Research Summary: Calculating wages for tipped workers can be a complicated business, especially given that each state is different. Though the federal minimum cash wage and maximum tip credit are $2.13 and $5.12, respectively, many states have chosen to implement their own tipped wage laws.
Today, over half of all US states, 35 to be exact, have opted to raise their internal tipped minimum wage higher than the federal requirement. With that in mind, we’ve investigated all of the most essential facts about the tipped minimum wage in the US, and according to our extensive research these are the tipped minimum wage rates by state:
| State | Total Tipped Minimum Wage (Cash + Tip) | Maximum Tip Credit | Minimum Cash Wage | Definition of Tipped Employee |
|---|---|---|---|---|
| Alabama | N/A | N/A | $2.13 | $30+ in tips per month |
| Alaska | $10.34 | N/A | $10.34 | N/A |
| Arizona | $12.80 | $3.00 | $9.80 | N/A |
| Arkansas | $11.00 | $8.37 | $2.63 | $20+ in tips per month |
| California | $15.00 | N/A | $15.00 | N/A |
| Colorado | $12.56 | $3.02 | $9.54 | $30+ in tips per month |
| Connecticut | $14.00 | $6.62 | $6.38 | $10+ in tips per week |
| Delaware | $10.50 | $8.27 | $2.23 | $30+ in tips per month |
| Florida | $10.00 | $3.02 | $6.98 | N/A |
| Georgia | N/A | N/A | $2.13 | N/A |
| Hawaii | $10.10 | $0.75 | $9.35 | $20+ in tips per month |
| Idaho | $7.25 | $3.90 | $3.35 | $30+ in tips per month |
| Illinois | $12.00 | $4.80 | $7.20 | $20+ in tips per month |
| Indiana | $7.25 | $5.12 | $2.13 | N/A |
| Iowa | $7.25 | $2.90 | $4.35 | $30+ in tips per month |
| Kansas | $7.25 | $5.12 | $2.13 | $20+ in tips per month |
| Kentucky | $7.25 | $5.12 | $2.13 | $30+ in tips per month |
| Louisiana | N/A | N/A | $2.13 | N/A |
| Maine | $12.75 | $6.37 | $6.38 | $30+ in tips per month |
| Maryland | $12.50 | $8.87 | $3.63 | $30+ in tips per month |
| Massachusetts | $14.25 | $8.10 | $6.15 | $20+ in tips per month |
| Michigan | $9.87 | $6.12 | $3.75 | N/A |
| Minnesota | $10.33 | N/A | $10.33 | N/A |
| Mississippi | N/A | N/A | $2.13 | N/A |
| Missouri | $11.15 | $5.57 | $5.58 | N/A |
| Montana | $9.20 | N/A | $9.20 | N/A |
| Nebraska | $9.00 | $6.87 | $2.13 | N/A |
| Nevada | $9.75 | N/A | $9.75 | N/A |
| New Hampshire | $7.25 | $3.99 | $3.26 | $30+ in tips per month |
| New Jersey | $13.00 | $7.87 | $5.13 | N/A |
| New Mexico | $11.50 | $8.70 | $2.80 | $30+ in tips per month |
| New York | $13.20 | $4.40 | $8.80 | N/A |
| North Carolina | $7.25 | $5.12 | $2.13 | $20+ in tips per month |
| North Dakota | $7.25 | $2.39 | $4.86 | $30+ in tips per month |
| Ohio | $9.30 | $4.65 | $4.65 | $30+ in tips per month |
| Oklahoma | $7.25 | $5.12 | $2.13 | N/A |
| Oregon | $12.75 | N/A | $12.75 | N/A |
| Pennsylvania | $7.25 | $4.42 | $2.83 | $30+ in tips per month |
| Rhode Island | $12.25 | $8.36 | $3.89 | N/A |
| South Carolina | N/A | N/A | $2.13 | N/A |
| South Dakota | $9.95 | $4.97 | $4.97 | $35+ in tips per month |
| Tennessee | N/A | N/A | $2.13 | N/A |
| Texas | $7.25 | $5.12 | $2.13 | $20+ in tips per month |
| Utah | $7.25 | $5.12 | $2.13 | $30+ in tips per month |
| Vermont | $12.55 | $6.27 | $6.28 | $120+ in tips per month |
| Virginia | $7.25 | $5.12 | $2.13 | $30+ in tips per month |
| Washington | $14.49 | N/A | $14.49 | N/A |
| West Virginia | $8.75 | $6.13 | $2.62 | N/A |
| Wisconsin | $7.25 | $4.92 | $2.33 | N/A |
| Wyoming | $7.25 | $5.12 | $2.13 | $30+ in tips per month |
States That Use The Federal Tipped Minimum Wage
There are currently 15 states that have opted to use the Federal tipped minimum wage of $2.13 (minimum cash wage) + $5.12 (maximum tip credit). Essentially, this means these states have no tipped minimum wage laws of their own. These states include:
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Alabama
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Georgia
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Indiana
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Kansas
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Kentucky
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Louisiana
