2021 Federal Tipped Minimum Wage
The 2021 Federal Tipped Minimum Wage is $2.13.
Effective 2021-01-01Source: Minimum Wages for Tipped Employees (DOL)Verified 2026-08-30
Compared with 2020
Every figure on this page is unchanged from 2020.
| Item | 2020 | 2021 | 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 2021, last revised on September 30, 2021, 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 2021?
- $2.13 per hour. The Department of Labor's table of minimum wages for tipped employees for 2021, last revised on September 30, 2021, 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 2021, last revised on September 30, 2021. 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 person counts as a tipped employee when they work in an occupation where tips are customary and they actually collect more than $30 in tips during a typical month. Only tips the worker actually receives are counted toward that threshold. If the employee's tips fall below that amount in some months, they are not a tipped employee for that period, and the employer cannot use the tip credit for the time they do not qualify. The cash wage floor of $2.13 per hour therefore applies only during periods when the worker meets this definition. Employers must track tip receipts each month to know whether the worker still qualifies, and cannot simply label someone a tipped employee based on the job title alone.
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, an employer that takes a tip credit must pay the tipped employee a direct cash wage of at least $2.13 per hour. The tip credit is the gap between that cash wage and the federal minimum wage of $7.25 per hour. The employer counts the employee's tips toward covering that gap, so that cash wages plus tips together meet the minimum wage each workweek. Only tips the employee actually receives count—estimated or unreported tips cannot be used. If the cash wage plus the tips fall short of the minimum wage in any workweek, the employer must add the shortfall to that week's pay. The tip credit is a mechanism that lets employers offset part of the minimum wage obligation with the employee's tip income, but the cash floor of $2.13 per hour still applies regardless of how much the employee earns in tips.
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
Under federal law, if a tipped employee's tips plus the employer's direct cash wages do not add up to the full minimum wage in a given workweek, the employer must pay the shortfall out of its own funds. This obligation applies every single workweek without exception—it is not averaged over a pay period or month. The employer cannot carry over a deficit from one slow week to a busier one. For example, if business is slow and the employee earns few tips during a particular week, the employer must still ensure the employee's total compensation reaches the minimum wage for that week, and must add the missing amount to the employee's paycheck on the regular payday. This rule protects tipped workers from income fluctuations and places the risk of slow periods on the employer rather than the employee.
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
Under federal law, before an employer can take a tip credit, it must give the tipped employee advance notice of the tip credit provisions. The notice must inform the employee of the cash wage being paid (at least $2.13 per hour), the amount of the tip credit being claimed, that the credit cannot exceed actual tips received, that the employee keeps all tips except for valid tip pool contributions, and that the credit will not apply unless the employee has been told all of this. The notice can be oral or written, but it must come before the employer starts using the tip credit. If the employer fails to give this notice, it cannot take the tip credit at all and must pay the full minimum wage from its own funds. This requirement ensures that tipped workers know how their wages are being calculated and what rights they have under the FLSA.
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
Under federal law, when a state's tipped wage rules differ from the federal FLSA, the employer must follow whichever rule is more protective of the employee. This means that even though the federal cash wage is $2.13 per hour, if a state requires a higher cash wage or prohibits the tip credit entirely, the employer must comply with the state's more generous standard. For workers in the federal jurisdiction, the FLSA rules apply directly—the $2.13 minimum cash wage and the tip credit provisions set the baseline. But the principle is important because many states have their own tipped wage laws that may offer stronger protections, and employers operating in multiple jurisdictions must apply the most favorable rule to each employee. The federal standard of $2.13 per hour in cash wages is the floor, not the ceiling, and employees are entitled to whichever regime—federal or state—gives them higher pay or greater protections.
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
Under federal law, employers may not keep any portion of a tipped employee's tips, regardless of whether the employer takes a tip credit. This prohibition applies to the employer itself, as well as to managers and supervisors. An employer cannot require an employee to hand over their tips, even if the employer pays the employee the full federal minimum wage in cash and does not use the tip credit at all. The rule also applies whether the employer tries to take the tips directly or indirectly through a tip pool arrangement. This protection ensures that tips remain the property of the worker who earned them from customers. Managers and supervisors are specifically excluded from participating in tip pools or receiving any share of other employees' tips, though a manager may keep tips they personally receive from customers for service they directly and solely provided themselves.
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
Under federal law, when an employer takes a tip credit, it can only require tipped employees to contribute to a traditional tip pool that is limited to workers in occupations where they customarily and regularly receive tips. Examples of eligible occupations include waiters, bellhops, counter personnel who serve customers, bussers, and service bartenders. The employer cannot include non-tipped workers like dishwashers or cooks in a traditional tip pool. The employer must also notify tipped employees of any required contribution amount, can only claim a tip credit based on the tips each employee actually retains after the pool distribution, and cannot keep any tips from the pool for itself. Managers and supervisors are excluded from participating in traditional tip pools. This rule ensures that when the employer pays the reduced cash wage of $2.13 per hour, tip pooling arrangements remain fair and benefit only those workers whose regular income includes tips from customers.
to a tip pool which is limited to employees in occupations in which they customarily and regularly receive tips, such as waiters, bellhops, counter personnel (who serve customers), bussers, and service bartenders.
Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act (FLSA) (DOL)
Doing two jobs for one employer
Under federal law, when an employee works in two distinct occupations for the same employer, they are considered a tipped employee only for the occupation in which they customarily and regularly receive more than $30 a month in tips. For example, if a hotel maintenance worker also works as a server and receives tips for their serving work, the tip credit applies only to the hours spent as a server. The employer cannot apply the tip credit to the hours the employee spends doing maintenance work, even if the employee's total tips across both roles exceed $30 per month. For the non-tipped occupation, the employer must pay the full federal minimum wage in cash. This rule prevents employers from using the reduced cash wage of $2.13 per hour for work that does not generate tips. The key distinction is between dual jobs (separate occupations) and related duties within a single tipped occupation—a server who occasionally cleans tables or makes coffee is still performing tipped occupation duties, whereas working in a completely different role is a separate job.
In such a situation the employee, if they customarily and regularly receive at least $30 a month in tips for their work as a server, 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