2023 Texas Tipped Minimum Wage
The 2023 Texas Tipped Minimum Wage is $2.13.
Effective 2023-01-01Source: Texas Guidebook for Employers: Especially for Texas Employers (Texas Workforce Commission)Verified 2026-09-01
Compared with 2022
Every figure on this page is unchanged from 2022.
| Item | 2022 | 2023 | 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 2023.
Common questions
- What was the minimum cash wage for tipped employees in Texas in 2023?
- In 2023 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, a tipped employee is someone working in a job where they customarily and regularly receive more than $30 a month in tips. This definition comes from the federal Fair Labor Standards Act (FLSA), which sets the baseline for tipped employee rules across the country. If you work in Texas and your position typically generates more than $30 monthly in customer tips, you qualify as a tipped employee under federal law. This designation matters because it determines whether your employer can use the tip credit system to pay you a lower cash wage than the standard minimum wage. Not every worker who occasionally gets tips qualifies—your occupation itself must be one where tipping is customary and regular, such as servers, bartenders, or bellhops. The tips you actually receive are what count toward determining your status and your employer's wage obligations.
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
Texas employers can use a tip credit system under federal law, which allows them to pay tipped workers a lower cash wage while counting customer tips toward the minimum wage requirement. The cash wage your employer must pay you directly is at least $2.13 per hour. The tip credit represents the gap between what your employer pays you in cash and the full minimum wage. Your employer claims a credit for the tips you receive, but they must still ensure you earn at least the full minimum wage when combining your cash wages and tips each workweek. If your combined cash wages and tips fall short of the minimum wage in any workweek, your employer is legally required to pay you the difference. Only tips you actually receive count toward this calculation—your employer cannot count hypothetical or average tips. This system applies to Texas workers in tipped occupations, though some states have different rules that may be more protective of employees.
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
If your tips plus your employer's direct cash wages don't add up to at least the minimum hourly wage in any workweek, your Texas employer must make up the difference. This is a fundamental protection under the tip credit system. Your employer cannot simply pay you the low cash wage and hope your tips will cover the gap—if there's a shortfall in any given workweek, they're legally obligated to pay you enough to reach the minimum wage threshold. This calculation happens on a workweek basis, not averaged over longer periods. So if you have a slow week where customer tips are unusually low, your employer must supplement your wages to ensure you receive at least the minimum wage for that specific workweek. This rule prevents employers from shifting the risk of low tip income entirely onto workers. Texas employers using the tip credit system must track this carefully and be prepared to make up any differences when tips fall short of what's needed to reach minimum wage levels.
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 your Texas employer can use the tip credit system to pay you less than the full minimum wage, they must give you specific information about how the system works. This notice requirement ensures you understand your rights and how your wages are being calculated. Your employer must tell you the amount of the cash wage they're paying you, which must be at least $2.13 per hour, plus the additional amount they're claiming as a tip credit. They must inform you that the tip credit cannot exceed the difference between your cash wage and the minimum wage. Your employer must also tell you that all tips you receive are yours to keep, except when you're participating in a valid tip pool with other tipped employees. Finally, they must explain that the tip credit won't apply unless you've received this required information. Texas employers can give this notice orally or in writing, but if they fail to provide it, they cannot legally use the tip credit system and must pay you the full minimum wage directly.
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 Texas state law differs from federal rules about tipped employees, your employer must follow whichever standard is more protective of you as a worker. This means if Texas has laws that give tipped employees better protections than federal law—such as requiring a higher cash wage or prohibiting the tip credit altogether—your employer must comply with the Texas rule instead. However, if federal law provides better protections than state law, the employer must follow the federal standard. This "most protective" rule ensures you get the benefit of the strongest available protections. For example, some states require employers to pay tipped workers more than the federal cash wage minimum, while other states ban the tip credit entirely and require full minimum wage regardless of tips. Texas employers must stay informed about both state and federal requirements and apply whichever gives workers the greater benefit. This interaction between state and federal law prevents employers from using the weaker standard when a stronger one exists.
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
Your Texas employer, including any managers or supervisors, is prohibited from keeping any portion of your tips for any purpose, regardless of whether they use the tip credit system. This federal rule applies even if your employer pays you the full minimum wage directly and takes no tip credit at all. Your tips belong to you, and no one in management can take them, require you to hand them over, or use them for business expenses. This protection extends to situations involving tip pools—while valid tip pools among tipped employees are allowed, managers and supervisors cannot participate in or take any share from these pools. The rule prevents employers from shifting their wage obligations onto workers' tips or using customer generosity to subsidize business costs. Texas workers in tipped positions have the right to keep all their tips, with the only exception being mandatory contributions to lawful tip pools shared with other tipped employees. Any employer or manager who keeps your tips is violating federal wage and hour 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
Texas employers who take a tip credit can require you to contribute your tips to a pool, but only if that pool is limited to employees in occupations where they customarily and regularly receive tips. This means the pool can include workers like waiters, bellhops, counter personnel who serve customers, bussers, and service bartenders—but not non-tipped workers like cooks or dishwashers. Your employer must notify you of any required tip pool contribution amount and can only take a tip credit for the tips you ultimately receive after the pool distribution. They cannot keep any portion of the pooled tips for themselves. If your employer pays you the full minimum wage without taking a tip credit, different rules may apply that allow broader tip pooling. This traditional tip pool structure ensures that tips stay among workers who depend on customer gratuities as part of their compensation, rather than being redistributed to staff in non-tipped roles.
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
Texas workers who hold two different jobs for the same employer may be subject to the dual jobs rule. For example, if a hotel maintenance person also works as a server, that employee is a tipped employee only with respect to their employment as a server. This means the employer can apply the tip credit and pay the lower cash wage only for the hours the employee spends working as a server. For the hours worked as a maintenance person, no tip credit can be taken, and the employee must receive at least the full minimum wage. The employer must track hours separately for each occupation and apply the correct wage to each. This rule prevents employers from using one tipped position to justify paying below-minimum wages for non-tipped work. If you regularly receive at least $30 a month in tips from your server role in Texas, you meet the tipped employee threshold for that job, but your non-tipped hours remain fully protected at the standard minimum wage.
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