2018 Texas Tipped Minimum Wage
The 2018 Texas Tipped Minimum Wage is $2.13.
Effective 2018-01-01Source: Texas Guidebook for Employers: Especially for Texas Employers (Texas Workforce Commission)Verified 2026-09-01
Compared with 2017
Every figure on this page is unchanged from 2017.
| Item | 2017 | 2018 | Change |
|---|---|---|---|
| Minimum cash wage | $2.13 | $2.13 | +$0 (+0.0%) |
Who it applies to
Texas employers who take a tip credit against the wages of tipped employees
What changed this year, and why
Texas's minimum cash wage for tipped employees was $2.13 per hour in 2018.
Common questions
- What was the minimum cash wage for tipped employees in Texas in 2018?
- In 2018 a Texas employer that took a tip credit had to pay a tipped employee a direct cash wage of at least $2.13 per hour. Texas adopts the federal minimum wage, so the tip credit an employer may claim is the difference between that cash wage and the federal minimum wage.
- What happens if tips do not bring a tipped employee in Texas up to the minimum wage?
- The employer must make up the difference. A cash wage of $2.13 per hour plus the tips the employee actually receives has to equal at least the applicable minimum wage for every hour worked, and where it does not the employer owes the balance.
Who counts as a tipped employee
In Texas, an employee counts as a tipped employee under federal law if they work in an occupation where they customarily and regularly receive more than $30 a month in tips. This threshold matters because it determines whether the employer is allowed to pay the lower cash wage of $2.13 per hour and take a tip credit toward its minimum wage obligation. If a worker's tips fall below that $30 monthly mark, or if their occupation is not one where tipping is customary, the employer must pay the full minimum wage and cannot use the tip credit. The definition focuses on what is customary and regular, not on whether the employee happened to earn a lot in a single month. Only tips actually received by the employee from customers count toward this determination.
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
In Texas, the tip credit is the amount an employer can subtract from the federal minimum wage to arrive at the cash wage it must pay a tipped employee directly. The employer must pay at least $2.13 per hour in cash wages. The tip credit equals the difference between that direct wage and the federal minimum wage. An employer that claims a tip credit must ensure that the employee receives enough tips from customers, and direct (or cash) wages per workweek to equal at least the minimum wage and overtime compensation required under the FLSA. Only tips actually received by the employee count when determining whether the employee is a tipped employee and in applying the tip credit. This means Texas tipped workers must see at least $2.13 per hour in their paycheck, and the employer can credit the rest of the minimum wage against the tips the worker actually takes in.
An employer must pay a tipped worker at least $2.13 per hour under the FLSA. 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
In Texas, if a tipped employee's cash wages plus their tips do not add up to at least the federal minimum wage in a given workweek, the employer is required to make up the shortfall. Employers claiming a tip credit must be able to show in each workweek that tipped employees receive at least the full federal minimum wage when direct (or cash) wages and the tip credit amount are combined. 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 protection applies week by week, so a slow week for tips does not leave the worker below the minimum wage floor. Texas employers who take the tip credit bear the responsibility for ensuring the total compensation meets the minimum wage in every single workweek.
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
In Texas, before an employer can take a tip credit against a tipped employee's wages, it must first give the employee specific notice. Employers must provide the following information to tipped employees before taking a tip credit under the FLSA: the cash wage being paid, the tip credit amount claimed, and confirmation that the tip credit cannot exceed the tips actually received. The employer must also inform the employee that all tips are theirs to keep except for valid tip pool contributions, and that the tip credit will not apply unless the employee has been told of these rules. An employer that fails to provide this required information cannot take the tip credit at all, meaning it must pay the full minimum wage. Texas workers who have not received this notice should know their employer cannot legally pay them less than the full minimum wage.
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
In Texas, when the federal FLSA and state law set different rules for tipped employees, the employer must follow whichever standard is more protective of the worker. When state law differs from the federal FLSA, an employer must comply with the standard most protective to employees. For example, some states require a higher cash wage than the federal direct (or cash) wage of $2.13 per hour or in some cases prohibit the taking of a tip credit entirely. Texas does not have its own state minimum wage for tipped employees that exceeds the federal floor, so the federal rules generally apply in Texas. However, if Texas were to enact a higher cash wage or restrict tip credits in the future, employers would be required to follow the more generous standard. Texas workers should monitor both federal and state requirements, because whichever gives them more pay or stronger protections is the one that governs.
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
In Texas, federal law makes clear that tips belong to the 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 may not require an employee to give their tips to the employer, a supervisor, or a manager, even where a tipped employee receives at least the federal minimum wage per hour in wages directly from the employer and the employer takes no tip credit. This means Texas managers and supervisors cannot skim tips, pocket tip jar money, or require workers to hand over tips as a condition of employment. The rule applies universally, not just when the employer is using the tip credit. Any Texas worker whose employer or supervisor keeps their tips has a claim under 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
In Texas, when an employer takes a tip credit, it can only require tipped employees to contribute to a pool of coworkers who also work in traditionally tipped occupations. 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 means a Texas server cannot be forced to share tips with cooks, dishwashers, or other back-of-house staff if the employer is paying the lower cash wage. The employer must also notify tipped employees of any required tip pool contribution amount, may only take a tip credit for tips each tipped employee ultimately receives after the pool is distributed, and may not retain any of the employees' tips for itself. Workers in Texas should check that anyone receiving a share of the pool is in a customarily tipped role.
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
In Texas, when a worker holds two distinct jobs for the same employer, the tip credit rules apply only to the job in which the employee actually receives tips. For example, where a maintenance person in a hotel also serves as a server, 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 a Texas employer must pay the full minimum wage for every hour the worker spends doing non-tipped work. The lower cash wage of $2.13 per hour is permitted only for the hours spent in the tipped occupation. Workers who split their time between tipped and non-tipped roles should track their hours carefully to ensure they are being paid correctly for each.
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.
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.
Texas Guidebook for Employers: Especially for Texas Employers (Texas Workforce Commission)
- Minimum cash wage
The FLSA sets minimum wage levels (minimum wage of $7.25 per hour (the Texas minimum wage is the same), a minimum cash wage of $2.13 per hour for tipped employees, overtime pay at one and a half times the regular rate of pay, and a minimum salary level of $684 per week for salaried exempt employees)
Other years
Every Texas Tipped Minimum Wage year · Tipped Minimum Wage in every state