This page's default: cash wage $2.13/hour, 40 hours, tips $100 → cash $85.20 + tips $100 = $185.20. The federal floor is 40 × $7.25 = $290. The employer must make up $104.80.
That is the rule in DOL Fact Sheet #15 (FLSA § 3(m)): cash plus tips in the same workweek must reach $7.25 per hour.
This page is the federal tip credit, not the federal minimum wage calculator that only multiplies hours × $7.25. It is not overtime, and it is not Mexican or Guatemalan labor law.
Read the evergreen explainer →
Quick examples (use the calculator above)
| Scenario | Input | Result |
|---|---|---|
| Page default | $2.13/hr · 40 hrs · $100 tips | Makeup $104.80 to the $290 floor |
| Exact $5.12/hr in tips | $2.13/hr · 40 hrs · $204.80 tips | No makeup. Total $290 |
| Busy week | $2.13/hr · 40 hrs · $250 tips | No makeup. Total $335.20 (credit still capped at $5.12/hr) |
| Higher cash wage | $5.00/hr · 40 hrs · $80 tips | Makeup $10.00 (max credit $2.25/hr) |
| Full federal minimum | $7.25/hr · 40 hrs · $0 tips | No tip credit. Total $290 |
How the federal tip credit is calculated
required floor = hours × $7.25
maximum tip credit per hour = max(0, $7.25 − cash wage)
makeup = max(0, required floor − cash wages − tips actually received)
The employer may claim a tip credit only up to tips actually received. Paying $2.13 does not let the employer keep $5.12 of your tips; those tips are yours. The credit only reduces how much cash the employer must put on the check if tips already cover the gap.
Worked example: this page’s default
- Cash wages: 40 × $2.13 = $85.20.
- Tips received: $100.00.
- Cash + tips: $185.20.
- Floor: 40 × $7.25 = $290.00.
- Makeup: $290.00 − $185.20 = $104.80.
What this calculator does not include
- State cash-wage floors or states that ban the tip credit
- Overtime at 1.5× after 40 hours — use the FLSA overtime calculator
- Dual jobs, tip pools, credit-card fees, or compulsory service charges
- Whether the employer gave the required tip-credit notice
Educational estimate based on DOL Wage and Hour Fact Sheet #15 and the FLSA § 3(m) tip credit. Confirm your state rule and your pay stub before acting on it.
Official sources
DOL Fact Sheet #15 says an employer that takes a tip credit must pay at least $2.13 per hour in direct (cash) wages. The federal minimum is still $7.25: cash plus tips in the workweek must reach that amount. If they do not, the employer makes up the difference.
Maximum credit per hour = $7.25 − cash wage. When cash is $2.13, the maximum credit is $5.12. The credit cannot exceed tips actually received. This page’s default: 40 hours, $2.13 cash, and $100 tips → $104.80 makeup to the $290 floor.
No. Some states ban the tip credit or require a higher cash wage. The rule more protective of the employee applies. This calculator is federal only. It is not Mexican or Guatemalan labor law.
No. Fact Sheet #15 treats a compulsory service charge as wages, not tips. This version also does not compute overtime, dual jobs, or tip pools.