Costco $20 rule explained as employee pay climbs across North America

The Costco $20 rule is changing again as the retailer moves ahead with a new pay increase that raises its minimum hourly wage to $21 starting next month.

Costco workers who already earn $20 an hour are set to receive a $1 raise under an employee agreement that first took effect last year.

That deal lifted base wages to $20 an hour and pushed the average hourly pay across the United States and Canada to about $31.

The agreement also promises another $1 hourly increse scheduled for March 2027 .

The updated pay structure means first year employees now receive paid vacation benefits, while long serving workers with 30 years at the company can take up to six weeks off each year.

The wage boost comes as major retailers compete to attract staff. Walmart has recently raised salaries for thousands of pharmacy leaders, while other chains such as Target, Lowe’s and Trader Joe’s continue to adjust their pay scales.

Starting wages at Target typically begin around $21 an hour, while Lowe’s ranges between $19 and $27 depending on location.

Trader Joe’s average hourly pay is close to $19.95, with some roles reaching over $30.