Tip credit calculator
Enter one workweek: your hours, your hourly cash wage and the tips you kept. See whether you reached minimum wage, and how much your employer has to make up if you did not.
How the tip credit math works
In most states your employer can pay a cash wage below minimum wage and count part of your tips toward the rest. The part they count is the tip credit. Your cash wage plus the tips you keep has to reach the full minimum wage for every hour you work, measured one workweek at a time.
So the test is simple: hours times the minimum wage, compared with your cash wages plus your tips for the same week. If the total falls short, your employer owes the difference on that paycheck. A great week does not cover a slow one.
Overtime works off the full minimum wage too. For hours past 40 in a week, the cash rate has to be one and a half times the minimum wage, minus the same tip credit, not one and a half times your cash wage.
Questions
What is the tipped minimum wage?
It is the lowest hourly cash wage an employer can pay a tipped worker, as long as tips bring the worker up to the full minimum wage. Under federal law it is $2.13 an hour. Many states set it higher, and some require the full minimum wage before tips.
What happens if my tips do not cover minimum wage?
Your employer has to pay the difference for that workweek, on that paycheck. It often shows up on a stub as a tip make-up or minimum wage adjustment line.
Do tips I give to bussers or the bar count?
No. Only the tips you keep count toward your minimum wage. Enter your tips after tip-outs and tip pool payments.
Is the calculation done per shift or per week?
Federal law and most states use the workweek. Massachusetts is stricter and measures it per shift. The state law page for your state notes when that applies.
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