2021 South Dakota Tipped Minimum Wage
The 2021 South Dakota Tipped Minimum Wage is $4.725.
Effective 2021-01-01Source: State Minimum Wage to Increase Jan. 1 (South Dakota Department of Labor and Regulation)Verified 2026-08-31
Compared with 2020
| Item | 2020 | 2021 | Change |
|---|---|---|---|
| Minimum cash wage | $4.65 | $4.725 | +$0.075 (+1.6%) |
Who it applies to
South Dakota employers that pay tipped employees
What changed this year, and why
The minimum cash wage for tipped employees in South Dakota increased to $4.725 per hour, effective January 1, 2021, up from $4.65 per hour in 2020.
Common questions
- What if an employee's tips plus the cash wage do not reach the full minimum wage?
- Employers must make sure the employee's cash wage plus tips together reach at least the full South Dakota minimum wage. If they fall short, the employer must make up the difference.
- Why is the tipped wage half the standard minimum wage?
- The tipped minimum cash wage is set at half the standard minimum wage in South Dakota.
What a tip credit is, and the cash wage underneath it
South Dakota allows employers to take a tip credit, which is the difference between the direct cash wage paid to tipped workers and the full state minimum wage. For 2021, the minimum cash wage that employers must pay tipped employees is $4.725 per hour, which is half the minimum wage for non-tipped employees. This means employers can count a portion of the tips received by workers toward their wage obligation, as long as the cash wage paid is at least $4.725 per hour. The tip credit mechanism allows businesses in the hospitality industry to pay a lower base wage while ensuring that workers who receive tips can reach the full minimum wage when their tips are added to their cash earnings. Employers in South Dakota must ensure that the combination of the cash wage and tips received by employees equals at least the full state minimum wage for all hours worked.
The hourly minimum wage for tipped employees will be $4.725/hour effective Jan. 1, 2021, half the minimum wage for non-tipped employees.
State Minimum Wage to Increase Jan. 1 (South Dakota Department of Labor and Regulation)
When the tips do not get you to the minimum wage
In South Dakota, if a tipped employee's tips combined with the cash wage paid by the employer do not reach the full state minimum wage, the employer must make up the difference. South Dakota's minimum cash wage for tipped employees is $4.725 per hour in 2021, but that amount alone may not satisfy the minimum wage requirement. Employers are responsible for tracking what their tipped workers earn in tips each pay period. When tips fall short, the employer cannot simply accept the lower total. The employer must pay the additional amount needed so that the employee receives at least the full minimum wage for every hour worked. This obligation applies to all South Dakota employers subject to limited exceptions. Workers in the state should know that the tip credit does not shift all the risk onto them — if business is slow and tips are low, the employer must still ensure the combined total meets the minimum wage floor.
Wages and tips combined must equal at least the minimum wage.
State Minimum Wage to Increase Jan. 1 (South Dakota Department of Labor and Regulation)
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.
State Minimum Wage to Increase Jan. 1 (South Dakota Department of Labor and Regulation)
- Minimum cash wage
The hourly minimum wage for tipped employees will be $4.725/hour effective Jan. 1, 2021, half the minimum wage for non-tipped employees. Wages and tips combined must equal at least the minimum wage. These increases will apply to all South Dakota employers, with some limited exceptions.
Other years
Every South Dakota Tipped Minimum Wage year · Tipped Minimum Wage in every state