Tipped minimum wage / Arizona

By NorseHorse. Rates in force on October 15, 2026, checked against the sources at the bottom of this page. General information, not legal advice.

What employers must pay

In Arizona, the minimum wage is $15.15 an hour. An employer can pay a tipped employee as little as $12.15 an hour in cash, as long as tips bring the total to at least $15.15. The difference, $3.00, is the tip credit.

Flagstaff and Tucson set higher local minimum wages.

Who counts as a tipped employee: no set dollar amount; you must get tips regularly as a normal part of the job.

If your cash wage plus tips comes up short of $15.15 an hour in a workweek, your employer has to make up the difference.

What changes next

On January 1, 2027, the minimum wage goes to $15.65 and the tipped cash wage to $12.65. The Industrial Commission of Arizona has announced the 2027 rate. The tip credit stays at $3.00.

Local and regional rates

Some places in Arizona have their own minimum wage or a regional rate. If you work there, the rate listed here applies.

Tip pooling and service charges

Workers who customarily and regularly receive tips may pool or split tips among themselves. If the employer requires sharing with staff who do not regularly get tips, such as managers or food preparers, those shared tips cannot count toward any tip credit. The employer may not keep workers' tips.

A mandatory service charge counts toward a worker's minimum wage only if the employer actually pays it to the worker in the pay period it was earned.

Overtime

No state overtime law, so the federal rule applies: 1.5 times the regular rate after 40 hours in a week, no daily overtime. Overtime is figured on the full Arizona minimum wage, not the cash wage.

Taxes on your tips

Arizona taxes wage income, and tips are wages, so its income tax applies to your tips. Federal income tax, Social Security and Medicare still apply. The federal tip deduction can cut the income tax part: see how the No Tax on Tips deduction works.

Check a week's pay

If you are underpaid

Start by comparing your pay stubs with your own record of hours and tips. If the numbers don't add up, you can file a complaint with the Industrial Commission of Arizona, Labor Department: how to file. You can also call the U.S. Department of Labor, Wage and Hour Division, at 1-866-487-9243.

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