2018 Federal Tipped Minimum Wage
The 2018 Federal Tipped Minimum Wage is $2.13.
Effective 2018-01-01Source: Minimum Wages for Tipped Employees (DOL)Verified 2026-08-30
Compared with 2017
Every figure on this page is unchanged from 2017.
| Item | 2017 | 2018 | Change |
|---|---|---|---|
| Minimum cash wage | $2.13 | $2.13 | +$0 (+0.0%) |
Who it applies to
Employers of tipped employees covered by the federal Fair Labor Standards Act. The cash wage is the part of the minimum wage the employer pays directly; the rest may be met by the employee's tips, up to the maximum tip credit the same row of the table states beside it.
What changed this year, and why
The Wage and Hour Division's table of minimum wages for tipped employees for 2018, last revised on January 1, 2018, gives $2.13 per hour as the minimum cash wage an employer may pay a tipped employee under the federal Fair Labor Standards Act. The table carries only its own revision date and never dates the rate, so this page reports the figure as in force as of that revision rather than claiming an effective date no document states.
Common questions
- What was the federal tipped minimum cash wage in 2018?
- $2.13 per hour. The Department of Labor's table of minimum wages for tipped employees for 2018, last revised on January 1, 2018, gives that amount as the minimum cash wage under the Fair Labor Standards Act, with the remainder of the federal minimum wage able to be met by tips up to the maximum tip credit the same row states.
- What if tips did not bring the employee up to the full minimum wage?
- The employer paid the difference. A tip credit is a credit against the minimum wage the employer already owes, not a lower wage in its own right, so an employee whose cash wage and tips together fell short of the applicable minimum wage was owed the shortfall in wages.
- Where does the figure on this page come from?
- From the Wage and Hour Division's own archived table Minimum Wages for Tipped Employees for 2018, last revised on January 1, 2018. The federal row it was read from is quoted on this page, and the snapshot it was verified against is the one captured for this record.
Who counts as a tipped employee
Under federal law, a tipped employee is someone who works in an occupation where they customarily and regularly receive more than $30 a month in tips. This threshold determines whether an employer can pay the lower cash wage and take a tip credit toward the minimum wage obligation. If you work in a role where tips are customary and you regularly earn more than $30 per month from them, you qualify as a tipped employee under the FLSA. This status allows your employer to pay you the federal minimum cash wage of $2.13 per hour instead of the full minimum wage, with the expectation that your tips will make up the difference. Only the tips you actually receive count toward this determination. If you do not meet this definition, your employer must pay you the full minimum wage without taking advantage of the tip credit provisions.
Under the FLSA, a tipped employee is an employee engaged in an occupation in which they customarily and regularly receive more than $30 a month in tips.
Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act (FLSA) (DOL)
What a tip credit is, and the cash wage underneath it
Under federal law, the FLSA permits an employer to take a tip credit toward its minimum wage obligation for tipped employees. The tip credit equals the difference between the direct cash wage the employer pays the tipped employee and the federal minimum wage, which is currently $7.25 per hour. The employer must still pay the employee a minimum cash wage of at least $2.13 per hour directly. This means that your employer counts a portion of the tips you receive toward meeting its minimum wage obligation, while paying you no less than $2.13 per hour in cash wages. The credit is limited to the gap between what the employer pays you in cash and the full minimum wage. The employer must be able to show that your cash wages plus the tip credit together reach the full minimum wage. If they do not, the employer must make up the shortfall. Only tips you actually received count for this purpose.
An employer can take an FLSA tip credit equal to the difference between the direct wage, or the cash wage it pays directly to the tipped employee, and the federal minimum wage, which is currently $7.25 per hour.
Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act (FLSA) (DOL)
When the tips do not get you to the minimum wage
In Federal jurisdiction, even when an employer takes a tip credit and pays the minimum cash wage of $2.13 per hour, there is a safety net. If an employee's tips combined with the employer's direct (or cash) wages do not equal the minimum hourly wage of $7.25 per hour in each workweek, the employer must make up the difference. This means that every workweek, your employer must look at the total of your direct wages plus your tips. If that total falls below $7.25 per hour on average, your employer is required to pay you the shortfall out of its own funds. You cannot be left earning less than the minimum wage simply because your tips were low during a particular week. The employer bears this risk, not the employee. This obligation applies each and every workweek, so slow periods are covered just as much as busy ones.
If an employee’s tips combined with the employer’s direct (or cash) wages do not equal the minimum hourly wage of $7.25 per hour in each workweek, the employer must make up the difference.
Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act (FLSA) (DOL)
The notice an employer owes you before it takes the credit
In Federal jurisdiction, before an employer can take a tip credit against its minimum wage obligation, it must provide the tipped employee with specific information. The employer must tell the employee the amount of the cash wage it is paying (which must be at least $2.13 per hour), the additional amount it is claiming as a tip credit, that the tip credit cannot exceed the tips the employee actually receives, that the employee retains all tips except those contributed to a valid tip pool, and that the tip credit will not apply unless the employee has been informed of these provisions. The notice may be oral or written. If the employer fails to provide this required information, it cannot take the tip credit at all, meaning it must pay the full federal minimum wage without counting any tips toward that obligation. This ensures tipped employees understand how their wages are calculated before the lower cash wage takes effect.
An employer that fails to provide the required information cannot take the section 3(m)(2)(A) tip credit.
Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act (FLSA) (DOL)
When state law gives more than the federal rule
In Federal jurisdiction, when a state law differs from the federal FLSA, the employer must comply with whichever standard is most protective to employees. For example, some states require a higher cash wage than the federal direct (or cash) wage of $2.13 per hour, and some states prohibit the taking of a tip credit altogether. When the state standard offers greater protection, such as a higher cash wage or a full minimum wage with no tip credit allowed, the employer must follow the state rule rather than the federal one. This means that even though the federal FLSA allows a cash wage of $2.13 per hour with a tip credit, if your state requires a higher cash wage or does not permit a tip credit at all, you are entitled to the more generous state benefit. The employer is obligated to follow whichever law gives you the better result.
When state law differs from the federal FLSA, an employer must comply with the standard most protective to employees.
Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act (FLSA) (DOL)
Your employer, your manager and your supervisor may not keep your tips
In Federal jurisdiction, regardless of whether an employer takes a tip credit, the FLSA prohibits employers from keeping any portion of employees' tips for any purpose, whether directly or through a tip pool. This means your tips belong to you, not to your employer. An employer may not require you to hand over your tips, may not take a cut for itself, and may not use a tip pool as a way to funnel your tips to the business. This rule applies even if the employer pays you the full federal minimum wage without taking any tip credit. Your employer's managers and supervisors are also barred from keeping your tips or participating in a tip pool. The only tips a manager or supervisor may keep are those they receive directly from customers for service they personally and solely provided. This protection ensures that the tips customers intend for you stay with you.
Regardless of whether an employer takes a tip credit, the FLSA prohibits employers from keeping any portion of employees’ tips for any purpose, whether directly or through a tip pool.
Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act (FLSA) (DOL)
Which tip pools you can be made to join
In Federal jurisdiction, when an employer takes a tip credit, it can require tipped employees to contribute tips only to a tip pool which is limited to employees in occupations in which they customarily and regularly receive tips. This is sometimes known as a "traditional" tip pool. Eligible participants typically include waiters, bellhops, counter personnel who serve customers, bussers, and service bartenders. The employer cannot include non-tipped employees such as cooks or dishwashers in this type of pool. The FLSA does not limit the percentage or amount you must contribute to a valid tip pool, but the employer must notify you of any required contribution amount, can only take a tip credit for tips you ultimately retain, and cannot keep any tips from the pool for itself. Managers and supervisors are also barred from receiving tips from a traditional tip pool. If your employer pays you the full minimum wage without taking a tip credit, different rules may allow a broader pool.
to a tip pool which is limited to employees in occupations in which they customarily and regularly receive tips
Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act (FLSA) (DOL)
Doing two jobs for one employer
In Federal jurisdiction, when you work in two different jobs for the same employer, your status as a tipped employee applies only to the occupation where you customarily and regularly receive tips. For example, if you work as both a server and a maintenance person at a hotel, and you meet the tipped employee threshold for your server work, you are a tipped employee only with respect to your employment as a server. Your employer can take a tip credit for the hours you work as a server, paying you the minimum cash wage of $2.13 per hour for those hours. However, for the hours you work as a maintenance person, no tip credit can be taken, and your employer must pay you the full minimum wage. The employer must keep separate records of the hours you spend in each occupation and the wages earned in each. Related duties that are part of your tipped occupation, such as a server cleaning tables or making coffee, do not create a separate non-tipped job.
is a tipped employee only with respect to their employment as a server
Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act (FLSA) (DOL)
How each figure was verified
Each number below was read from a stored copy of the document named beside it, and checked to occur word for word in the quoted sentence. The digest is of that stored text.
Minimum Wages for Tipped Employees (DOL)
- Minimum cash wage
FEDERAL: Fair Labor Standards Act (FLSA) $7.25 $5.12 $2.13 More than $30
Other years
Every Federal Tipped Minimum Wage year · Tipped Minimum Wage in every state