US State Minimum Wage 2026: Restaurant Menu Repricing Playbook

If your labor assumptions are still based on last year, your menu math is probably late. In 2026, wage floors are not a side note. They are a core pricing input.

Quick Summary

• The U.S. Department of Labor state wage page is updated to January 1, 2026.
• Federal minimum wage remains $7.25, but many states and DC are far above that level.
• Convert wage change into a per-order recovery number before touching menu prices.
• Use selective repricing by item role, not blanket percentage increases.

2026 Wage Snapshot (Why One Formula Does Not Fit All)

Examples listed on the DOL state wage page:

• District of Columbia: $17.95/hour
• Washington: $16.66/hour
• California: $16.50/hour
• New York: $17.00 (NYC/Nassau/Suffolk/Westchester), $16.00 (remainder)
• Federal baseline: $7.25/hour

The gap is too large for “national average” labor assumptions.

Step 1) Convert Wage Change to Weekly Dollar Impact

Use this:

weeklyWageDelta = hourlyIncrease x weeklyPaidHours

Example:

• Hourly increase: $1.25
• Weekly paid hours: 420

weeklyWageDelta = 1.25 x 420 = $525.00

Step 2) Add Employer On-Costs for Planning

For quick planning, include payroll tax layers:

• Employer FICA: 7.65%
• FUTA: statutory 6.0%, typically 0.6% with full credit on the first wage base

Simple planning add-on:

loadedWeeklyDelta = weeklyWageDelta x (1 + 0.0765 + 0.006)

Using the same example:

loadedWeeklyDelta = 525 x 1.0825 = $568.31

Step 3) Turn It Into a Per-Order Recovery Number

requiredRecoveryPerOrder = loadedWeeklyDelta / weeklyOrders

If weekly orders are 1,100:

$568.31 / 1,100 = $0.52 per order

If you recover 70% by pricing and 30% by labor/productivity improvements:

priceRecoveryPerOrder = 0.52 x 0.70 = $0.36

This is a cleaner target than “raise prices 5% and hope.”

Where to Raise First (Without Blunt Increases)

1. Raise premium add-ons first (extra protein, specialty toppings, bundle upgrades).
2. Move low-visibility price points (items with lower sensitivity).
3. Keep one or two known traffic items stable to preserve perceived value.
4. Re-check delivery channel prices separately from dine-in/pickup.

The goal is controlled recovery, not uniform sticker shock.

4-Week Rollout Checklist

• Rebuild each store’s labor baseline using the applicable local wage.
• Compute per-order recovery target.
• Apply selective repricing by item role.
• Align POS, online ordering, and third-party menus on one effective date.
• Give staff one consistent explanation script.
• Track labor %, average check, and order count weekly.
• Adjust again after week 2 and week 4 if recovery is short.

Script You Can Use at the Counter

We updated a few prices this week to keep staffing levels and product quality consistent.
If you want, I can show you the best-value combo options.

Short and calm usually works better than long justifications.

Related Guides

• US Restaurant Labor Cost Calculator
• US Menu Pricing Calculator
• US Menu Price Increase Notice Template (2026)
• US Restaurant Pricing Audit Checklist

Sources (checked on 2026-02-14)

• U.S. Department of Labor - Minimum Wage Laws in the States
• IRS Publication 15 (Employer’s Tax Guide)
• IRS Topic No. 756 (FUTA rate and wage base reference)
• NFIB: Small Business Optimism Increases for Second Consecutive Month (Jan 2026 release)
• BLS CPI News Release (January 2026)

KitchenCost helps multi-location operators apply wage-driven repricing by recipe and channel in one workflow.