Payroll Done Right

Missouri Payroll Requirements: What Employers Need to Know in 2026

Missouri payroll changed significantly on January 1, 2026, when voters' approval of Proposition A took full effect. Proposition A raised the state minimum wage to $15.00 per hour — up from $12.30 in 2025 — and simultaneously introduced a mandatory paid sick leave requirement for most employers. These two changes represent the largest shift in Missouri's wage and hour landscape in years, and every employer operating in the state needs to understand both elements. The state income tax rate in 2026 is a flat 4.7%, applied to all taxable wages for Missouri residents and non-residents with Missouri-source income. Employers file the quarterly MO-941 return with the Missouri Department of Revenue to remit and reconcile withheld income tax.

Under Proposition A, employers with 15 or more employees must provide up to 56 hours of paid sick leave per year. Employers with fewer than 15 employees must provide up to 40 hours. Sick leave accrues at one hour for every 30 hours worked and may be used for the employee's own illness, a family member's illness, or absences related to domestic or sexual violence. Proposition A also preempts local governments from setting minimum wages above the new state floor — St. Louis and Kansas City cannot enact local minimums higher than $15.00. State Unemployment Insurance uses a $10,500 wage base with a new employer rate of 2.376%, for a maximum first-year SUI cost of $249.48 per worker. Learn how Missouri SUI experience rates are calculated and how Proposition A's sick leave requirements interact with existing PTO policies.

Missouri's minimum wage of $15.00 per hour applies to all covered private-sector employers beginning January 1, 2026. This is a significant jump from the prior year and requires payroll systems to be updated before the first January 2026 payroll run. Future annual increases beyond $15.00 are set by the CPI index, so the rate may adjust upward each January 1 in subsequent years. Missouri allows a tip credit: tipped employees may receive a direct cash wage of 50% of the state minimum wage per hour, provided that total hourly earnings including tips reach $15.00. If tips do not cover the shortfall, the employer must make up the difference in that workweek.

Missouri does not have a state paid family and medical leave program in 2026, which means employers only deal with the Proposition A sick leave obligation rather than a dual sick-leave-plus-PFML structure like some other states. However, the sick leave law under Proposition A is new enough that there is limited regulatory guidance on edge cases, and employers should monitor Missouri Department of Labor rulemaking through 2026 as the agency issues interpretive guidance. Read the full Missouri payroll compliance guide for Proposition A implementation guidance, sick leave recordkeeping requirements, and MO-941 filing instructions.

Final paycheck timing in Missouri requires that final wages be paid on the next regular payday following the employee's demand for payment after separation. For both discharged and resigned employees, the payment obligation is triggered by the employee's demand rather than automatically by the termination date. Missouri does not require same-day payment on discharge. New hire reporting must be submitted within 20 days of hire to the Missouri Family Support Division New Hire Reporting Center. Required information includes standard new hire data elements plus the employer's Missouri tax ID number.

For employers new to Missouri payroll, the January 2026 Proposition A changes are the most important items to have in place from day one. The flat income tax rate and moderate SUI wage base make the ongoing filing picture manageable, but the new sick leave law adds a tracking and recordkeeping layer that was not present in prior years. See the Missouri new employer registration guide for step-by-step instructions on setting up withholding and SUI accounts and configuring Proposition A sick leave tracking before your first payroll run.