CashoutTipped minimum wage / Montana
Montana tipped minimum wage
What employers must pay
Montana does not allow a tip credit. Your employer has to pay the full minimum wage of $10.85 an hour, and your tips are on top of that.
Businesses not covered by federal law with $110,000 or less in yearly sales may pay $4.00; workers covered by federal law get the higher of the federal or state rate.
What changes next
On January 1, 2027, the minimum wage goes to $11.20. The state announced the new rate on October 7, 2026, after prices rose 3.4 percent over the past year.
Tip pooling and service charges
Employers may require a tip pool among staff who give customer service or prepare food, including cooks and dishwashers, after notifying them. The employer and salaried exempt managers or supervisors may not take part, and pooled tips must be paid out in full by the regular payday.
Overtime
1.5 times the regular rate after 40 hours a week, no daily overtime. With no tip credit, overtime is 1.5 times the regular rate.
Taxes on your tips
Montana 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 Montana Department of Labor and Industry, Employment Relations Division, Labor Standards: how to file. You can also call the U.S. Department of Labor, Wage and Hour Division, at 1-866-487-9243.
