Written by Munir Afridi. Updated October 2026. Rates verified against the US Department of Labor State Minimum Wage Laws and Minimum Wages for Tipped Employees tables, both revised July 1, 2026, plus the 2027 announcement from each state agency and the Florida step that took effect September 30, 2026. Take-home figures use IRS Revenue Procedure 2025-32 for tax year 2026. Full source list at the foot of the page.
As of October 2026 the federal minimum wage is $7.25 an hour and 20 states use it as their effective floor. The other 31 states pay more. The highest rate in the country is the District of Columbia at $18.40, and the highest state is Washington at $17.13, followed by New York at $17.00 downstate, Connecticut at $16.94 and California at $16.90. Nineteen jurisdictions, 18 states plus DC, now sit at or above $15.00. Fifteen states have a confirmed increase on January 1, 2027, led by Michigan moving from $13.73 to $15.00.
Sources: US Department of Labor, State Minimum Wage Laws (revised July 1, 2026); Florida Constitution Article X Section 24 step effective September 30, 2026; individual state agency announcements for 2027, each named in the table below.
Every state and the District of Columbia, with the tipped cash wage and the confirmed rate for January 1, 2027. "Full wage" in the tipped column means the state allows no tip credit, so tipped workers must receive the full minimum wage before any tips.
| State | 2026 rate | Tipped cash wage | Jan 1, 2027 | Notes |
|---|---|---|---|---|
| Alabama | $7.25 | $2.13 | No change | No state law, federal rate applies |
| Alaska | $14.00 | Full wage | $15.00 Jul 1 | No tip credit |
| Arizona | $15.15 | $12.15 | $15.65 | |
| Arkansas | $11.00 | $2.63 | No change | Employers with 4 or more staff |
| California | $16.90 | Full wage | $17.40 | No tip credit |
| Colorado | $15.16 | $12.14 | $15.71 | |
| Connecticut | $16.94 | $6.38 | $17.48 | Bartender cash wage $8.23 |
| Delaware | $15.00 | $2.23 | No change | |
| District of Columbia | $18.40 | $10.30 | Jul 1 review | Highest in the nation |
| Florida | $15.00 | $11.98 | Sep 30 review | Rose to $15.00 on Sep 30, 2026 |
| Georgia | $7.25 | $2.13 | No change | State law $5.15, federal applies |
| Hawaii | $16.00 | $14.75 | No change | Highest tipped cash wage |
| Idaho | $7.25 | $3.35 | No change | |
| Illinois | $15.00 | $9.00 | No change | Employers with 4 or more staff |
| Indiana | $7.25 | $2.13 | No change | |
| Iowa | $7.25 | $4.35 | No change | |
| Kansas | $7.25 | $2.13 | No change | |
| Kentucky | $7.25 | $2.13 | No change | |
| Louisiana | $7.25 | $2.13 | No change | No state law, federal rate applies |
| Maine | $15.10 | $7.55 | $15.70 | Tipped cash wage $7.85 in 2027 |
| Maryland | $15.00 | $3.63 | No change | |
| Massachusetts | $15.00 | $6.75 | No change | |
| Michigan | $13.73 | $5.49 | $15.00 | Largest 2027 increase |
| Minnesota | $11.41 | Full wage | $11.87 | No tip credit |
| Mississippi | $7.25 | $2.13 | No change | No state law, federal rate applies |
| Missouri | $15.00 | $7.50 | No change | CPI indexing repealed by HB 567 |
| Montana | $10.85 | Full wage | $11.20 | No tip credit, $4.00 small-firm rate |
| Nebraska | $15.00 | $2.13 | $15.26 | Flat 1.75% a year under LB 258 |
| Nevada | $12.00 | Full wage | No change | No tip credit |
| New Hampshire | $7.25 | $3.27 | No change | |
| New Jersey | $15.92 | $6.05 | $16.48 | Small and seasonal rate $15.23 |
| New Mexico | $12.00 | $3.00 | No change | |
| New York | $17.00 | $11.35 | No change | $16.00 upstate, off-ramp triggered |
| North Carolina | $7.25 | $2.13 | No change | |
| North Dakota | $7.25 | $4.86 | No change | |
| Ohio | $11.00 | $5.50 | $11.40 | Applies at $405,000 gross receipts |
| Oklahoma | $7.25 | $2.13 | No change | $2.00 for the smallest employers |
| Oregon | $15.55 | Full wage | Jul 1 review | Portland metro $16.80, rural $14.55 |
| Pennsylvania | $7.25 | $2.83 | No change | |
| Rhode Island | $16.00 | $3.89 | $17.00 | |
| South Carolina | $7.25 | $2.13 | No change | No state law, federal rate applies |
| South Dakota | $11.85 | $5.93 | $12.30 | Tipped cash wage $6.15 in 2027 |
| Tennessee | $7.25 | $2.13 | No change | No state law, federal rate applies |
