Based on the behavior of factors input in private enterprises, this paper explores the impact of the minimum wage system on the share of labor income in private enterprises. The panel data of private enterprises from 2005—2008 and 2011—2013 show that the minimum wage system improves the labor income share of private enterprises in laborintensive and capitalintensive industries, and reduces the labor income share of technologyintensive private enterprises. The influence of the minimum wage system on the share of labor income in private enterprises is mainly realized indirectly through the two mechanisms of wage level and capitallabor ratio. Through the decomposition of the impact mechanism, it is found that the minimum wage system significantly improves the wage level of laborintensive and capitalintensive private enterprises, bringing about significant income effect, but it also leads to capital substitution for labor, resulting in significant negative substitution effect. Overall, the minimum wage system has significantly increased the share of labor income in private enterprises. Therefore, in order to give full play to the positive effect of the minimum wage system on the share of labor income in private enterprises, it is important to continue to adjust the minimum wage standard, implement relevant laws and regulations, and improve the skill level of workers.