The federal baseline, and why it barely matters anymore
Under the Fair Labor Standards Act, the federal cash wage for tipped employees is $2.13 an hour. The employer claims a tip credit of up to $5.12 against the $7.25 federal minimum, and must make up the shortfall if tips plus cash don't reach $7.25. That three-number structure, cash wage, tip credit, total, is how every state's system works. The only question is what numbers each state plugs in.
What most summaries skip: the federal $2.13 only governs you if your state lets it. The rule everywhere is that the highest applicable rate wins. If your state sets a higher cash wage, the state number controls. If your city sets a higher minimum, the city number controls on top of that. The federal floor is a backstop for the states that never built their own system, not a ceiling on what you should be paid.
The eight states with no tip credit
This is the list worth memorizing. Eight jurisdictions prohibit the tip credit entirely, which means tipped workers there earn the full minimum wage plus their tips, no credit math, no shortfall to track:
| State | 2026 tipped cash wage |
|---|---|
| Alaska | $14.00 |
| California | $16.90 |
| Minnesota | $11.41 |
| Montana | $10.85* |
| Nevada | $12.00 |
| Oregon | $15.55 / $16.80 / $14.55** |
| Washington | $17.13 |
*Montana's $10.85 applies to businesses with gross annual sales over $110,000. **Oregon varies by region: standard, Portland metro, nonurban. Figures from the U.S. Department of Labor's tipped wage table, July 1, 2026.
A server in Seattle earns $17.13 an hour before a single tip lands. A server in Texas earns $2.13 before tips. Same job title, same FLSA, an $15-an-hour gap in the guaranteed portion. If you ever wondered why tipped workers talk about state lines the way other people talk about tax brackets, that's why.
States that raised the cash wage without killing the credit
Between the $2.13 states and the no-credit states sits a middle group that kept the tip credit but set the cash wage well above the federal floor. These are the numbers that surprise people:
| State | Cash wage | Tip credit | Total |
|---|---|---|---|
| District of Columbia | $10.30 | $8.10 | $18.40 |
| Florida | $10.98 | $3.02 | $14.00 |
| Arizona | $12.15 | $3.00 | $15.15 |
| Colorado | $12.14 | $3.02 | $15.16 |
| Hawaii | $14.75 | $1.25 | $16.00 |
| Connecticut (hotel/restaurant) | $6.38 | $10.56 | $16.94 |
Figures from the U.S. Department of Labor's tipped wage table, July 1, 2026. Hawaii's credit applies only if cash plus tips reach at least $7.00 above the minimum wage. D.C. is phasing its tip credit out.
Everyone not in these tables is mostly on the federal pattern: $2.13 cash, $5.12 credit, $7.25 total. Some states nudge the cash wage up a little, Idaho at $3.35, North Dakota at $4.86, Arkansas at $2.63, but the structure is the same. For the complete 50-state list, the Department of Labor's table is the authoritative source and it's updated whenever rates change: dol.gov tipped minimum wage table.
The two rules that protect you in every state
Whatever your state's numbers, two federal rules follow you everywhere. First, the make-up rule: if your cash wage plus tips doesn't reach the full applicable minimum wage in a pay period, the employer owes you the difference. Not next month, not as a favor. It's the employer's obligation, and "slow week" isn't a defense. Track your own tips, because this rule only helps workers who can show the shortfall.
Second, the notice rule: an employer can't take a tip credit without telling you. The FLSA requires employers to inform tipped workers about the tip credit provisions before using them. Plenty of workers learn their pay structure is wrong only when someone explains this requirement to them. If your employer never told you a credit was being taken, that's a problem for the employer, not you.
One more thing worth knowing: the states with no tip credit list on this site goes deeper on that group, and our make-up pay explainer walks through exactly how the shortfall calculation works when your tips come up short.
Frequently asked questions
What is the federal tipped minimum wage in 2026?
$2.13 per hour in cash wages, with a maximum tip credit of $5.12 toward the $7.25 federal minimum. Employers must make up any shortfall when tips don't close the gap.
Which states have no tip credit in 2026?
Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington, plus Guam. Tipped workers there earn the full state minimum wage before tips. Washington leads at $17.13.
Does my employer have to make up my tips if I don't reach minimum wage?
Yes, wherever a tip credit is allowed. Cash wage plus tips must equal at least the full applicable minimum wage each pay period, and the employer pays the difference when it doesn't.
What if my city has a higher minimum wage than my state?
The highest rate wins among federal, state, and local. Many cities set rates above their state floor, so check your city ordinance, not just the state table.
Do tips count toward overtime pay for tipped employees?
Overtime is calculated on the full minimum wage at time and a half, not on the $2.13 cash wage. The tip credit still applies within the overtime math, but the base rate is the full minimum.
Check your state's numbers
Tables go stale; wage laws don't sit still. Look up your current rate on the tipped minimum wage data tool, and if your paycheck math looks wrong, read how overtime works for tipped employees. For a steady stream of practical wage guides, subscribe to the newsletter, it is free.