Overtime for tipped employees is one of the places a restaurant paycheck most often comes up short. If you are paid a low cash wage and your employer counts your tips toward the minimum wage, your overtime rate is not simply 1.5 times that cash wage. It is figured on the full minimum wage, and the difference is a few dollars for every overtime hour.
This guide covers how overtime is calculated for servers, bartenders and other tipped workers, which states add daily overtime, and what to look for on your stub.
Overtime is counted by the workweek
Federal law (the Fair Labor Standards Act, or FLSA) requires 1.5 times your regular rate for every hour over 40 in a workweek. A workweek is a fixed, repeating block of seven days (168 hours) that your employer chooses. It can start on any day and at any hour, but it cannot move around to avoid overtime.
Each workweek stands alone. Your employer cannot average two weeks together. If you work 50 hours one week and 30 the next, you are owed 10 hours of overtime for the first week, even though the two weeks add up to 80.
Only hours you actually work count toward the 40. Under federal law, holiday pay, sick days and vacation time paid for hours you did not work do not push you into overtime, though some employers count them anyway.
How overtime is calculated for tipped employees
When your employer takes a tip credit, it pays you a lower cash wage and counts part of your tips toward the minimum wage. Under federal law the cash wage can be as low as $2.13, and the tip credit can be as high as $5.12, which together make the $7.25 federal minimum.
For overtime, your regular rate is the full minimum wage, not the cash wage. The overtime rate is 1.5 times that, and the employer may subtract the same tip credit it takes on a regular hour. It cannot take a bigger tip credit on an overtime hour.
Overtime cash rate = (1.5 x full minimum wage) minus the tip credit
At the federal numbers:
- 1.5 x $7.25 = $10.875
- $10.875 minus the $5.12 tip credit = $5.755 an hour
Rounded to the cent, that is $5.76. Some payroll systems carry the extra decimal and pay $5.755 an hour, then round the total. Either way the difference is less than a cent an hour, so do not worry if your stub shows $5.755 or $5.76.
What you should worry about is $3.20. That is 1.5 x $2.13 ($3.195), and it is the classic mistake: multiplying the cash wage instead of the full minimum wage. It shorts you about $2.56 for every overtime hour.
A quick shortcut: your overtime cash rate should equal your hourly cash rate plus half the full minimum wage. At $2.13 federal, that is $2.13 + $3.625 = $5.755. If your employer pays you $3.00 an hour, it is $3.00 + $3.625 = $6.625.
The shortcut works when your regular rate is the minimum wage. Bonuses and shift differentials raise it (see below).
A worked example at $2.13
Say you work 46 hours in one workweek at a federal tipped cash wage of $2.13, and your tips easily cover the rest of the minimum wage.
| Line | Hours | Rate | Pay |
|---|---|---|---|
| Regular | 40 | $2.13 | $85.20 |
| Overtime | 6 | $5.755 | $34.53 |
| Total cash wages | 46 | $119.73 |
If payroll rounds the rate to $5.76 first, the overtime line is $34.56. Three cents apart, both fine.
If payroll used 1.5 x $2.13 instead, the overtime line would be 6 x $3.195 = $19.17. That is $15.36 short for one week. Over a few months of regular doubles it adds up.
Here is why $5.755 is right. For 46 hours, the law requires 40 x $7.25 plus 6 x $10.875, which is $355.25. Your employer covers $235.52 of that with the tip credit (46 hours x $5.12) and must pay the remaining $119.73 in cash. That matches the table.
State minimum wages change the numbers
When your state has a higher minimum wage, the same formula uses the state numbers. A few rates in effect in October 2026:
| State | Minimum / cash wage | Overtime cash rate |
|---|---|---|
| Arizona | $15.15 / $12.15 | 1.5 x $15.15 minus $3.00 = $19.725 |
| Massachusetts | $15.00 / $6.75 | 1.5 x $15.00 minus $8.25 = $14.25 |
| New Mexico | $12.00 / $3.00 | 1.5 x $12.00 minus $9.00 = $9.00 |
Seven states do not allow a tip credit at all: Alaska, California, Minnesota, Montana, Nevada, Oregon and Washington. There you are paid at least the full minimum wage, and overtime is 1.5 times your actual hourly rate. Under federal law, your tips themselves are never part of the regular rate.
Some cities and counties set higher minimums than their state. Your state page lists the current numbers and the local exceptions we know about.
