CashoutTipped minimum wage / Texas
Texas tipped minimum wage
What employers must pay
In Texas, 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.
Texas uses the federal minimum wage. Its own law only matters for the few jobs federal wage law doesn't cover.
Who counts as a tipped employee: anyone who gets more than $30 a month in tips (for the few jobs not covered by federal law, Texas uses more than $20 a month).
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 Texas minimum wage is scheduled. Texas follows the federal rate, so it changes only if Congress changes it.
Tip pooling and service charges
No state tip pooling rule; federal rules apply: employers, managers and supervisors may not keep tips, and a mandatory pool may include only customarily tipped workers when a tip credit is taken (back of house may be included only if the full minimum wage is paid).
Overtime
No state overtime rule; the federal rule applies: 1.5 times the regular rate after 40 hours a week, figured on the full $7.25 for tipped workers, so the overtime cash wage is at least $5.76.
Taxes on your tips
Texas 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 Texas'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 Texas Workforce Commission, Labor Law Section: how to file. You can also call the U.S. Department of Labor, Wage and Hour Division, at 1-866-487-9243.
