Tipped Employee Paycheck Calculator
Enter a cash hourly wage, hours, and reported tips to see gross earnings, the tip credit toward minimum wage, any employer make-up, FICA, estimated federal income tax, and net take-home. Decimal-precise and on-device.
Tipped Employee Paycheck Calculator
Your pay
Direct cash paid by your employer. The federal tipped minimum is $2.13 an hour.
Fractional hours are fine.
Cash and credit-card tips reported for the period, combined.
Minimum wage
Federal is $7.25. Many states set a higher floor or ban the tip credit, so use your state or local rate.
For the tax estimate
Filing status affects the estimated income tax line and whether the tips deduction applies. It does not change the tip credit or FICA.
Excludes qualified tips (capped at $25,000 a year, per return) from the income-tax estimate only. The deduction shrinks by $100 for every full $1,000 of income above $150,000 ($300,000 married filing jointly), and a separate return is not eligible at all. FICA still applies to every tip dollar, and eligibility also depends on your occupation.
No tip credit applies: your cash wage already meets the minimum wage on its own.
Taxes on your tips exceed your cash wages, so your paycheck can be near $0 even though your total earnings are higher. The balance is withheld from wages, not from tips you already took home.
Withheld from this paycheck
FICA uses shared 2026 federal rates. The income tax figure is a simplified annualized estimate, not payroll-accurate withholding.
How to calculate a tipped employee's paycheck
A tipped paycheck is built from two earnings lines and then taxed like any other. Start with cash wages, which is your cash hourly wage times the hours you worked. Add the tips you reported for the period. Add those up and you have your gross earnings, which is the number every tax and minimum-wage rule starts from.
From gross, two things happen. First, the law checks that your cash wage plus tips reached the minimum wage for the hours you worked, and if it did not, your employer owes the difference (the make-up). Second, taxes come out: Social Security and Medicare on the full gross, plus an estimate of federal income tax. What is left is your net take-home.
Work an example. You are paid $2.13 an hour in cash, you worked 40 hours, and you reported $300 in tips. Cash wages are $85.20, tips are $300, so gross is $385.20, which is $9.63 an hour effective. That clears the $7.25 federal minimum, so no employer make-up is owed. FICA takes 7.65% of $385.20 (about $29.47), and a small federal income tax estimate comes off the top, leaving your net take-home. To turn regular and overtime hours into a gross figure first, the Hourly to Paystub Earnings Calculator handles that step, and the Pay Frequency Converter lines up how often those checks land.
Tip credit and the minimum-wage make-up rule
Federal law sets a tipped cash wage of $2.13 an hour. An employer can count up to $5.12 an hour of your tips as a tip credit toward the regular $7.25 federal minimum, because $2.13 plus $5.12 equals $7.25. The credit is only as large as the tips you actually earned, so on a slow shift it shrinks and the employer has to cover more in cash.
The make-up rule is per pay period, not averaged over time. If cash wages plus reported tips come in below minimum wage times hours, your employer owes the shortfall for that period. The calculator shows this as the employer make-up line and flags it prominently when it is above zero. If your cash wage already meets the minimum wage on its own, no tip credit applies and there is nothing to make up.
State rules vary widely. Some states set a higher tipped cash wage, some require the full minimum wage with no tip credit at all, and cities often set their own floor. This tool stays federal for taxes but lets you override the minimum wage field, so set it to your state or local rate to get the credit and make-up math right for where you work.
How tips are taxed (FICA, income tax, and the No Tax on Tips deduction)
Reported tips are wages. They carry the full 6.2% Social Security and 1.45% Medicare that your cash wages do, and they count toward federal income tax. That is why a big tip night can leave a small paycheck: the tax owed on your tips is withheld from your cash wages, not from the tips already in your pocket. When those taxes approach or pass your cash wages, the paycheck can land near zero even though you earned well, and the calculator points that out.
The income tax line here is a simplified estimate. It annualizes your gross by your pay frequency, subtracts the standard deduction for your filing status, applies the 2026 federal brackets, then divides back down to one period. It skips W-4 specifics, pre-tax deductions, and any state or local tax, so treat it as a ballpark. The Gross-Up Calculator runs the FICA and withholding math the other direction when you need a target take-home.
For tax years 2025 through 2028, the No Tax on Tips deduction can lower federal income tax on up to $25,000 of qualified tips. That $25,000 is a per-return cap, the same figure for every filing status, and it is not adjusted for inflation. It is a federal income tax break only: FICA still applies to every tip dollar, and most states still tax tips. The optional toggle applies that deduction to the income tax estimate alone.