| Texas | $7.25 | $2.13 | No change | |
| Utah | $7.25 | $2.13 | No change | |
| Vermont | $14.42 | $7.21 | Not announced | Indexed, 2027 rate still pending |
| Virginia | $12.77 | $2.13 | $13.75 | Largest tip credit, $10.64 |
| Washington | $17.13 | Full wage | $17.73 | Highest state rate, no tip credit |
| West Virginia | $8.75 | $2.62 | No change | Employers with 6 or more staff |
| Wisconsin | $7.25 | $2.33 | No change | |
| Wyoming | $7.25 | $2.13 | No change | State law $5.15, federal applies |
Basic rates from the US Department of Labor State Minimum Wage Laws table, revised July 1, 2026. Tipped cash wages from the Department of Labor Minimum Wages for Tipped Employees table, revised July 1, 2026. Florida shows the $15.00 rate effective September 30, 2026, which post-dates the federal table. New York shows the downstate rate; the rest of the state is $16.00. Local ordinances in some cities and counties are higher than the state rate and are not shown here.
Each bar grows from the 2026 rate to the confirmed 2027 rate. Annual figures are the hourly increase multiplied by 2,080 hours. Rates verified October 26, 2026 against each state agency.
The federal minimum wage is $7.25 an hour, set by the Fair Labor Standards Act and unchanged since July 24, 2009. That is 17 years and 3 months at the same number, the longest gap since the federal minimum wage was created in 1938. For a worker on 2,080 hours a year, the full-time standard of 40 hours over 52 weeks, it comes to $15,080 of gross pay.
State law can raise that floor but cannot lower it. Where a state rate is higher, the state rate applies to employers covered by both laws. Where a state has no minimum wage law, or sets one below $7.25, the federal rate applies to any employer covered by the Fair Labor Standards Act, which is most employers with at least $500,000 in annual sales and almost anyone whose staff handle goods that moved between states. Georgia and Wyoming both still have $5.15 on the books, which is why their state law reads lower than what almost every worker there is actually paid.
Alabama, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, New Hampshire, North Carolina, North Dakota, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Wisconsin and Wyoming. Five of them, Alabama, Louisiana, Mississippi, South Carolina and Tennessee, have no state minimum wage statute at all. None of the 20 has a scheduled increase.
Fifteen states have a published, confirmed increase on January 1, 2027. Vermont indexes annually and had not announced its 2027 rate as of October 26, 2026, so the real count may become 16. Three more jurisdictions adjust later in the year rather than in January: Alaska rises to $15.00 on July 1, 2027 under the schedule voters approved, and the District of Columbia and Oregon both review on July 1. Florida reaches the end of its voter-approved ladder and begins inflation indexing on September 30, 2027.
| State | 2026 | Jan 1, 2027 | Increase | Per year at 2,080 hrs |
|---|---|---|---|---|
| Washington | $17.13 | $17.73 | $0.60 | $1,248 |
| Connecticut | $16.94 | $17.48 | $0.54 | $1,123 |
| California | $16.90 | $17.40 | $0.50 | $1,040 |
| Rhode Island | $16.00 | $17.00 | $1.00 | $2,080 |
| New Jersey | $15.92 | $16.48 | $0.56 | $1,165 |
| Colorado | $15.16 | $15.71 | $0.55 | $1,144 |
| Arizona | $15.15 | $15.65 | $0.50 | $1,040 |
| Maine | $15.10 | $15.70 | $0.60 | $1,248 |
| Nebraska | $15.00 | $15.26 | $0.26 | $541 |
| Michigan | $13.73 | $15.00 | $1.27 | $2,642 |
| Virginia | $12.77 | $13.75 | $0.98 | $2,038 |
| South Dakota | $11.85 | $12.30 | $0.45 | $936 |
| Minnesota | $11.41 | $11.87 | $0.46 | $957 |
| Ohio | $11.00 | $11.40 | $0.40 | $832 |
| Montana | $10.85 | $11.20 | $0.35 | $728 |
Michigan has the largest raise in the country at $1.27 an hour, worth $2,641.60 a year before tax. It is the last step of the schedule that followed the 2024 Michigan Supreme Court decision, and the US Department of Labor table lists it directly: the Michigan minimum wage rises to $15.00 on January 1, 2027 and is adjusted by formula after that. Rhode Island is second at a flat $1.00, Virginia third at $0.98. Nebraska is last at $0.26, for reasons covered below.
