Tipped Minimum Wage by State

Tipped pay by state

How the tipped minimum wage works

Under the federal Fair Labor Standards Act (FLSA), a tipped employee is someone who customarily and regularly receives more than $30 a month in tips. The employer must pay that employee a cash wage of at least $2.13 an hour and may count tips toward the rest of the $7.25 federal minimum wage. The part covered by tips is called the tip credit. It is at most $5.12 an hour, and it can never be more than the tips the employee actually received. The employer has to show, workweek by workweek, that the cash wage plus the tip credit reaches the full minimum wage. When tips fall short, the employer must make up the difference, and the U.S. Department of Labor says the extra pay is due on the regular payday for the period in which that workweek ends.

A tip credit also comes with a notice rule. Before taking it, the employer has to tell tipped employees the cash wage, the amount of the credit, that the credit cannot be more than the tips they actually receive, that they keep all of their tips except for a valid tip pool of employees who customarily receive tips, and that no credit applies to anyone who was not told these rules. An employer that skips this notice cannot take the federal tip credit. State law sits on top of all this: when state and federal rules differ, the employer must follow the one that is more protective of the employee.

How the tip credit checker works

Pick your state, then enter the cash wage your employer pays per hour, the straight-time hours you worked this week and the tips you received that week. The checker works out the cash pay the employer owes for the week: at least the state minimum cash wage, and more when your tips were too small to cover the full tip credit. Where a state sets different rates by region or type of job, a second menu appears.

The default example is a server in Texas paid $2.13 an hour who worked 30 hours and received $120.00 in tips. The tips averaged $4.00 an hour, less than the $5.12 maximum credit, so the employer can count only $4.00 an hour of tips and must pay $3.25 an hour in cash for that week. That is $97.50 instead of $63.90, which leaves $33.60 of makeup pay. With $200.00 in tips the full credit would apply and the $2.13 cash wage would be enough.

The checker covers straight-time hours, up to 40 in the week. For overtime, the Department of Labor says pay must be figured on the full minimum wage, not on the lower cash wage, and the employer cannot take a larger tip credit for an overtime hour than for a regular hour. New York, for example, requires overtime at time and a half of the minimum wage, less the tip credit. State daily and weekly overtime rules are on our overtime laws by state page.

Three groups of states

• No tip credit (7 states): Alaska, California, Minnesota, Montana, Nevada, Oregon and Washington require the full state minimum wage before tips, so tips are extra. Montana has two rates based on the business's annual sales, and Oregon has a standard rate, a higher Portland metro rate and a lower rate for nonurban counties.
• A cash wage above $2.13 (27 states and DC): Hawaii has the highest single cash wage at $14.75, followed by Arizona at $12.15 and Colorado at $12.14. In New York the cash wage depends on the job and the region, from $10.70 to $14.15. At the low end are Delaware at $2.23, Wisconsin at $2.33, West Virginia at $2.62, Arkansas at $2.63 and Pennsylvania at $2.83.
• The federal $2.13 (16 states): Alabama, Georgia, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Nebraska, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Utah, Virginia and Wyoming. Alabama, Louisiana, Mississippi, South Carolina and Tennessee have no state minimum wage law, Georgia's law does not apply to tipped employees, and the laws of Kansas, Oklahoma, Texas and Utah exclude jobs covered by the FLSA. Nebraska and Virginia have a higher full minimum wage ($15.00 and $12.77) but keep the $2.13 cash wage, which makes their tip credits large: $12.87 and $10.64 an hour.

Tip credits set as a share of the minimum wage

Several states tie the tip credit to the minimum wage, so the cash wage moves whenever the minimum wage does. Illinois and Iowa allow a credit of 40% of the minimum wage, Maine, Missouri, South Dakota and Vermont 50%, North Dakota 33% and West Virginia 70%. The District of Columbia works the other way round: employers must pay a cash wage of at least 56% of the standard minimum wage and may claim the rest as a tip credit. Michigan's cash wage is scheduled to rise each year until it reaches 50% of the state minimum wage in 2031.

State rules that change the math

• Hawaii: the $1.25 tip credit is allowed only when the cash wage plus tips is at least $7.00 an hour more than the minimum wage, so a tipped worker must end up with at least $23.00 an hour before the employer can pay less than $16.00.
• New York: only hospitality employers may take a tip credit, and the rates differ for food service workers and other service employees, and between New York City, Long Island and Westchester and the rest of the state. Service employees get the credit only in weeks when their tips average at least $3.65 an hour in restaurants and all-year hotels ($3.40 outside New York City, Long Island and Westchester), or $9.55 in resort hotels ($9.00). No credit applies on days when a tipped worker spends more than two hours, or 20% of the shift, on non-tipped work, and none in the building service industry.
• Florida: the state minimum wage rises from $14.00 to $15.00 on September 30, 2026. The tip credit stays at the 2003 federal amount of $3.02, so the cash wage for tipped employees goes from $10.98 to $11.98 on that date. The checker switches to the new rates automatically from September 30, 2026.
• Connecticut: hotel and restaurant employees get a cash wage of at least $6.38 an hour and bartenders who customarily receive tips at least $8.23, both against a $16.94 minimum wage that is adjusted every year by a set formula.
• North Carolina: the employer can take a tip credit only with a signed statement of tips received from each employee, every month or every pay period.
• Employer size and age: Ohio's $5.50 cash wage applies to employers with annual gross receipts of $405,000 or more, and the state minimum wage for smaller employers is $7.25. West Virginia's law covers employers with six or more employees. Wisconsin allows a $2.13 cash wage for tipped opportunity employees, who are under 20 and in their first 90 days with the employer. New Jersey sets a $15.23 minimum wage for employers with fewer than six employees and for seasonal jobs, and Oklahoma has lower rates for small employers that the FLSA does not cover.

Who counts as a tipped employee

The federal test is more than $30 a month in tips, and only tips the employee actually receives count, both for this test and for the tip credit. A compulsory service charge added to the bill, such as 15% of the bill, is not a tip under the FLSA. Several states use a different monthly amount: more than $20 in Massachusetts, North Carolina and Texas, more than $35 in South Dakota, more than $120 in Vermont, $135 a month in Pennsylvania and more than $191 in Maine. Many state rows in the federal table say the amount is not specified. A worker who holds two jobs with the same employer, such as a hotel maintenance worker who also serves tables, is a tipped employee only for the serving job, and no tip credit applies to the other hours.

Tipped minimum wage for all 50 states and DC

As of September 28, 2026. Figures come from the U.S. Department of Labor table of minimum wages for tipped employees, last revised July 1, 2026, with New York from the New York State Department of Labor and the Florida change from the state constitution and the Florida Department of Commerce. Scroll the table sideways on a phone.

City and county minimum wages can be higher than the state rate and are not shown, nor are special rates for minors, students and new-hire training wages. For New York the first figure is New York City, Long Island and Westchester, the second the rest of the state.

Pay, taxes and tips

Whether or not it takes a tip credit, an employer may not keep any part of its employees' tips, directly or through a tip pool. For taxes, the tip income tax calculator shows how tips are taxed on a paycheck, and our guide to the no tax on tips deduction covers the federal deduction. Bartenders can compare take-home pay with the bartender salary calculator, and the hourly paycheck calculator turns an hourly rate into a paycheck.