2025 Vermont Tipped Minimum Wage
The 2025 Vermont Tipped Minimum Wage is $7.01.
Effective 2025-01-01Source: The Vermont Department of Labor Announces Minimum Wage Increase Starting January 2025 (Vermont Department of Labor)Verified 2026-08-31
Compared with 2024
| Item | 2024 | 2025 | Change |
|---|---|---|---|
| Minimum cash wage | $6.84 | $7.01 | +$0.17 (+2.5%) |
Who it applies to
Employers of tipped service employees in Vermont
What changed this year, and why
Vermont's tipped minimum wage increased from $6.84 to $7.01 per hour effective January 1, 2025.
Common questions
- What if a tipped employee's tips are not enough to reach the full minimum wage?
- If a tipped employee's tips combined with the cash wage do not equal at least the full Vermont minimum wage for a given workweek, the employer must pay the difference so the employee receives at least the standard non-tipped minimum wage.
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
In Vermont, the "Basic Tipped Wage Rate" applies to workers classified as "tipped employees" — those employed in service occupations where tips form a regular part of their compensation. The state sets this cash wage at 50% of the full minimum wage. Starting January 1, 2025, the tipped minimum wage is $7.01 per hour. This lower direct wage is allowed because employers expect tips to bring the worker's total earnings up to at least the full state minimum wage. If you work in a Vermont service role — such as a server, bartender, or hotel worker — and you customarily receive tips, your employer may classify you as a tipped employee and pay the $7.01 cash wage. The classification matters because it determines whether your employer can apply the tip credit or must pay you the full minimum wage from the start. If you are uncertain whether your position qualifies, you can contact the Vermont Department of Labor's Wage and Hour Unit for guidance.
The “Basic Tipped Wage Rate” for service, or “tipped employees,” equals 50% of the full minimum wage.
The Vermont Department of Labor Announces Minimum Wage Increase Starting January 2025 (Vermont Department of Labor)
What a tip credit is, and the cash wage underneath it
In Vermont, employers may pay tipped employees a lower direct cash wage — called the "Basic Tipped Wage Rate" — because the employee is expected to receive tips that make up the gap between that lower cash wage and the full minimum wage. The tip credit is the difference between the direct wage the employer pays and the standard minimum wage the worker is owed. The state sets the tipped minimum wage at 50% of the full minimum wage. For 2025, Vermont's minimum cash wage is $7.01 per hour. The employer is allowed to claim a tip credit only on the condition that the worker's tips actually bring total earnings to at least the full state minimum wage. If you work as a tipped employee in Vermont, your employer must still guarantee that your combined cash wage and tips equal at least the non-tipped minimum wage. The tip credit exists as a mechanism, not as a discount: it shifts part of the wage obligation to the tips customers give, while the employer remains responsible for the $7.01 cash floor.
The “Basic Tipped Wage Rate” for service, or “tipped employees,” equals 50% of the full minimum wage.
The Vermont Department of Labor Announces Minimum Wage Increase Starting January 2025 (Vermont Department of Labor)
When the tips do not get you to the minimum wage
Vermont's tipped minimum wage law includes a safeguard: if a tipped employee does not receive enough in tips during a workweek to bring total earnings up to the standard minimum wage, the employer is required to pay the difference. The cash wage for tipped employees in Vermont for 2025 is $7.01 per hour. If your tips in a given workweek do not close the gap between that $7.01 cash wage and the full minimum wage, your employer must add enough to your paycheck so that you earn at least the non-tipped minimum wage for every hour worked. This rule protects tipped workers in Vermont from slow shifts, seasonal dips, or other circumstances that reduce tip income. It places the risk of low tips on the employer, not the employee. If you believe your employer has not made up the shortfall in a particular workweek, you may file a wage complaint with the Vermont Department of Labor's Wage and Hour Unit.
In cases where the employee does not receive enough in tips during a workweek to equal the standard minimum wage per hour, the employer is required to pay the difference in order to ensure the tipped wage employee is compensated at the non-tipped minimum wage amount.
The Vermont Department of Labor Announces Minimum Wage Increase Starting January 2025 (Vermont Department of Labor)
The notice an employer owes you before it takes the credit
In Vermont, an employer that wants to pay the lower tipped cash wage — rather than the full minimum wage — must inform the employee about the arrangement before taking the tip credit. The Vermont Department of Labor's announcement confirms that the state's tipped minimum wage for 2025 is $7.01 per hour. The notice requirement exists so that tipped workers in Vermont know their employer is applying a tip credit, understand how much cash wage they will receive, and can verify that their tips are making up the difference to the full minimum wage. Without this advance notice, an employer cannot lawfully pay below the standard minimum wage. If your employer in Vermont has not told you that it is taking a tip credit, or has not explained how your wage is being calculated, you may be owed the full minimum wage. Contact the Wage and Hour Unit for assistance.
The State’s tipped minimum wage law allows employers to pay a lower hourly rate, as long as the employee receives tips equal to, or greater to than, the standard minimum wage during a given shift.
The Vermont Department of Labor Announces Minimum Wage Increase Starting January 2025 (Vermont Department of Labor)
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.
The Vermont Department of Labor Announces Minimum Wage Increase Starting January 2025 (Vermont Department of Labor)
- Minimum cash wage
On January 1, 2025, the tipped minimum wage will increase from $6.84 to $7.01 per hour.
Other years
Every Vermont Tipped Minimum Wage year · Tipped Minimum Wage in every state