2027 rates verified October 26, 2026 against: Washington Department of Labor and Industries 2027 minimum wage announcement; Connecticut Governor press release of August 5, 2026 (employment cost index up 3.2% for the year to June 30, 2026); California Department of Industrial Relations release 2026-66 of August 13, 2026, certified by the Department of Finance on July 31, 2026; New Jersey Department of Labor and Workforce Development press release of September 29, 2026; Maine Department of Labor 2027 workplace poster; Minnesota Department of Labor and Industry; South Dakota Department of Labor and Regulation; Ohio Department of Commerce 2027 minimum wage poster (rev. 9/30/26); Montana Department of Labor and Industry; Code of Virginia 40.1-28.10; US Department of Labor for Michigan; Rhode Island and Colorado as reported in their 2027 schedules; Arizona per the Industrial Commission increase reported September 11, 2026. The Arizona agency site was unreachable behind a bot check on the run date, so the Arizona figure is carried from that report rather than from the agency page.
New York is the one indexed state standing still. The New York State Department of Labor states plainly that on January 1, 2027 the New York minimum wage will stay the same: $17.00 in New York City, Long Island and Westchester, and $16.00 in the rest of the state.
New York law normally lifts the minimum wage with inflation each year, but it also carries conditions the Department calls off-ramps, which suspend an automatic increase when certain economic tests are met. The Department says the conditions for one of those off-ramps have been met for 2027, and notes that the Governor has proposed changing the off-ramp provisions so the inflation increase could go ahead. Until that happens, a New York City worker on the minimum keeps the same $35,360 a year in 2027 that they earned in 2026, while a worker across the Hudson in New Jersey moves from $15.92 to $16.48.
One part of New York pay does rise on January 1, 2027. Home care aides go to $20.00 an hour downstate and $19.00 in the rest of the state.
Several published state tables still list Missouri and Nebraska as pending an inflation adjustment for 2027. Both figures changed after the votes that created them, and both changes are worth knowing before you budget for next year.
Proposition A, approved by Missouri voters in November 2024, raised the state minimum wage to $15.00 for 2026 and scheduled yearly cost-of-living increases from 2027. House Bill 567, signed in 2025, removed those automatic annual increases. Missouri stays at $15.00, with no indexed rise in 2027 and none scheduled after it. The tipped cash wage stays at 50% of the minimum, which is $7.50.
Nebraska voters approved Initiative 433 in 2022, which tied increases after $15.00 to the Midwest consumer price index. Legislative Bill 258 replaced that formula with a flat 1.75% a year. The Midwest index rose 3.6% from August 2025 to August 2026, so the voter formula would have produced $15.55 for January 1, 2027. The flat 1.75% produces $15.26. The difference is $0.29 an hour, or $603.20 a year at 2,080 hours, for every minimum wage worker in the state. The same law created a youth rate of $13.50 for 14 and 15 year olds.
Missouri: House Bill 567 as reported in the Ernst and Young tax alert of August 6, 2025, and the Missouri Department of Labor and Industrial Relations minimum wage page. Nebraska: Legislative Bill 258, with the 3.6% Midwest CPI figure and the $15.55 comparison as reported September 23, 2026. The $603.20 annual figure is our own arithmetic at 2,080 hours.
The hourly rate is the headline. What lands in the account is a different number, and the gap is not the same at every rate. The table below runs each rate over 2,080 hours and applies the 2026 federal rules for a single filer with no other income, no dependants and no state income tax: the $16,100 standard deduction, the 10% bracket to $12,400 of taxable income and 12% above it, plus 7.65% in Social Security and Medicare.
