2025 Colorado Minimum Wage Guide: Key Laws and Changes Explained

Colorado’s minimum wage is getting a boost in 2025, continuing its annual climb to help workers keep up with the rising cost of living. For non-tipped employees, the statewide rate jumps to $14.81 per hour—up 39 cents from 2024. Tipped workers will see their base pay rise to $11.79 per hour. 

These adjustments are automatic and tied to inflation, ensuring wages grow alongside everyday expenses like housing and groceries. However, not every city follows the same rules. Places like Denver, Boulder, and Edgewater have set even higher local rates.

This guide breaks down what you need to know about Colorado’s minimum wage laws, from how rates are calculated to what these changes mean for workers and businesses. Whether you’re an employer updating payroll or an employee tracking your rights, staying informed helps everyone navigate these shifts confidently. Let’s dive into the details.

What’s New in 2025?

Colorado’s minimum wage increases are rooted in a 2010 law that links annual adjustments to the Consumer Price Index (CPI), a measure of inflation. For 2025, the 2.7% bump means full-time workers could earn about $811 more per year before taxes. 

Tipped employees also get a raise, though their base pay stays $3.02 below the standard rate, assuming tips cover the gap. Employers must ensure tipped workers’ combined wages and tips meet or exceed the full minimum wage.

Local governments have the power to set higher rates, and many do. Denver leads the state with a 2025 minimum wage of $18.81 for non-tipped workers and $15.79 for tipped workers. Boulder County follows at $16.57, while Edgewater sets its rate at $16.52. These differences highlight how cities tailor wages to local living costs—a recognition that surviving in Denver’s bustling economy isn’t the same as in smaller towns.

How Did We Get Here?

Colorado’s minimum wage has evolved dramatically since its start at $0.35 per hour in 1935. Major milestones include a 2006 voter-approved hike to $6.85 and a 2016 constitutional amendment that set a path to $12 by 2020. Today’s system balances automatic inflation adjustments with flexibility for cities to address their own needs. 

Over 260,000 workers statewide benefit directly or indirectly from these increases, which also push up wages for those earning slightly above minimum wage.

Businesses, especially small ones, often voice concerns about rising labor costs. Some argue yearly increases strain budgets, particularly in industries like restaurants and retail. In 2024, over 200 Denver restaurants closed, sparking debates about how wages factor into these challenges. However, studies in cities like Denver show higher wages can boost local economies by increasing consumer spending and reducing employee turnover.

What This Means for You

For workers, higher wages mean more financial breathing room. A full-time employee earning Colorado’s 2025 rate will make about $30,800 annually before taxes—still below what’s considered a living wage in pricier areas but a step closer to stability. Tipped workers gain added security, though reliance on tips remains a pain point.

For employers, compliance is key. Payroll budgets need to account for not just hourly rates but also overtime (1.5x pay after 12 hours daily or 40 hours weekly). Businesses in cities with local wages must track multiple rates, which can complicate multi-location operations. While some employers worry about cutting hours or raising prices, others find that better pay attracts reliable staff and improves service quality.

Looking Ahead

Colorado’s minimum wage will keep rising with inflation, but debates continue about whether these increases truly match living costs. Advocacy groups argue for steeper hikes, pointing to soaring housing and healthcare expenses. Meanwhile, policymakers balance worker needs with economic growth, ensuring Colorado remains a place where both businesses and families can thrive.