2026 Federal Tipped Minimum Wage
The 2026 Federal Tipped Minimum Wage is $2.13.
Effective 2026-01-01Source: Minimum Wages for Tipped Employees (DOL)Verified 2026-08-30
Who it applies to
Employers of tipped employees under 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, and the table sets out separately how much an employee must receive in tips to count as a tipped employee at all.
What changed this year, and why
The Wage and Hour Division's table of minimum wages for tipped employees, in the version last revised July 1, 2026, 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 is the tipped minimum wage under the federal Fair Labor Standards Act in 2026?
- $2.13 per hour in cash wages. That is what the Department of Labor's table of minimum wages for tipped employees, last revised July 1, 2026, gives as the minimum cash wage for a tipped employee under the federal Fair Labor Standards Act. Tips make up the remainder of the applicable minimum wage, up to the maximum tip credit stated in the same row.
- What if tips do not bring the employee up to the full minimum wage?
- The employer pays 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 fall short of the applicable minimum wage is owed the shortfall in wages.
- Where does the figure on this page come from?
- From Minimum Wages for Tipped Employees, the table the Wage and Hour Division publishes by state, in the version last revised July 1, 2026. The row it was read from is quoted on this page, and the snapshot it was verified against is the one captured for this record.
Every amount on this page is a published figure rather than yours. The Tips needed per hour takes the number you enter and works it out against them, showing which published figure it used.
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 definition matters because it determines whether an employer in the United States can pay the lower cash wage of $2.13 per hour and claim a tip credit. If your job does not meet this threshold, your employer must pay you the full federal minimum wage and cannot use the tip credit. The $30-a-month figure is measured across your entire occupation, not job-by-job, and only tips you actually receive count toward it. Occupations like servers, bartenders, bellhops, and bussers typically qualify because tips are a regular and expected part of the compensation in those roles. If you are unsure whether your occupation qualifies, the key question is whether receiving tips is customary and regular for that line of work, not whether you personally happen to receive tips in any given month.
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
The federal tip credit system allows employers in the United States to pay tipped workers a lower direct cash wage while counting their tips toward meeting the full minimum wage. Under the FLSA, an employer must pay at least $2.13 per hour in cash wages to a tipped employee. The tip credit equals the difference between that cash wage and the federal minimum wage, currently $7.25 per hour. This means the maximum tip credit an employer can claim is $5.12 per hour. However, the employer can only use this system if your tips plus the direct cash wages add up to at least the full minimum wage for every hour you work in a given workweek. Only tips you actually receive count toward this calculation. If your employer fails to meet these conditions, they must pay you the full minimum wage directly. The tip credit is not automatic - it depends on the employer meeting notice requirements and ensuring adequate total compensation each week.
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. The maximum tip credit that an employer can currently claim is $5.12 per hour: ($7.25 - $2.13 direct (or cash) wage = $5.12).
Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act (FLSA) (DOL)
When the tips do not get you to the minimum wage
When a tipped employee's tips combined with the employer's direct cash wages do not add up to the federal minimum wage of $7.25 per hour in a given workweek, the employer has a legal obligation to pay the shortfall. This means that if you work a slow week where your tips are low, your employer cannot simply pay you the reduced cash wage of $2.13 per hour and leave you short of minimum wage. The employer must calculate your total compensation for that workweek - your direct wages plus your tips - and if it falls below $7.25 per hour for all hours worked, the employer must increase your pay to make up the difference. This protection ensures that tipped workers always receive at least the federal minimum wage, regardless of how much they earn in tips during any particular week. The employer bears the risk of low tip weeks, not 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
Before an employer can take advantage of the tip credit and pay the reduced cash wage, federal law requires them to inform tipped employees about the tip credit system. Employers must provide specific information including the amount of the direct cash wage they are paying (which must be at least $2.13 per hour), the additional amount they are claiming as a tip credit (which cannot exceed $5.12), and that the tip credit cannot exceed the actual tips received. This notice requirement protects workers by ensuring they understand how their pay is being calculated and what their rights are under the FLSA. Employers can provide this notice orally or in writing, but they must give it before taking the tip credit. If an employer fails to provide this required information, they lose the right to use the tip credit for that employee and must pay the full minimum wage without counting tips toward that obligation.
Employers must provide the following information to tipped employees before taking a tip credit under the FLSA: the amount of the direct (or cash) wage the employer is paying a tipped employee, which must be at least $2.13 per hour; the additional amount claimed by the employer as a tip credit, which cannot exceed $5.12 (the difference between the minimum required direct (or cash) wage of $2.13 and the current minimum wage of $7.25)
Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act (FLSA) (DOL)
When state law gives more than the federal rule
When state law and federal law both apply but provide different levels of protection for tipped employees, employers must follow whichever rule gives workers the most benefits. For example, while federal law allows employers to pay tipped workers as little as $2.13 per hour in direct wages, some states require a higher cash wage or prohibit employers from taking a tip credit altogether. In those situations, the more protective state law controls. This means that even though the federal minimum cash wage is $2.13, you may be entitled to a higher direct wage if your state law provides one. Similarly, if your state law prohibits tip credits entirely, your employer must pay you the full state minimum wage regardless of your tips. The federal rule sets a floor, not a ceiling - workers receive the benefit of whichever standard, federal or state, provides greater compensation or stronger protections for tipped employees.
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
Federal law strictly prohibits employers, including managers and supervisors, from keeping any portion of employees' tips for any reason. This rule applies whether or not the employer takes a tip credit. Your tips belong to you, not to your employer, and cannot be used for any business purpose, to subsidize other employees, or for any other reason. An employer cannot require you to hand over your tips, even if they pay you the full minimum wage in cash and do not use the tip credit system. This protection ensures that tips remain the property of the workers who earn them from customers. The prohibition covers both direct retention of tips and indirect methods such as requiring employees to contribute tips to a pool that benefits managers or the business. Any tip arrangement that results in employers, managers, or supervisors receiving any share of tips violates federal law.
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
When an employer takes a tip credit, they can only require tipped employees to contribute to traditional tip pools that are limited to workers in occupations where employees customarily and regularly receive tips. This means your tips can only be shared with other tipped workers such as waiters, bellhops, bussers, and service bartenders - people whose jobs typically involve receiving tips from customers. The tip pool cannot include non-tipped employees like cooks, dishwashers, or janitors who do not customarily receive tips. This restriction protects tipped workers by ensuring their tips are only shared with others who also depend on tips as part of their compensation. Employers who implement such tip pools must notify employees of the required contribution amounts and can only take a tip credit based on the tips each employee actually keeps after the pool distribution. Any tip pool that includes non-tipped workers violates the federal rules for employers using the tip credit system.
An employer that takes a tip credit 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, 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
When you work two different jobs for the same employer - one tipped and one non-tipped - federal law treats each occupation separately. For example, if you work as both a maintenance person and a server at a hotel, you are considered a tipped employee only for the hours you spend serving, not for your maintenance work. You must customarily and regularly receive at least $30 per month in tips for the server position to qualify as a tipped employee for that role. Your employer cannot take a tip credit for your maintenance hours or apply the lower cash wage rate to that work. For the non-tipped occupation, your employer must pay you the full minimum wage for every hour worked. This dual job rule prevents employers from inappropriately applying tip credit rules to work that does not involve tipping. The key distinction is whether you are performing duties in two separate occupations versus performing related tasks within a single tipped occupation.
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