Tipped minimum wage / Colorado

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 Colorado, the minimum wage is $15.16 an hour. An employer can pay a tipped employee as little as $12.14 an hour in cash, as long as tips bring the total to at least $15.16. The difference, $3.02, is the tip credit.

Denver, Edgewater, the City of Boulder and unincorporated Boulder County set higher local rates.

Who counts as a tipped employee: anyone who regularly gets more than $1.64 an hour in tips (Colorado's own rule; federal law uses more than $30 a month).

If your cash wage plus tips comes up short of $15.16 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 $15.71 and the tipped cash wage to $12.69. The state labor department announced this rate. The tip credit stays at $3.02.

Local and regional rates

Some places in Colorado 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 not make tipped workers share tips with managers or with staff who do not give direct customer service, and back-of-house staff such as cooks and dishwashers generally cannot share if the employer takes a tip credit. Pools must follow a set formula, and customers must be told in writing that tips are shared.

Mandatory service charges are not tips and cannot support a tip credit, and tips may not be used to pay credit card processing fees; if they are, the employer loses the tip credit and must repay the tips.

Overtime

1.5 times the regular rate after 40 hours in a week, 12 hours in a day or shift, or 12 straight hours. For tipped workers, overtime is figured on the full minimum wage, and the tip credit can lower the overtime rate by no more than $3.02.

Taxes on your tips

Colorado 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 Colorado Department of Labor and Employment, Division of Labor Standards and Statistics: 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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