2026 South Dakota Tipped Minimum Wage
The 2026 South Dakota Tipped Minimum Wage is $5.93.
Effective 2026-01-01Source: Minimum Wages for Tipped Employees (DOL)Verified 2026-08-30
Compared with 2025
| Item | 2025 | 2026 | Change |
|---|---|---|---|
| Minimum cash wage | $5.75 | $5.93 | +$0.18 (+3.1%) |
Who it applies to
Employers of tipped employees in South Dakota. 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 $5.93 per hour as the minimum cash wage an employer may pay a tipped employee in South Dakota. 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 in South Dakota in 2026?
- $5.93 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 in South Dakota. 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 the Fair Labor Standards Act, a tipped employee in South Dakota is someone who works in an occupation where they customarily and regularly receive more than $30 a month in tips. This $30 threshold is the federal standard used to determine whether the special tipped-employee rules apply. If a worker meets this definition, the employer may pay a lower direct cash wage and claim a tip credit, but only if all of the notice and wage requirements are satisfied. Workers who do not regularly receive tips above this monthly amount are not considered tipped employees under the FLSA, meaning the employer must pay them the full applicable minimum wage without relying on any tip credit. In South Dakota, the minimum cash wage for 2026 is $5.93.
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 tip credit is the difference between the cash wage an employer pays directly to a tipped employee and the minimum wage that would otherwise be required. In South Dakota, employers may use the federal tip credit framework, which allows them to pay a reduced direct wage as long as the employee's tips make up the remainder. The employer can take a tip credit equal to the difference between the direct wage, or the cash wage it pays directly to the tipped employee, and the applicable minimum wage. For 2026, the minimum cash wage in South Dakota is $5.93. The employer must ensure that the combination of this cash wage and the employee's tips brings total compensation to at least the full minimum wage in every workweek. If the tips fall short, the employer must increase the cash payment to cover the gap.
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
Federal law requires that tipped employees in South Dakota receive at least the full minimum wage in every workweek when you add the employer's direct cash wages and the employee's tips together. 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 the employer cannot simply pay the cash wage and walk away; it must verify each workweek that the employee's total compensation reaches the floor. South Dakota's minimum cash wage for 2026 is $5.93. If tips in a slow week leave the employee below the required minimum, the employer owes extra cash to close the gap.
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 in South Dakota can use a tip credit, it must give the tipped employee specific information in advance. Employers must provide the following information to tipped employees before taking a tip credit: the amount of the direct cash wage being paid, the additional amount claimed as a tip credit, a statement that the tip credit cannot exceed the tips actually received, a statement that all tips are the employee's property, and confirmation that the employee has been informed of these provisions. The notice may be oral or written, but it must come before the credit is applied. South Dakota's minimum cash wage for 2026 is $5.93. An employer that fails to deliver this notice loses the right to claim the tip credit entirely and must pay the full minimum wage directly to the employee for all hours worked.
Employers must provide the following information to tipped employees before taking a tip credit under the FLSA:
Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act (FLSA) (DOL)
When state law gives more than the federal rule
When a state law and the federal FLSA set different rules for tipped employees, the employer in South Dakota must follow whichever standard gives the worker the greatest protection. When state law differs from the federal FLSA, an employer must comply with the standard most protective to employees. Some states, for example, require a higher cash wage than the federal floor or ban the tip credit entirely. South Dakota has its own minimum cash wage of $5.93 for 2026. If the South Dakota standard is more generous to the worker than the federal rule—whether through a higher cash wage, a larger minimum wage, or stronger tip-pooling protections—the employer must follow the South Dakota rule. The principle ensures that tipped workers always receive the better of the two overlapping legal schemes.
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 is clear that the tips a tipped employee earns in South Dakota belong to that employee, not to the business. 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. An employer, manager, or supervisor may not require a worker to hand over their tips, even if the employer already pays the full minimum wage in cash and takes no tip credit at all. This rule protects all of a worker's tip income from being diverted upward to the house or to supervisors. In South Dakota the minimum cash wage for 2026 is $5.93, but regardless of the wage structure, the tips themselves remain the employee's property.
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 in South Dakota takes a tip credit, it can require tipped employees to contribute to a tip pool, but only a limited one. 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. This is sometimes known as a "traditional" tip pool. Back-of-house workers such as cooks and dishwashers who do not customarily receive tips cannot be included in this type of pool. South Dakota's minimum cash wage for 2026 is $5.93. The employer may only take a tip credit for the tips each employee ultimately retains after the pool is distributed, and may not keep any of the pooled tips itself.
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
Some workers in South Dakota hold two different positions for the same employer—one tipped and one not. 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. The worker is employed in two occupations, and no tip credit can be taken for their hours of employment in their occupation as a maintenance person. This means the employer can pay the lower cash wage only for the hours spent in the tipped role. For the non-tipped role, the employer must pay the full applicable minimum wage. South Dakota's minimum cash wage for 2026 is $5.93. The dual-job rule prevents employers from applying the tip credit to work that does not actually generate tips.
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
South Dakota $11.85 50% of the applicable minimum wage ($5.92) $5.93 More than $35
Other years
Every South Dakota Tipped Minimum Wage year · Tipped Minimum Wage in every state