States with daily overtime and double time
Most states follow the federal 40-hour weekly rule and nothing more. A handful add daily overtime or a seventh-day rule:
| State | Extra rule |
|---|---|
| California | 1.5x after 8 hours in a workday, 2x after 12. On the seventh consecutive day of a workweek, the first 8 hours are 1.5x and anything over 8 is 2x. |
| Alaska | 1.5x after 8 hours in a day, for employers with 4 or more employees. A state-approved 10-hour-day plan moves the line to 10. |
| Nevada | 1.5x after 8 hours in a 24-hour period, for workers earning less than 1.5 times the minimum wage ($18.00 an hour). A mutually agreed 4-day, 10-hour schedule is excepted. |
| Colorado | 1.5x after 12 hours in a workday or 12 consecutive hours, even across two workdays. |
| Connecticut | In restaurant jobs, every hour on the seventh consecutive day of work is paid at least 1.5 times the minimum wage. |
| Kentucky | If you work all seven days of a workweek, the seventh day is paid at 1.5x, unless your employer did not allow you to work over 40 hours that week. |
California is the state that adds double time. You are not paid overtime twice for the same hour: when daily and weekly overtime overlap, the count that gives you more overtime applies.
The TruWage checker calculates daily overtime at 1.5x. It does not yet calculate double time or seventh-day premiums. When your state has them, the result says so, and you should add those hours up yourself.
Why a pay period that splits a workweek matters
Your pay period and your workweek are different things. A biweekly pay period holds two whole workweeks, so check each week on its own. Forty hours a week times two is 80, but 50 plus 30 is also 80, and only one of those pays overtime.
Semi-monthly pay (the 1st to the 15th, then the 16th to the end of the month) cuts workweeks in half. A week that starts on the 13th might have 25 hours on this stub and 20 on the next. Neither stub shows more than 40, but you worked 45.
Federal rules let the employer pay that overtime on the next regular payday after the week ends, so it may show up one check later. If it never shows up, that is the problem. The checker marks these cut weeks as needing more information and asks for the hours from the rest of the week.
Some bonuses raise your overtime rate
Your regular rate is not just your hourly wage. It also includes:
- Shift differentials (extra pay for nights, weekends or doubles)
- Bonuses you were promised for hitting a target: attendance, sales contests, upsell goals
- Service charges your employer pays out to you, which count as wages (see service charges and tips)
- Commissions
It does not include tips, true gifts like a holiday bonus not tied to your work, bonuses that are purely the employer's choice, or pay for time off.
Say you earn a $40 sales bonus in the 46-hour week above. Spread over 46 hours, that adds about $0.87 to your regular rate. You are owed an extra half of that for each of the 6 overtime hours, about $2.61 more. When a bonus covers several weeks, it is spread back over those weeks the same way.
If you work two jobs for the same employer, such as server shifts and host shifts, all of those hours count toward 40. The overtime rate is usually based on a weighted average of the two rates. See Dual jobs for how mixed duties work.
What to check on your stub
- Hours by workweek. Add up your hours for each workweek, not the whole pay period. Your own clock-in records or a shift tracker help here.
- An overtime line. Every week over 40 hours (or over your state's daily limit) should produce overtime hours on the stub, either this period or the next.
- The overtime rate. It should be at least your cash wage plus half the full minimum wage. At $2.13 federal, that is $5.755 or $5.76. A rate near $3.20 is the classic error.
- Bonus weeks. In a week with a promised bonus or differential, the overtime rate should be higher than usual.
- Split weeks. If your pay period cuts a workweek, look for the overtime on the following stub.
The free paycheck checker runs these numbers for your state from your stub and your hours. The tip credit calculator shows the cash wage and tip credit your state allows. For how the tip credit works in general, see the tip credit explained, and for reading each line of the stub, see how to read a restaurant pay stub.
If the overtime is wrong, what to do if your paycheck is wrong walks through asking payroll and filing a wage claim.
Check your own paycheck
Enter your stub and your hours. The checker applies your state's rules and shows anything that is short, with the rule behind it. Nothing you type leaves your browser.
Questions
Is overtime for servers based on $2.13 an hour?
No. Under federal law, overtime for a tipped employee is 1.5 times the full minimum wage minus the tip credit. At $7.25 and $2.13 that is $5.755 an hour (about $5.76), not 1.5 x $2.13.
Do my tips count toward my overtime rate?
No. Tips are not part of the regular rate used for overtime. Service charges your employer pays out to you are wages, though, and they do count.
Can my employer average two weeks so I do not get overtime?
No. Each workweek stands alone. Fifty hours one week and 30 the next is 10 hours of overtime, even on a biweekly paycheck that totals 80 hours.
Does holiday or sick pay count toward the 40 hours?
Not under federal law. Only hours actually worked count toward 40, though some employers count paid time off anyway. Your state page lists any state rule that differs.
My state has daily overtime. Do I get paid twice for the same hours?
No. When daily and weekly overtime overlap, you are paid under whichever count gives you more overtime hours, not both.
TruWage is a calculator, not legal advice. It is not a law firm and does not refer you to one. Rules change and every situation is different; check with your state labor agency before acting on a result.