Tipped minimum wage / Pennsylvania

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 Pennsylvania, the minimum wage is $7.25 an hour. An employer can pay a tipped employee as little as $2.83 an hour in cash, as long as tips bring the total to at least $7.25. The difference, $4.42, is the tip credit.

Your employer can't take a tip credit for time spent on side work that doesn't earn tips once it goes over 20 percent of your workweek.

Who counts as a tipped employee: more than $135 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 Pennsylvania minimum wage is scheduled. Pennsylvania still uses the federal $7.25. Lawmakers have debated raising it, but no increase has passed.

Tip pooling and service charges

Pools that include tip credit workers may only include jobs that customarily and regularly receive tips; if everyone is paid at least $7.25, non-tipped staff may be included. Employers, managers and supervisors may not take from a pool, though a manager may keep a tip for service they gave entirely alone. Workers must get advance notice of any pool.

Employers may not deduct credit card or other payment processing fees from any worker's tips, and banquet or package service fees must be disclosed as not being gratuities and listed separately from tips on the bill.

Overtime

Time and a half after 40 hours in a workweek, no daily overtime. Tipped overtime is figured on the full $7.25 minimum, then the $4.42 tip credit is subtracted.

Taxes on your tips

Pennsylvania 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 Pennsylvania Department of Labor and Industry, Bureau of Labor Law Compliance: how to file. You can also call the U.S. Department of Labor, Wage and Hour Division, at 1-866-487-9243.

Track it all with Cashout. Shifts, tips, unpaid breaks, taxes, and mileage, logged in seconds. iPhone · Android