Tipped Minimum Wage by State (2026): Cash Wage and Maximum Tip Credit

Most of the top of this list is made up of states that ban the tip credit outright. Hawaii, Arizona, Colorado and Florida still allow a credit but keep it at about $3 or less, which is why they rank this high. DC and New York City make the list with larger credits because their full minimums are high.

A large tip credit means more of the minimum wage depends on customers. Nebraska's credit of $12.87 is more than double the federal maximum of $5.12, even though its cash wage is the federal $2.13.

The middle group is the biggest, with 21 states paying a cash wage between $2.14 and $8.99. Only 7 states sit in the no-credit tier, the same number that pay $9.00 or more with a credit (counting DC).

Since 2022, Florida has raised its minimum by a dollar every Sept. 30, reaching $15.00 in 2026. Because the tip credit stays fixed at $3.02, every step goes straight into the tipped cash wage.

New York hospitality industry tipped wage rates, Jan. 1 to Dec. 31, 2026

Source: New York State Department of Labor, Minimum Wage for Tipped Workers 1/1/26-12/31/26 (P717); U.S. Department of Labor, Wage and Hour Division, Minimum Wages for Tipped Employees (Table of Minimum Hourly Wages for Tipped Employees, by State). Download as image

Tipped cash wage changes after Jan. 1, 2026

Source: Alaska Department of Labor and Workforce Development, Labor Standards and Safety Division, Wage and Hour Administration (minimum wage notice); DC Department of Employment Services, Office of Wage and Hour, District of Columbia Minimum Wage Increase (public notice); Florida Department of Commerce (FloridaCommerce), Florida's Minimum Wage Updated September 30, 2026; Oregon Bureau of Labor and Industries (BOLI), Oregon Minimum Wage Schedule; U.S. Department of Labor, Wage and Hour Division, Minimum Wages for Tipped Employees (Table of Minimum Hourly Wages for Tipped Employees, by State). Download as image

Tipped minimum cash wage rule by state

• 7No tip credit: full minimum wage before tips
• 7Tip credit allowed, cash wage $9.00 or more
• 21Tip credit allowed, cash wage $2.14 to $8.99
• 16Cash wage at the federal $2.13

How does the tip credit actually work?

Think of the minimum wage as a floor your total pay has to reach. In a tip credit state, your employer pays part of that floor in cash and is allowed to count your tips toward the rest. Under federal law the cash part is $2.13 and the credit can be as much as $5.12, which together make the $7.25 federal minimum.

Here's what that looks like in practice. Say you wait tables in Nebraska. Your paycheck rate is $2.13. The other $12.87 of the state's $15.00 minimum is supposed to come from tips. On a slow week when tips fall short, your employer owes you the gap. DC spells this out in its own notice: if tips plus the $10.30 base wage don't reach $18.40, the employer pays the difference.

The credit isn't automatic, either. Employers usually have to tell you in advance that they're taking it. Some states add more steps. North Carolina requires signed tip certifications, and New Jersey attaches advance-notice conditions. Hawaii only allows its small $1.25 credit when wages plus tips come to at least $7.00 more than the minimum.

Which states pay the full minimum wage before tips?

Seven states ban the tip credit: Alaska, California, Minnesota, Montana, Nevada, Oregon and Washington. In those states your tips sit on top of the full minimum wage, not inside it. Washington leads at $17.13, California follows at $16.90, and Oregon's standard rate is $15.55.

Even here the rate can shift with where and for whom you work. Oregon has three tiers: $16.80 in the Portland metro area, $15.55 standard and $14.55 in nonurban counties. Montana's $10.85 applies to businesses with sales over $110,000. In California and Washington, some cities set local minimums higher than the statewide figure, so check your city too.

Why does a $15 minimum wage state still pay servers $2.13?

This trips up a lot of people. A high headline minimum doesn't mean a high tipped wage. Nebraska's minimum is $15.00, yet its tipped cash wage is still $2.13. Virginia's minimum is $12.77 with the same $2.13 cash wage, leaving a tip credit of $10.64. Delaware pays $2.23 in cash against a $15.00 minimum.

So when you compare jobs across state lines, look at the tip credit column, not the minimum wage column. The bigger the credit, the more of your guaranteed pay rides on how busy the room is. Nebraska, Delaware and Rhode Island all allow credits above $12, while the federal cap is $5.12.

