CashoutTipped minimum wage / South Dakota
South Dakota tipped minimum wage
What employers must pay
In South Dakota, the minimum wage is $11.85 an hour. An employer can pay a tipped employee as little as $5.93 an hour in cash, as long as tips bring the total to at least $11.85. The difference, $5.92, is the tip credit.
Who counts as a tipped employee: more than $35 a month in tips.
If your cash wage plus tips comes up short of $11.85 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 $12.30 and the tipped cash wage to $6.15. South Dakota raises the minimum with inflation each year, and the tipped cash wage is always half of it.
Tip pooling and service charges
South Dakota has no tip pooling rule of its own, so federal law applies: employers, managers and supervisors may not keep tips, and a mandatory pool that includes tip credit workers may only include staff who customarily and regularly receive tips.
Overtime
South Dakota has no overtime law of its own, so the federal rule applies: time and a half after 40 hours in a workweek. Tipped overtime is figured on the full $11.85 minimum, then the tip credit is subtracted.
Taxes on your tips
South Dakota does not tax wage income, so there is no state income tax on 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 South Dakota's minimum of $11.85 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 South Dakota Department of Labor and Regulation, Division of Labor and Management: how to file. You can also call the U.S. Department of Labor, Wage and Hour Division, at 1-866-487-9243.