Two limits narrow it further. First, the deduction phases out above $150,000 of modified adjusted gross income for single and head-of-household filers, or $300,000 filing jointly, losing $100 for each full $1,000 over the line. Partial thousands are ignored, so $152,600 of MAGI counts as two full thousands and costs $200, not $260. With the full $25,000 of tips the deduction runs out at $400,000 single or $550,000 joint. Second, married taxpayers who file separately are not eligible at all, because the statute requires a joint return, and you need a Social Security number to claim it. The calculator annualizes the period you entered to approximate MAGI, applies both limits, and shows the arithmetic under the results. Since this tool has no field for a spouse's wages or other income, treat that MAGI as a floor: real income from a second job or a partner can push you into the phase-out even when a single paycheck looks small.
From estimate to paystub
These numbers map straight onto a real paystub: a cash wages line, a reported tips line, gross, the tax deductions, and net. Once you have the estimate, you can lay it out as a document to hand a lender or a landlord, or just keep for your own records. To project where your earnings land by year-end from a single stub, the YTD Earnings Calculator does that step.
Payslip44 builds the itemized stub: separate cash wages and tips earning lines, tax deduction lines, W-2 / 1099 / statutory / owner classifications, per-line year-to-date amounts, six layouts, and decimal-precise money math, all on-device with export to PDF, PNG, CSV, or text. Got your figures? Download Payslip44 and put them on a real stub.
A note on scope: everything here is an estimate, not tax advice. The federal income tax figure is simplified (no W-4 detail, no pre-tax deductions, flat annualization), and there is no state or local tax in it. Real withholding on your paycheck will differ. Use it to sanity-check your pay, then confirm specifics with your employer or a tax professional.
Frequently Asked Questions
Common questions about tipped employee paycheck calculator
What is the federal minimum wage for tipped employees?
The federal cash wage floor for tipped employees is $2.13 an hour. An employer can count up to $5.12 an hour of your tips as a tip credit toward the regular federal minimum wage of $7.25, so $2.13 in cash plus $5.12 in credited tips reaches $7.25. Many states set a higher tipped cash wage or no tip credit at all, so override the minimum wage field with your state or local rate.
How does a tip credit work?
A tip credit lets an employer pay a lower cash wage and count part of your tips toward the minimum wage they owe. The credit per hour is the gap between the applicable minimum wage and your cash wage, but only up to the tips you actually earned: it is capped at your tips divided by hours. If your tips are thin, the credit shrinks, and the employer has to make up the rest in cash.
What happens if my tips don't bring me up to minimum wage?
Your employer owes the difference. Under the FLSA, cash wage plus tips has to reach the applicable minimum wage for every pay period, and the shortfall cannot be averaged across weeks. If your cash wages plus reported tips fall below minimum wage times hours worked, the calculator shows the exact make-up amount your employer must add. Turning that into an itemized paystub is what the Hourly to Paystub Earnings Calculator and Payslip44 are for.
Are tips taxed? Do I pay Social Security and Medicare on tips?
Yes. Reported tips are wages for tax purposes, so they carry the full 6.2% Social Security and 1.45% Medicare (7.65% FICA together) just like your cash wages, and they count toward federal income tax. This calculator applies FICA to your full gross, cash wages plus all reported tips, not just the cash portion.
What is the "No Tax on Tips" deduction and does it mean tips are tax-free?
No, tips are not tax-free. For tax years 2025 through 2028, the One Big Beautiful Bill Act lets eligible tipped workers deduct up to $25,000 of qualified tips from federal taxable income, which lowers federal income tax only. FICA still applies to every dollar of tips, and most states still tax them. The optional toggle here applies that deduction to the income-tax estimate alone and leaves FICA on full gross. You also need an SSN, and eligibility depends on your occupation, so treat it as a rough illustration.
Does the No Tax on Tips deduction phase out at higher income?
Yes. The deduction shrinks by $100 for every full $1,000 of modified adjusted gross income above $150,000 (single or head of household) or $300,000 (married filing jointly). Partial thousands do not count, so $151,900 of MAGI is one full thousand over and costs you $100, not $190. At $25,000 of qualified tips the deduction hits $0 once MAGI reaches $400,000 single or $550,000 joint. Married taxpayers filing separately cannot claim it at all, at any income. The calculator annualizes the pay period you entered to estimate MAGI and applies all three rules.
Do I have to report cash tips?
Yes. If you receive $20 or more in tips in a calendar month, you must report the total to your employer, usually by the 10th of the following month, so they can withhold taxes and record the wages. Credit-card tips are already on record. Unreported cash tips are still taxable income and can create a balance due at filing.
Why is my paycheck so small if I made good tips?
Because the taxes on your tips are withheld from your cash wages, not from the tips you already pocketed. When you earn a lot in tips, the FICA and income tax owed on that total can approach or exceed your cash wages, so the paycheck itself can land near zero even though your overall earnings are healthy. The calculator flags this when taxes exceed your cash wages.
Does this calculator include state and local taxes?
No. This is a federal estimate covering FICA and a simplified federal income tax figure. It does not model state or local income tax, and the federal income tax line skips W-4 specifics and pre-tax deductions. Override the minimum wage field with your state or local rate to get the tip-credit and make-up math right for where you work.