2026 Vermont Tipped Minimum Wage
The 2026 Vermont Tipped Minimum Wage is $7.21.
Effective 2026-01-01Source: Minimum Wages for Tipped Employees (DOL)Verified 2026-08-30
Compared with 2025
| Item | 2025 | 2026 | Change |
|---|---|---|---|
| Minimum cash wage | $7.01 | $7.21 | +$0.20 (+2.9%) |
Who it applies to
Employers of tipped employees in Vermont. 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 $7.21 per hour as the minimum cash wage an employer may pay a tipped employee in Vermont. 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 Vermont in 2026?
- $7.21 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 Vermont. 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 federal law, a tipped employee is someone who works in an occupation where they customarily and regularly receive more than $30 a month in tips. In Vermont, this definition determines whether your employer can pay you the state's tipped cash wage of $7.21 per hour instead of the full minimum wage. If you meet this threshold—for example, as a server, bartender, or bellhop—your employer may treat you as a tipped employee and apply the tip credit rules. Only the tips you actually receive count toward this determination. If your job does not involve customarily and regularly receiving more than $30 a month in tips, your employer must pay you at least the full applicable minimum wage for every hour you work, regardless of whether customers occasionally leave you something extra.
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
A tip credit lets an employer count a portion of the tips a worker receives toward its minimum wage obligation. Under the FLSA, the credit equals the difference between the cash wage the employer pays and the minimum wage. In Vermont, the minimum cash wage that must be paid directly to a tipped employee is $7.21 per hour. This means the employer takes a credit for the tips earned above that amount, so the employee's cash wage plus tips together must reach the applicable minimum wage. If the employer takes this credit, it must still verify each workweek that the combination of the $7.21 direct wage and the employee's tips meets or exceeds the full minimum wage. The employer cannot claim more as a credit than the tips the employee actually received.
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
Under Vermont law, an employer paying a tipped employee the cash wage of $7.21 per hour must confirm that the employee's tips bring total compensation up to the full minimum wage in every workweek. If an employee's tips combined with the employer's direct cash wages do not equal the minimum hourly wage in a given workweek, the employer must make up the difference. This guarantee applies regardless of how slow business is or how few tips come in. For example, if a server in Vermont works a week with unusually low customer traffic and the tips fall short, the employer is still legally required to pay enough additional wages so the worker earns at least the full minimum wage for every hour worked that week. The employer bears the risk of slow periods, not the worker.
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 Vermont can take a tip credit, it must give the tipped employee specific notice. Employers must provide the following information to tipped employees before taking a tip credit, including the amount of the direct (or cash) wage the employer is paying (which in Vermont is $7.21 per hour), the additional amount claimed as a tip credit, and confirmation that the tip credit cannot exceed the tips actually received. The employer must also inform the employee that all tips received belong to the employee and that the employer may not keep any portion of those tips. The notice can be oral or written, but if the employer fails to provide it, it loses the right to claim the tip credit entirely and must pay the full minimum wage. Vermont workers who have not received this notice can ask their employer to correct the omission or contact the state labor department.
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 state law provides greater protections than the federal rule, the employer must follow whichever standard benefits the worker more. This means that in Vermont, if state law requires a higher cash wage, a stricter notice requirement, or a more favorable tip treatment than the federal baseline, the employer must comply with the standard most protective to employees. For example, Vermont sets its own minimum cash wage for tipped employees at $7.21 per hour, which may differ from the federal amount. An employer operating in Vermont cannot simply default to the federal numbers if Vermont's rule gives the worker more pay or stronger safeguards. Workers in Vermont should look to whichever rule—state or federal—leaves them better off, and employers are legally obligated to apply that rule.
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
Regardless of whether an employer in Vermont 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. This means your employer, your manager, and your supervisor may never take, share in, or pocket the tips that customers leave for you. Even if the employer pays you the full minimum wage directly and does not claim a tip credit at all, the tips still belong to you alone. An employer cannot require you to hand over your tips to the business or to any supervisor or manager. This rule applies to all tipped employees in Vermont and ensures that tips earned through customer service stay with the workers who provided that service.
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 Vermont takes a tip credit, any mandatory tip pool 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 called a "traditional" tip pool. The employer must notify tipped employees of any required contribution amount and may only claim a tip credit for the tips each employee ultimately retains after the pool is distributed. The employer may not keep any of the employees' tips for any other purpose, and managers and supervisors are not allowed to participate in or receive distributions from the pool. Vermont workers who are part of a traditional tip pool should see their share of the pool reflected in their pay, and any contribution taken from them should go only to other traditionally tipped coworkers.
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 Vermont hold two distinct jobs for the same employer. For example, a hotel maintenance worker who also works as a server on busy nights may regularly receive tips for the server work. In that case, the worker is a tipped employee only with respect to their employment as a server. The employer may take a tip credit—paying the cash wage of $7.21 per hour—only for the hours spent working as a server. For the hours worked as a maintenance person, no tip credit is allowed and the employer must pay the full minimum wage. This rule prevents employers from applying the lower tipped rate to work that does not generate tips. Vermont workers who split their time between a tipped occupation and a non-tipped one should verify that they are paid the full minimum wage for every hour in the non-tipped role.
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.
Minimum Wages for Tipped Employees (DOL)
- Minimum cash wage
Vermont $14.42 50% of the applicable minimum wage ($7.21) $7.21 More than $120
Other years
Every Vermont Tipped Minimum Wage year · Tipped Minimum Wage in every state