CashoutTipped minimum wage / North Carolina
North Carolina tipped minimum wage
What employers must pay
In North Carolina, the minimum wage is $7.25 an hour. An employer can pay a tipped employee as little as $2.13 an hour in cash, as long as tips bring the total to at least $7.25. The difference, $5.12, is the tip credit.
Who counts as a tipped employee: more than $20 a month in tips.
If your cash wage plus tips comes up short of $7.25 an hour in a workweek, your employer has to make up the difference.
What changes next
No change to the North Carolina minimum wage is scheduled. The state rate matches the federal minimum, so it changes only if the federal rate changes.
Tip pooling and service charges
For businesses covered only by state law (generally under $500,000 in sales), tip pooling is allowed as long as tipped workers keep at least 85 percent of their tips. Businesses covered by federal wage law follow federal rules: employers, managers and supervisors may never keep workers' tips.
Overtime
Time and a half after 40 hours in a week (45 hours for seasonal amusement or recreation businesses). Tipped overtime is figured on the full minimum wage, not the $2.13 cash wage.
Taxes on your tips
North Carolina 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 North Carolina's minimum of $7.25 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 North Carolina Department of Labor, Wage and Hour Bureau: how to file. You can also call the U.S. Department of Labor, Wage and Hour Division, at 1-866-487-9243.
