Adults in Guernsey will be paid at least £12 an hour from October 2024.
The States of Guernsey have approved plans from the Committee for Employment and Social Security to increase both the adult and young persons minimum wage.
From 1 October 2024, people over the age of 18 will be paid at least £12 an hour, an increase of £1.35 from the current minimum wage.
Meanwhile, under-18s will receive £1.15 more, taking their hourly rate to £10.80.
Jersey's minimum wage is due to rise to £13 in April 2025.
Guernsey's Deputy Sue Aldwell says keeping the minimum rate too low would be damaging to industry.
"We have much-needed people coming to work here in hospitality or retail. Will they come here and earn £60 pound less than Jersey next year? I don't think so."

Alderney airlinks "operating as usual" following disruption
Guernsey's Wildlife Hospital nears completion
Guernsey's 50th Swimarathon raises more than £70,000
Scheme to help Guernsey residents cover rental deposits
Guernsey Town scaffolding causes problems for visually impaired
Guernsey charity sees more 'in work' families requesting help
Guernsey deputy backs pavement speed limit
Survey reveals islanders’ concerns over misogyny and body image