Tipped minimum wage / California

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

California does not allow a tip credit. Your employer has to pay the full minimum wage of $16.90 an hour, and your tips are on top of that.

Covered fast food restaurants must pay at least $20.00, some health care workers have higher rates, and about 40 cities and counties set higher local rates.

What changes next

On January 1, 2027, the minimum wage goes to $17.40. The state announced this rate on July 31, 2026. Many cities and counties also change their rates on January 1 or July 1.

Local and regional rates

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

Tip pooling and service charges

Employers may require tips to be shared with employees in the chain of service, such as bussers and bartenders, under a fair and reasonable policy. Owners, managers and supervisors may not share in pooled tips, and the employer may not keep any part of a tip.

Employers may not deduct credit card processing fees from tips, and card tips must be paid by the next regular payday; whether a mandatory service charge counts as a tip depends on how customers understand it.

Overtime

1.5 times the regular rate after 8 hours in a day, 40 hours in a week, and for the first 8 hours on a seventh straight workday; double time after 12 hours in a day or after 8 hours on the seventh day. Tipped workers already earn the full minimum, so overtime is based on their full regular rate.

Taxes on your tips

California 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.

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 California Department of Industrial Relations, Labor Commissioner's Office (DLSE): 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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