What’s the Minimum Wage for Tipped Employees By State in 2026?

Tipped employees in the U.S. must receive a minimum wage of $2.13 per hour, known as a cash wage.

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Edited by other Updated Jan 6, 2026 Updated on Jan. 6. Updated on Jan. 6. On Jan. 1, 2026, many new state and local tipped minimum wages went into effect. See the chart below for all state increases. Working out the minimum wage for workers who receive tips, such as food servers, can be complex. Tipped employees include those who rely on tips from customers to supplement their wages. A tipped employee typically receives more than $30 per month in tips, according to the Department of Labor.

What is a cash wage?

Tipped employees must receive a minimum wage of $2.13 per hour, known as a cash wage. That cash wage is combined with tips to reach the federal minimum wage of $7.25 per hour. (Many states and localities, listed below, have minimum wages set above the federal rate). » MORE: What is the minimum wage? » MORE:

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What is a tip credit?

Tips are considered a “tip credit,” which allows employers to pay employees below the federal minimum wage. Employers can credit up to $5.12 per hour in tips against a worker's earnings. If an employee’s wages (at least $2.13 per hour) plus tips is less than $7.25 per hour, their employer is required to make up the difference.

Are tips taxed?

Tips are taxed as income. While campaigning, President-elect Donald Trump promised to create a “no tax on tips” policy.

Tipped minimum wages by state

Minimum tipped wages and maximum tip credits vary by state and even city.
*Some cities have separate tipped minimum wages and they're typically higher than state tipped minimums. Most are listed above with the exception of California.
*Some cities have separate tipped minimum wages and they're typically higher than state tipped minimums. Most are listed above with the exception of
*Some cities have separate tipped minimum wages and they're typically higher than state tipped minimums. Most are listed above with the exception of » MORE: What is the median household income? » MORE: Explore more on About the author Helhoski Anna Helhoski is a senior writer covering economic news and trends in consumer finance at NerdWallet. She is an on-air contributor and producer of Money News segments for NerdWallet's Smart Money podcast. She is also an authority on student loans. She joined NerdWallet in 2014. Her work has been syndicated in news outlets nationwide including The Associated Press, The New York Times, The Washington Post, The Los Angeles Times and USA Today. She previously covered local news in the New York metro area for the Daily Voice and New York state politics for The Legislative Gazette. She holds a bachelor's degree in journalism from Purchase College, State University of New York. Published in How to Pay Off Debt: Top Strategies for 2026 Credit Score Ranges: What They Mean and How They Work How to Budget Money in 5 Steps 28 Proven Ways to Save Money Get Your Free Credit Score By NerdWallet How to Pay Off Debt: Top Strategies for 2026 By Lauren Schwahn, Jackie Veling 50/30/20 Budget Calculator By Amanda Barroso, Elizabeth Ayoola