2016 Iowa Tipped Minimum Wage
The 2016 Iowa Tipped Minimum Wage is $4.35.
Effective 2016-01-01Source: Wage Claims FAQ (Iowa Department of Inspections, Appeals, and Licensing)Verified 2026-09-01
Who it applies to
Tipped employees in Iowa whose employers take a tip credit
What changed this year, and why
For 2016, Iowa's minimum cash wage for tipped employees is $4.35 per hour.
Common questions
- What is the minimum cash wage for tipped employees in Iowa?
- An Iowa employer may pay a tipped employee as little as $4.35 per hour in cash wages if the employee regularly receives tips meeting a monthly threshold. If the cash wage plus tips do not average at least the full minimum wage for any work week, the employer must make up the difference.
Who counts as a tipped employee
In Iowa, a tipped employee is a worker who customarily and regularly receives more than $30 a month in tips. Once you meet that threshold, your employer is allowed to pay you a lower cash wage than the standard minimum wage. For 2016, the minimum cash wage for tipped employees in Iowa is $4.35 per hour. That rate applies only to people who actually earn tips on the job; workers who do not receive tips, or who receive fewer than $30 a month in tips, are entitled to the full regular minimum wage. The employer must still track tips and the hourly cash wage together, and if the combined total does not reach the applicable minimum wage in a given work week, the employer is responsible for covering the shortfall. The $30-per-month floor is the federal definition used by the U.S. Department of Labor, and Iowa follows it when deciding which employees can be paid at the lower tipped rate.
If you make $30 per month or more in tips, the employer may pay as little as $4.35 per hour.
Wage Claims FAQ (Iowa Department of Inspections, Appeals, and Licensing)
What a tip credit is, and the cash wage underneath it
Iowa allows employers to take a tip credit, which means they can count a portion of the tips employees earn toward meeting the state minimum wage obligation. For 2016, the minimum cash wage that an Iowa employer must pay a tipped employee directly is $4.35 per hour. This cash amount is lower than the full minimum wage because the tip credit fills the gap: the employer hands the worker $4.35 an hour in cash, and the tips the worker earns during that hour are treated as making up the rest. To qualify for this reduced cash wage, the employee must customarily and regularly receive at least $30 per month in tips. Workers who receive fewer tips than that threshold are not tipped employees under the rule and must be paid the full minimum wage in cash. The tip credit is not something the employer can apply to any worker at will; it is limited to employees whose job regularly produces enough tips to cross the $30-a-month floor. In Iowa, this arrangement means a tipped worker's paycheck will show the $4.35 cash wage, with the expectation that tips bring total earnings to at least the minimum wage every week. If tips fall short in any work week, the employer must make up the difference to ensure the worker receives at least the full minimum wage for all hours worked.
If you make $30 per month or more in tips, the employer may pay as little as $4.35 per hour. If in any work week the wage the employer pays you and the tips you receive do not average at least $7.25 per hour, the employer is required to pay the difference.
Wage Claims FAQ (Iowa Department of Inspections, Appeals, and Licensing)
When the tips do not get you to the minimum wage
Even when your employer in Iowa pays the reduced tipped minimum cash wage of $4.35 per hour, you are still guaranteed that your combined pay reaches the regular minimum wage every work week. The state requires the employer to add up the cash wages paid for the week and the tips you actually received during that same week. If the total of those two amounts does not average at least the standard minimum wage for all the hours you worked, the employer is required to pay the difference. In practice this means the tip credit is only as large as your real tips: in a slow week when tips are low, the employer's obligation grows; in a busy week when tips are high, the employer's obligation stays at the $4.35 cash wage. The protection is measured per work week, not per month or per year, so any shortfall in a single week must be made up on that week's paycheck.
If in any work week the wage the employer pays you and the tips you receive do not average at least $7.25 per hour, the employer is required to pay the difference.
Wage Claims FAQ (Iowa Department of Inspections, Appeals, and Licensing)
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.
Wage Claims FAQ (Iowa Department of Inspections, Appeals, and Licensing)
- Minimum cash wage
If you make $30 per month or more in tips, the employer may pay as little as $4.35 per hour.
Other years
Every Iowa Tipped Minimum Wage year · Tipped Minimum Wage in every state