimum wages are separate, and Colorado's $15.71 is stated for 2027 without an effective date confirmed for this post.

According to the Minnesota notice of the January 1, 2027 inflation adjustment, Minnesota Department of Labor and Industry, as of October 2026.

Every fall I read these notices against one list: the states where a client actually has people working. A raise in a state where you have no crews is just news. Which New Jersey rate is yours, $16.48 or $16.25? That turns on how many employees you have and whether you count as a seasonal employer, and it's a question for your payroll provider or a CPA, not for me. Once they confirm it, I make sure the rate sitting in your books matches and note the date it changed, so January's numbers tie out. Arizona and Vermont go on my December calendar, since neither state's labor agency had a 2027 figure posted when I wrote this.

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Which cities raise their own minimum wage on January 1, 2027?

As of October 2026, Seattle, Minneapolis, San Jose, Palo Alto, Flagstaff, Boulder, Albuquerque, Santa Fe, Renton, Everett, and Portland, Maine have posted city minimum wage rates that take effect January 1, 2027. Chicago, Berkeley, Santa Monica, Pasadena, and Emeryville adjust their city rates on July 1 instead.

Exception: The city minimum wage pages for Tucson, Bellingham, Mountain View, Sunnyvale, Santa Clara, Oakland, West Hollywood, and Las Cruces did not show a 2027 rate as of October 21, 2026, and the Nebraska Attorney General has sued over the 2026 city wage ordinances in Omaha and Lincoln; whether either ordinance is in effect, or what it requires in 2027, is not established by the sources checked.

According to the Seattle minimum wage ordinance page, City of Seattle Office of Labor Standards, as of October 2026.

City rates are where I see payroll drift away from the schedule. Palo Alto's page says it plainly: the city rate is owed for the hours worked in Palo Alto. A cleaner who spends Monday there and Tuesday in a city without its own ordinance works under two rates in one week, and the paycheck is only right if the hours carry a location. I want to tie every single hour on a paycheck back to the job address it was worked at, because that's how I reconcile payroll to the schedule and catch Seattle hours paid at the Washington rate before your cleaner does. If your scheduling app doesn't record the job address, start there before January.

The July 1 schedules are covered city by city in the notes for cleaning companies in Chicago and cleaning companies in Berkeley.

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What changes in a cleaning company's books when the minimum wage goes up?

In bookkeeping terms, a minimum wage increase reaches four places: the pay rates stored in the payroll system, the labor cost recorded on each job, the employer payroll tax line, and the margin on contracts priced before the increase.

• In my experience, the rate table changes first: each affected employee's hourly rate in the payroll service, updated to the new figure, such as Washington's $17.73, before the first pay run that covers January 1 hours.
• What I see in the books next is job costing: for a cleaner paid the Michigan minimum, the same recurring job carries more labor cost at $15.00 an hour from January 1, 2027 than it did at $13.73.
• In my experience, the employer payroll tax line moves with the wage line; which taxes apply, what wages they are figured on, and at what rates is a question for a CPA or the payroll provider.
• What I see on recurring commercial contracts is a price set on 2026 labor that keeps billing at the 2026 amount until someone changes it, which shows up as a smaller margin on that contract.

Exception: Which rate applies to which employee, and what payroll taxes are owed on it, are questions for a CPA or the payroll provider; this section covers where the change is recorded, not what to pay or file.

According to the 2027 Washington minimum wage announcement, Washington Department of Labor & Industries, as of October 2026.

The contract is the part that catches people. Let's say you run a catering company and last fall you signed an office for lunch every Friday through next year, at a price built on the wages you paid then. Nothing about Friday changes in January. Same trays, same two servers, same hours. But if those servers' pay goes up on January 1, every Friday after that costs more to deliver at the same price, and the only place it shows is the job report. A recurring commercial cleaning contract is that Friday lunch. I record the labor against each contract at the new rate and put the before and after side by side, contract by contract, so you can see which buildings it touches. What you charge is your decision. My part is making sure the number you decide with is right.

For a rough look at one job's margin, try the job profitability estimator, and for the month-to-month side, here's how I handle payroll bookkeeping for cleaning companies.

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Which states have no minimum wage change on January 1, 2027?

As of October 2026, states at the federal $7.25 rate, such as Alabama, Georgia, and Tennessee, had no minimum wage change announced for January 1, 2027. Alaska, the District of Columbia, and Oregon change their rates on July 1, 2027 instead.

• The U.S. Department of Labor state table shows no state minimum wage law in Alabama, Louisiana, Mississippi, and Tennessee, so the federal $7.25 applies there, with no change announced as of October 20, 2026.
• Georgia, Idaho, Iowa, Kansas, Kentucky, New Hampshire, North Carolina, North Dakota, Oklahoma, and Texas are at $7.25 with no change announced as of October 20, 2026.
• Delaware, Massachusetts, and Missouri stay at $15.00 and West Virginia at $8.75, with no change announced as of October 20, 2026; Maryland's state rate is $15.00 with none announced, while Montgomery County rates rise each July 1 by CPI.
• Hawaii is at $16.00, and its next announced change is $18.00 on January 1, 2028.
• Alaska rises from $14.00 to $15.00 on July 1, 2027; the District of Columbia's next CPI adjustment is due July 1, 2027; and Oregon's July 1, 2027 CPI adjustment amount was not announced as of October 20, 2026.

Exception: States whose 2027 status was not confirmed for this post, such as Florida, Illinois, Indiana, New Mexico, Pennsylvania, South Carolina, and Utah, are left off this list; check with the state labor department or your payroll provider.

According to the state minimum wage table, U.S. Department of Labor, as of October 2026.

If every crew you run works in Georgia, Texas, or North Carolina, no new state rate had been announced for January 1 when I wrote this. Nothing to update. No new rate. The date I'd circle instead is July 1, 2027, if you have anyone in Alaska, D.C., or Oregon, because a midyear change lands in the middle of contracts you priced in the winter and it's easy to miss when the schedule is full. I keep those on the same calendar as the January ones, and I'd suggest you do the same.

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Get the 2027 rates into your books before the first January payroll

If your crews work in more than one of the states or cities above, the rate table and the job costing report are worth looking at together before the holidays, while there's still time to fix a rate before it hits a paycheck. I'm glad to go through yours with you, and the first conversation doesn't cost anything. Book 30 minutes with me or call me at (919)-460-5383.

About the author

Dave Gordon is the founder of Figure Eight Financial and a Certified QuickBooks Online ProAdvisor (Intuit). He keeps the books for residential and commercial cleaning companies across the United States, working from Morrisville, North Carolina, in the Raleigh area since 2002. He holds a B.S. in Computer Science from Penn State and an MBA from Duke University, and began his career at IBM before moving into management and then bookkeeping.

Figure Eight Financial provides bookkeeping services. Dave Gordon is a bookkeeper and is not a Certified Public Accountant or an Enrolled Agent. Nothing here is tax advice, a filing position, or a recommendation about which minimum wage rate applies to your business or what to pay your employees. Those determinations belong to a CPA, an Enrolled Agent, or an attorney, and this practice works alongside them rather than in place of them.