What’s the Minimum Wage for Tipped Employees By State?
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Updated on Jan. 2.
On Jan. 1, 2025, many new state and local tipped minimum wages went into effect. See the chart below for all state increases.
Working out the minimum wage for workers who receive tips, such as food servers, can be complex. Tipped employees include those who rely on tips from customers to supplement their wages. A tipped employee typically receives more than $30 per month in tips, according to the Department of Labor.
What is a cash wage?
Tipped employees must receive a minimum wage of $2.13 per hour, known as a cash wage. That cash wage is combined with tips to reach the federal minimum wage of $7.25 per hour. (Many states and localities, listed below, have minimum wages set above the federal rate).
» MORE: What is the minimum wage?
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What is a tip credit?
Tips are considered a “tip credit,” which allows employers to pay employees below the federal minimum wage.
Employers can credit up to $5.12 per hour in tips against a worker's earnings. If an employee’s wages (at least $2.13 per hour) plus tips is less than $7.25 per hour, their employer is required to make up the difference.
Are tips taxed?
Tips are taxed as income. While campaigning, President-elect Donald Trump promised to create a “no tax on tips” policy.
Tipped minimum wages by state
Minimum tipped wages and maximum tip credits vary by state and even city.
*Some cities have separate tipped minimum wages and they're typically higher than state tipped minimums. Most are listed above with the exception of California and Washington.