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Mississippi
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North Carolina
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Oklahoma
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South Carolina
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Tennessee
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Texas
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Utah
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Virginia
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Wyoming
Tipped Minimum Wage By State FAQ
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The federal definition of a tipped employee is anyone who makes over $30 per month in tips. However, this varies by state, as there are 16 states that have adopted the federal minimum. These include: Alabama, Colorado, Delaware, Idaho, Iowa, Kentucky, Maine, Maryland, New Hampshire, New Mexico, North Dakota, Ohio, Pennsylvania, Utah, Virginia, and Wyoming.
The next most common definition is employees who make at least $20 per month from tips, and seven states who’ve adopted this standard include: Arkansas, Hawaii, Illinois, Kansas, Massachusetts, North Carolina, and Texas.
Additionally, there are three outlier states:
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Connecticut: Any employee that makes $10 or more in tips per week
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South Dakota: Any employee that makes $35 or more in tips per month
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Vermont: Any employee that makes $120 or more in tips per month
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Should the US have a tipped minimum wage?
Many people disagree on whether or not the US should have a tipped minimum wage. Many small businesses argue that eliminating the tipped minimum wage would have disastrous consequences for their business and finances. They argue that they simply can’t afford the alternative.
On the other hand, those in favor argue that eliminating the tipped minimum wage in favor of an overreaching minimum wage would reduce poverty. Data from the Center for American Progress indeed shows that doing this would help reduce poverty and improve the economy.
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What is tip credit against minimum wage?
A tip credit is the amount of money an employer can claim against the minimum wage when paying an employee. The federal tip credit is $5.12 maximum, but many states have much higher or lower rates.
For example, in California, employers cannot claim a tip credit, while in Maryland, employers can claim up to $8.87 against the minimum wage.
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What state has the highest tipped minimum wage?
The state with the highest tipped minimum wage is Massachusetts, where the minimum cash wage is $6.15, and the maximum tip credit is $8.10. While this combined $14.25 is less than California’s or Washington’s minimum wages, both of these states have eliminated tip credits.
Conclusion
Despite rising inflation, the federal tipped minimum wage has remained unchanged for over 30 years. Today, 35 states have implemented their own tipped minimum wage standards, while 15 have maintained the federal minimum of $2.13.
However, tips are continuing to become more controversial, with small businesses arguing that tips are necessary for them to stay in business and others arguing that removing the tipped minimum wage in favor of a fair minimum wage would decrease poverty and improve the economy.
Regardless, the trend of increasing tipped minimum wages will likely continue as the general minimum wage in many states also continues to increase.
Author
Jack Flynn is a writer for Zippia. In his professional career he’s written over 100 research papers, articles and blog posts. Some of his most popular published works include his writing about economic terms and research into job classifications. Jack received his BS from Hampshire College.