| Hourly | Where | Gross a year | Federal income tax | Social Security + Medicare | Take-home a year | A month |
|---|---|---|---|---|---|---|
| $7.25 | Federal floor, 20 states | $15,080 | $0 | $1,153.62 | $13,926.38 | $1,160.53 |
| $8.75 | West Virginia | $18,200 | $210.00 | $1,392.30 | $16,597.70 | $1,383.14 |
| $10.85 | Montana | $22,568 | $646.80 | $1,726.45 | $20,194.75 | $1,682.90 |
| $11.00 | Ohio | $22,880 | $678.00 | $1,750.32 | $20,451.68 | $1,704.31 |
| $12.77 | Virginia | $26,561.60 | $1,046.16 | $2,031.96 | $23,483.48 | $1,956.96 |
| $13.73 | Michigan, 2026 | $28,558.40 | $1,247.01 | $2,184.72 | $25,126.67 | $2,093.89 |
| $15.00 | Seven states exactly | $31,200 | $1,564.00 | $2,386.80 | $27,249.20 | $2,270.77 |
| $16.90 | California | $35,152 | $2,038.24 | $2,689.13 | $30,424.63 | $2,535.39 |
| $17.00 | New York downstate | $35,360 | $2,063.20 | $2,705.04 | $30,591.76 | $2,549.31 |
| $17.13 | Washington | $35,630.40 | $2,095.65 | $2,725.73 | $30,809.03 | $2,567.42 |
| $18.40 | District of Columbia | $38,272 | $2,412.64 | $2,927.81 | $32,931.55 | $2,744.30 |
A full-time federal minimum wage worker pays no federal income tax at all. Gross pay of $15,080 sits $1,020 below the 2026 standard deduction of $16,100, so taxable income is zero. The entire $1,153.62 deduction from that paycheck is Social Security and Medicare, which the standard deduction does not touch. The effective federal burden is 7.65%, lower than at any other rate in the table, which is why the jump from $7.25 to $15.00 is worth more than it first looks: gross rises $16,120 and take-home rises $13,322.82, so 82.6 cents of every extra dollar is kept.
Across the whole range, a DC worker on $18.40 takes home $32,931.55 against $13,926.38 for a worker on the federal floor. That is $19,005.17 more a year for the same hours, and the net ratio is 2.36 to 1 even though the gross ratio is 2.54 to 1. Progressive federal tax closes a little of the gap, and payroll tax closes none of it.
State income tax is the piece this table leaves out, and it moves the answer. Washington, Texas, Florida, Tennessee, Nevada, South Dakota, Wyoming, Alaska and New Hampshire levy no tax on wage income, so a Washington worker keeps the whole $30,809.03. A worker on the same wage in a state with an income tax keeps less. Run your own figure in the paycheck calculator or the take-home pay calculator, both of which apply state rules as well as federal.
Tax figures from IRS Revenue Procedure 2025-32, published in Internal Revenue Bulletin 2025-45, sections 4.01 and 4.14, for tax year 2026. The IRS had not published tax year 2027 inflation adjustments as of October 26, 2026, so the 2027 wage rates above are shown gross only.
A tip credit lets an employer count a worker tips toward the minimum wage and pay a lower cash wage directly. The federal rule sets the cash wage at $2.13 with a maximum credit of $5.12. If tips do not bring the hourly total to the full minimum wage, the employer must pay the shortfall. That last sentence is the part workers most often do not know, and it is the whole protection.
Seven states allow no tip credit at all: Alaska, California, Minnesota, Montana, Nevada, Oregon and Washington. In those states a server is paid the full state minimum wage before a single tip arrives. Everywhere else the size of the credit decides how much of the wage is really guaranteed. The table shows the credit in a selection of states and how much a worker must average in tips each hour to cover it.
| State | Full minimum | Cash wage | Tip credit | Tips needed, 30-hr week |
|---|---|---|---|---|
| Nebraska | $15.00 | $2.13 | $12.87 | $386.10 |
| Delaware | $15.00 | $2.23 | $12.77 | $383.10 |
| Rhode Island | $16.00 | $3.89 | $12.11 | $363.30 |
| Maryland | $15.00 | $3.63 | $11.37 | $341.10 |
| Virginia | $12.77 | $2.13 | $10.64 | $319.20 |
| Connecticut | $16.94 | $6.38 | $10.56 | $316.80 |
| Michigan | $13.73 | $5.49 | $8.24 | $247.20 |
| District of Columbia | $18.40 | $10.30 | $8.10 | $243.00 |
| Federal and 20 states | $7.25 | $2.13 | $5.12 | $153.60 |
| Florida | $15.00 | $11.98 | $3.02 | $90.60 |
| Arizona | $15.15 | $12.15 | $3.00 | $90.00 |
| Hawaii | $16.00 | $14.75 | $1.25 | $37.50 |
Two numbers in that table are worth sitting with. Hawaii guarantees a tipped worker $14.75 an hour in cash, which is higher than the full minimum wage of 32 states. A server in Honolulu is guaranteed more before tips than a non-tipped worker is guaranteed in Texas, Pennsylvania or Ohio. At the other end, Nebraska pays a $2.13 cash wage against a $15.00 minimum, a credit of $12.87. A Nebraska server must average $386.10 in tips over a 30-hour week before the employer owes a cent beyond the $63.90 of cash wages.