Size and type of business can matter as well. Ohio's tipped rates apply to employers with gross receipts of $405,000 or more. West Virginia's law covers employers with six or more employees. In Wisconsin, tipped opportunity employees under 20 can be paid $2.13 in cash during their first 90 days.

What changed for tipped workers in 2026?

Several rates moved after January. Florida's cash wage went from $10.98 to $11.98 on Sept. 30, 2026, because its full minimum rose to $15.00 and the $3.02 credit stayed put. Alaska went from $13.00 to $14.00 on July 1. DC's base wage rose from $10.00 to $10.30 the same day, with the full minimum at $18.40. Oregon raised all three of its tiers on July 1 as well.

New York splits workers by job type. Food service workers in New York City, Long Island and Westchester get a cash wage of $11.35, against $10.70 in the rest of the state. Service employees get more cash and a smaller credit: $14.15 downstate and $13.30 elsewhere. Those rates run Jan. 1 to Dec. 31, 2026.

Michigan is mid-transition. Its tipped cash wage, now $5.49, rises each year until it reaches 50% of the state minimum in 2031, and the state minimum itself goes to $15.00 on Jan. 1, 2027.

What to do if you work for tips or hire tipped staff

For workers, the most useful habit is simple: write down your tips every shift. If your employer's records and yours don't match on a slow week, your own log is evidence. Read the offer letter, too. It should say your cash wage and whether the employer takes a tip credit.

• Check that the cash wage in your offer matches your state's rate for 2026, and your city's if it has its own.
• Ask whether there's a tip pool, who shares in it and whether managers take a cut. Under federal law, employers and managers can't keep employees' tips.
• Look for deductions from tips, such as card processing fees, breakage or uniforms, and check them against your state's wage deduction rules.
• If you run a restaurant or salon, give the required tip credit notice before you take the credit. Put it in writing even where a verbal notice is allowed, and keep a copy on file.
• Track each pay period to make sure tips plus cash wage reach the full minimum, and pay the shortfall when they don't.
• Recheck rates when a state changes mid-year. Florida, Alaska, Oregon and DC all did in 2026.

Does any of this apply to freelancers and gig workers?

The tip credit is an employee rule. If you're truly self-employed, say a freelance bartender who books private events and sets your own rate, there's no tipped minimum wage at all. You get what your contract says.

The catch is labels. A restaurant can't skip the minimum by calling servers independent contractors when it sets their schedules and tells them how to work. If you're in that spot, you may be misclassified, which can mean back pay for every shift paid below the floor. Read the agreement closely before you sign anything that calls you a contractor. Look at who sets your hours, who sets prices and who supplies the equipment. If the answer to all three is the restaurant, the contractor label probably won't hold up.

Sources and method

Every number on this page comes from the sources below, each opened and read on or before October 18, 2026. A second, independent review checked every figure against its source and corrected anything that did not match. 51 of 51 state entries were confirmed; any that could not be are marked "Not yet confirmed" and left out of every count and chart.

1. U.S. Department of Labor, Wage and Hour Division, Minimum Wages for Tipped Employees (Table of Minimum Hourly Wages for Tipped Employees, by State) (July 1, 2026 (last revised July 1, 2026))
2. Florida Department of Commerce (FloridaCommerce), Florida's Minimum Wage Updated September 30, 2026 (September 2026)
3. Florida Department of Commerce (FloridaCommerce), Florida Minimum Wage History 2000 to 2026 (September 2026)
4. DC Department of Employment Services, Office of Wage and Hour, District of Columbia Minimum Wage Increase (public notice) (2026 notice, rates effective July 1, 2026)
5. New York State Department of Labor, Minimum Wage for Tipped Workers 1/1/26-12/31/26 (P717) (P717 (12/25), rates for Jan. 1 to Dec. 31, 2026)
6. Alaska Department of Labor and Workforce Development, Labor Standards and Safety Division, Wage and Hour Administration (minimum wage notice) (Accessed 2026-10-18; notice of July 1, 2026 increase)
7. Oregon Bureau of Labor and Industries (BOLI), Oregon Minimum Wage Schedule (Accessed 2026-10-18; rates July 1, 2026 to June 30, 2027)