Tip Credit Calculator
Enter the cash wage you pay, tips for the workweek, and hours. See whether cash + tips clear the full minimum wage, whether the cash floor is met, and how much make-up is owed. Select any no-tip-credit state to force tip credit to $0.
Try a scenario
Your inputs
Make-up owed
$0.00
Full MW obligation $290.00 − cash $85.20 − tips $250.00
Hourly breakdown
- Cash wage paid
- $2.13/hr
- Tips per hour
- $6.25/hr
- Tip credit claimed (capped)
- $5.12/hr
- Effective rate (cash + credit)
- $7.25/hr
- Full minimum wage
- $7.25/hr
- Min cash wage
- $2.13/hr
Federal (FLSA default) — note
Federal floor: $2.13 cash wage, $5.12 max tip credit against $7.25. Cash wages + tips must reach $7.25 each workweek; employer makes up any shortfall.
Estimates whether cash wages plus tips reach the full minimum wage for one workweek and whether the cash wage meets the jurisdiction cash floor. Does not track tip-producing vs supporting duties under the vacated 80/20/30 Final Rule, dual-job occupation splits, overtime premiums on the full minimum wage, tip-pool validity, or notice compliance. Confirm local ordinances and any occupation-specific rates before payroll changes. Read the full methodology →
Frequently asked questions
What is a tip credit?
Under the FLSA, a covered employer may count a portion of a tipped employee’s tips toward the federal $7.25 minimum wage. The federal cash floor is $2.13 per hour and the maximum federal tip credit is $5.12 per hour. Cash wages plus tips actually received must still equal at least the full minimum wage each workweek; the employer makes up any shortfall.
Which states prohibit a tip credit?
Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington require the full state minimum wage in cash before tips. In those states the calculator sets tip credit to $0 and treats the cash floor as the full state minimum wage.
Does this calculator enforce the 80/20 rule?
No. The DOL’s 2021 Dual Jobs Final Rule (the 80/20/30 side-work limits) was vacated by the Fifth Circuit in Restaurant Law Center v. DOL (2024), and DOL restored the pre-2021 dual-jobs regulation text. This tool models cash wage + tip credit + weekly make-up only. It does not track tip-producing vs supporting minutes.
What is the weekly make-up obligation?
If cash wages plus tips for the workweek fall short of the full minimum wage (federal or higher state rate), the employer must pay the difference on the regular payday. “They usually make it up next week” is not a defense. The calculator shows that shortfall as make-up owed.
Why can I select a no-tip-credit state?
So multi-state operators can see the cash-floor jump when work happens in Alaska, California, Minnesota, Montana, Nevada, Oregon, or Washington. Selecting those states forces tip credit to $0 and compares your cash wage to the full state minimum wage.
Does this cover overtime for tipped employees?
No. When a tip credit is taken, overtime premium is computed from the full minimum wage (or higher regular rate), not from the $2.13 cash rate. Use a separate overtime calculator for premium hours.
Source: 29 CFR §531.60
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About Clockspot
Clockspot helps small businesses track employee time and keep payroll-ready records. Used in all 50 states since 2007, we focus on getting time and pay right — including the wage-and-hour rules that shape both.
Tip-credit compliance depends on work location, cash floors, weekly tips, and clean time records — Clockspot helps keep hours and locations straight before payroll locks. See how Clockspot tracks hours by location.