CashoutGlossary / Tipped minimum wage
Tipped minimum wage
The lowest hourly cash wage an employer can pay a tipped worker before tips. It's $2.13 under federal law, and many states set it higher.
The tipped minimum wage is the least an employer can pay you per hour in cash wages when it counts your tips toward the rest of the minimum wage. Under federal law it's $2.13 an hour against a $7.25 minimum, which leaves a tip credit of up to $5.12.
States change the picture a lot:
- No tip credit. Alaska, California, Minnesota, Montana, Nevada, Oregon and Washington require the full state minimum wage before tips. That's $16.90 in California and $17.13 in Washington in 2026.
- Higher tipped wage. Many states allow a tip credit but set the cash wage above $2.13, such as Pennsylvania at $2.83.
- Federal floor. Some states, including Texas, use the federal $2.13.
The tipped minimum wage by state pages list each state's current rate and any announced change.
The tipped minimum wage is a floor on cash wages, not on what you take home. Your cash wage plus tips must still reach the full minimum wage every workweek, and if they don't, the employer owes the difference. A common mistake is assuming the federal $2.13 applies everywhere. Where state and federal law differ, your employer must follow the standard that's more protective for you.
Related terms
Direct wage · Tip credit · Tipped employee · Fair Labor Standards Act (FLSA) · Overtime
