CashoutTipped minimum wage / Michigan
Michigan tipped minimum wage
What employers must pay
In Michigan, the minimum wage is $13.73 an hour. An employer can pay a tipped employee as little as $5.49 an hour in cash, as long as tips bring the total to at least $13.73. The difference, $8.24, is the tip credit.
Michigan's minimum wage law covers employers with 2 or more employees.
Who counts as a tipped employee: anyone who gets tips, but the tipped rate is allowed only if your reported tips make up the full gap to the minimum wage and your employer explained the rule in writing when you were hired.
If your cash wage plus tips comes up short of $13.73 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 $15.00 and the tipped cash wage to $6.30. In 2027 the tipped cash wage is 42 percent of the minimum. It goes up 2 percent of the minimum each year until it reaches 50 percent in 2031. Starting January 1, 2028, the minimum wage also goes up with inflation.
Tip pooling and service charges
The employee keeps all tips received. Employees may voluntarily share tips with coworkers who are part of the chain of service, but not with anyone whose duties are mainly managerial or supervisory.
If a restaurant adds a service charge, the employer must tell you in writing how it is distributed.
Overtime
1.5 times the regular rate after 40 hours a week, no daily overtime. Tipped overtime is figured on the full $13.73, so the cash wage for an overtime hour is at least $12.36 ($20.60 minus the $8.24 tip credit).
Taxes on your tips
Michigan 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
Enter one workweek to see whether your cash wage plus tips reached Michigan's minimum of $13.73 an hour.
You reached the minimum this week.
You came up short. Your employer owes you at least
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 Michigan Department of Labor and Economic Opportunity, Wage and Hour Division: how to file. You can also call the U.S. Department of Labor, Wage and Hour Division, at 1-866-487-9243.
