Facts About the Tipped Wage

What is the Tipped Wage?

The Fair Labor Standards Act (FLSA) has established a supplemental base wage of $2.13 per hour for employees who earn significant tip income (such as waiters and waitresses). These employees must earn at least the federal minimum wage of $7.25 when tips are included. (If they don’t, their employer is required to make up the difference.) The difference between the cash wage and the federal minimum wage is known as the tip credit.

States have the ability to set a higher wage supplement. Find out the tipped wage in your state.

Who Earns the Tipped Wage?

Employees who regularly earn at least $30 per month in tip income qualify to be paid a tipped wage supplement. The law primarily applies to waiters and waitresses, employees who serve customers at the counter, bussers, and bartenders. Other restaurant employees who do not receive tips (like cooks and dishwashers) do not qualify for the wage supplement.

How Much do Tipped Employees Earn?

Advocacy groups often misleadingly point to the $2.13 tipped wage supplement and claim that tipped employees earn less than the minimum wage. This isn’t true: Tipped employees are guaranteed to earn at least the federal minimum wage of $7.25 and typically earn much more. Census Bureau data show that the average hourly wage for a restaurant employee earning tip income is $13.08, with top earners bringing in $24 an hour or more.

Learn more about the consequences of a mandated increase in the tipped wage.