The legal protection is real but it is checked over a pay period, not a shift. A slow Tuesday where tips fall short can be offset by a busy Saturday inside the same period. The practical effect is that in large-credit states the worker carries the week-to-week risk and the employer carries only the floor.
Tips are taxable income and always have been. What changed is a deduction. Section 70201 of Public Law 119-21 added section 224 to the Internal Revenue Code, which allows a deduction of up to $25,000 of qualified tips per return for tax years 2025 through 2028. It is available whether you itemize or take the standard deduction, and it phases out above $150,000 of modified adjusted gross income, or $300,000 filing jointly. Married filers must file jointly and you need a valid Social Security number.
Two limits matter for anyone working a tipped minimum wage job.
For a tipped worker whose total pay is already near or below the standard deduction, the practical saving can be zero, because there was little or no income tax to remove. A server clearing $34,000 a year in a busy restaurant sees a real cut. A server on a $2.13 cash wage in a quiet diner may see none.
IRS, "What the No Tax on Tips deduction means for you", and the statutory text at Internal Revenue Code section 224 as added by section 70201(a) of Public Law 119-21.
The federal minimum wage last moved on July 24, 2009. The CPI-U index for all urban consumers stood at 215.351 that month. For September 2026, the most recent month published, it is 336.940. Prices are 1.5646 times what they were.
This is why the state map looks the way it does. Twenty states have left the floor where Congress put it and let inflation do the work, while 15 states now index automatically so the rate moves without a vote. That split is the single biggest reason the same job pays $15,080 in one state and $38,272 in the District of Columbia.
CPI-U, US city average, all items, not seasonally adjusted, 1982-84 = 100. July 2009 figure from the BLS Consumer Price Index news release of August 14, 2009, Table 1. September 2026 figure from the BLS Consumer Price Index news release of October 14, 2026, which also reports 3.7% inflation over the twelve months to September 2026. Arithmetic is ours. Try your own comparison in the inflation calculator.
Often, and the state table will not tell you. Where a city, county or state region sets a higher rate, the highest applicable rate wins. Oregon writes the split into state law with three tiers: $16.80 in the Portland metro area, $15.55 as the standard rate and $14.55 in non-urban counties. New York runs two rates, $17.00 downstate and $16.00 upstate. Several cities in California, Colorado, Arizona, Washington and Illinois sit well above their state rate, and a handful index to local inflation on their own schedule.
There are thresholds inside state law too, and they catch people out. Ohio applies its $11.00 rate only to employers with gross receipts of $405,000 or more, and the federal $7.25 below that; the threshold rises to $419,000 for 2027. Montana allows a $4.00 rate for a business not covered by the Fair Labor Standards Act with gross annual sales of $110,000 or less. Arkansas and Illinois apply only to employers with four or more staff, West Virginia to six or more. New Jersey runs a lower rate of $15.23 for seasonal employers and those with fewer than six people, rising to $16.25 in 2027. Before concluding that a rate applies to you, check the employer size and receipts test in your own state.
The rate is the start of the answer. Hours, filing status, state tax and overtime decide the rest. These tools are free and need no sign-up.
As of October 2026 the federal minimum wage is 7.25 dollars an hour and 20 states use it as their effective floor. Thirty-one states pay more. The District of Columbia is highest at 18.40 dollars, then Washington at 17.13 dollars, New York at 17.00 dollars in New York City, Nassau, Suffolk and Westchester, Connecticut at 16.94 dollars and California at 16.90 dollars. Nineteen jurisdictions, eighteen states plus the District of Columbia, are at or above 15.00 dollars an hour. Source: US Department of Labor, State Minimum Wage Laws, table revised July 1, 2026, with Florida at the 15.00 dollar step that took effect September 30, 2026.
Twenty states have an effective minimum wage of 7.25 dollars an hour: Alabama, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, New Hampshire, North Carolina, North Dakota, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Wisconsin and Wyoming. Five of those, Alabama, Louisiana, Mississippi, South Carolina and Tennessee, have no state minimum wage law at all, so the federal rate applies to employers covered by the Fair Labor Standards Act. Georgia and Wyoming have state rates of 5.15 dollars, which the higher federal rate overrides for covered employers.
