The $2.13 number and what sits on top of it
Under the Fair Labor Standards Act, the federal tipped minimum wage in 2026 is $2.13 per hour in direct cash wages, unchanged since 1991. That figure has survived every federal minimum wage debate of the last three decades, including the ones that left the full federal minimum at $7.25.
It is not the whole wage. Employers may claim a tip credit of up to $5.12 per hour, which is the arithmetic bridge: $2.13 cash plus $5.12 in credited tips equals the $7.25 federal minimum. The credit is conditional in two directions. The worker has to actually receive the tips, and the employer has to meet the conditions for taking the credit. Read how the tip credit works for the full mechanics.
So back to the parking lot. $2.13 in cash wages plus $3.00 an hour in tips ($18 over six hours) is $5.13, which is $2.12 short of $7.25. The employer owes that $2.12 an hour, $12.72 for the shift. This is the make-up rule, and it is measured per pay period, not averaged across a good week and a bad one. If your employer averages your tips over the month to avoid the make-up, that is not how the rule works, and your pay stub is where the missing dollars either appear or do not. The make-up pay rules cover how to check your stub.
Who the $2.13 rate applies to
Federal law defines a tipped employee as someone who customarily and regularly receives more than $30 a month in tips. That threshold is the gate. A host who picks up a $5 tip once a month is not a tipped employee, and the employer cannot take the tip credit on their hours. Bartenders, servers, and bussers who regularly earn tips clear it easily; the disputes live at the edges, which is why the 80/20 rule and the dual jobs rule exist for side work.
There is a second gate on the employer side: notice. Before taking the tip credit, the employer must inform the employee of the cash wage, the credit claimed, and that tips are the employee's property except in a valid tip pool. Skip the notice and the credit is invalid, retroactively. The notice requirements are where a lot of tip-credit violations start.
Where $2.13 does not apply: the seven no-credit states
The federal number is a floor, and in seven states the floor is irrelevant because the tip credit does not exist. Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington all require employers to pay tipped workers the full state minimum wage before tips, with tips on top. In 2026 that means $16.90 an hour in California, $17.13 in Washington, $15.55 in Oregon (with regional variations), and $12.00 in Nevada, every hour, whether the dining room is packed or empty.
The District of Columbia is mid-transition: voters approved phasing the tip credit out entirely by 2027, so DC's tipped cash wage keeps climbing toward the full minimum. Everywhere else, states set their own tipped cash wage somewhere between the federal $2.13 and the full minimum. Florida sits at $10.98 with a $3.02 credit; Arizona at $12.15 with a $3.00 cap; Texas, Georgia, and the other $7.25 states default to the federal $2.13. The full table is in tipped minimum wage by state for 2026.
One honest caveat about the state table: minimum wages move. States with inflation indexing adjust every January 1, cities pass their own ordinances mid-year, and DC's phase-out is on a schedule. If you are checking this in late 2026 or 2027, verify against the DOL's current tipped-wage table rather than trusting any single article's numbers, including this one.
Frequently asked questions
What is the federal tipped minimum wage in 2026?
$2.13 per hour in direct cash wages, with employers allowed a tip credit of up to $5.12 per hour, totaling $7.25. The $2.13 figure has been unchanged since 1991. If tips plus the cash wage do not reach $7.25, the employer must make up the difference.
Which states do not allow a tip credit?
Seven states require the full state minimum wage before tips: Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington. The District of Columbia is phasing its tip credit out entirely by 2027.
Who counts as a tipped employee under federal law?
An employee who customarily and regularly receives more than $30 per month in tips. The tip credit only applies to workers meeting that definition.
What happens if a server's tips do not reach minimum wage?
The employer must pay the shortfall so the employee's total, cash wage plus tips, equals at least the applicable minimum wage for that pay period. The make-up is measured per pay period, not averaged over time.
The number that will not sit still
$2.13 has been frozen since 1991, which makes it the most stable number in American labor law and, depending on your view, the most overdue for change. Ballot campaigns keep pushing state by state, DC is mid-phase-out, and Congress revisits the federal figure every few years without moving it. If you are a tipped worker, the practical move is not to wait for the law: know the make-up rule, check your stub each pay period, and use the tipped wage data to see which rate actually applies to you. For more tipped wage guides, subscribe to the newsletter, it is free.