Fifteen states have a confirmed increase on January 1, 2027: Arizona to 15.65, California to 17.40, Colorado to 15.71, Connecticut to 17.48, Maine to 15.70, Michigan to 15.00, Minnesota to 11.87, Montana to 11.20, Nebraska to 15.26, New Jersey to 16.48, Ohio to 11.40, Rhode Island to 17.00, South Dakota to 12.30, Virginia to 13.75 and Washington to 17.73. Vermont indexes annually and had not published its 2027 rate as of October 26, 2026. Alaska rises to 15.00 dollars on July 1, 2027, and the District of Columbia and Oregon adjust on July 1 as well. Michigan has the largest single increase, 1.27 dollars an hour, which is 2,641.60 dollars a year at 2,080 hours.
Washington has the highest state minimum wage at 17.13 dollars an hour, rising to 17.73 dollars on January 1, 2027 per the Washington Department of Labor and Industries 2027 announcement. The District of Columbia is higher at 18.40 dollars an hour, effective July 1, 2026, but it is a district rather than a state. Among states, Washington is followed by New York at 17.00 dollars downstate, Connecticut at 16.94 dollars and California at 16.90 dollars.
The New York State Department of Labor states that the minimum wage will stay the same on January 1, 2027, at 17.00 dollars in New York City, Long Island and Westchester and 16.00 dollars in the rest of the state. New York law ties annual increases to inflation but also contains conditions known as off-ramps that can suspend an automatic increase. The Department says the conditions for one of those off-ramps have been met for 2027. New York is the only indexed state standing still next year. Home care aide minimum wages do rise on January 1, 2027, to 20.00 dollars downstate and 19.00 dollars elsewhere.
At 2,080 hours a year, 7.25 dollars an hour is 15,080 dollars of gross pay. That is below the 2026 single standard deduction of 16,100 dollars, so the federal income tax is zero. Social Security and Medicare still take 7.65 percent, or 1,153.62 dollars, leaving 13,926.38 dollars a year, about 1,160.53 dollars a month. At 15.00 dollars an hour the gross is 31,200 dollars, federal income tax is 1,564 dollars and payroll tax is 2,386.80 dollars, leaving 27,249.20 dollars. At the 18.40 dollar District of Columbia rate the take-home is 32,931.55 dollars. Figures use Revenue Procedure 2025-32 for tax year 2026, single filer, no state income tax and no credits.
The federal tipped cash wage is 2.13 dollars an hour with a maximum tip credit of 5.12 dollars, and roughly twenty states follow it. Seven states allow no tip credit at all and require the full minimum wage before tips: Alaska, California, Minnesota, Montana, Nevada, Oregon and Washington. Hawaii has the highest cash wage among tip-credit states at 14.75 dollars, which is higher than the full minimum wage of 32 states. Virginia and Nebraska have the largest tip credits at 10.64 and 12.87 dollars an hour, meaning a server there must average that much in tips every hour before the employer owes anything more. Source: US Department of Labor, Minimum Wages for Tipped Employees, revised July 1, 2026.
Tips are still taxable income, but Internal Revenue Code section 224, added by section 70201 of Public Law 119-21, allows a deduction of up to 25,000 dollars of qualified tips per return for tax years 2025 through 2028. It is available whether or not you itemize and phases out above 150,000 dollars of modified adjusted gross income, or 300,000 dollars filing jointly. The deduction reduces income tax only. Qualified tips remain subject to Social Security and Medicare withholding, and employers still pay their share. The occupation must be one that customarily and regularly received tips on or before December 31, 2024.
Every hourly figure on this page comes from the source named beside it. Every annual, take-home, tip credit and purchasing power figure was computed for this page with decimal arithmetic at 2,080 hours and checked a second time. Where a lower-tier source is used, it is named and dated in the section that uses it.
This page is information, not legal, tax or employment advice, and it is not a substitute for the wage law of your state. Minimum wage rules change, and city and county ordinances, industry carve-outs, youth and training rates, employer size tests and exemptions can all change the rate that applies to a particular job. Take-home figures assume a single filer with no other income, no dependants, no credits and no state or local income tax, so your own result will differ. Check your state labor department and, where pay may have been underpaid, speak to the US Department of Labor Wage and Hour Division or an employment lawyer.