The US federal minimum wage for tipped workers is $2.13 per hour. It has been $2.13 since 1991. Over the same 35 years the full federal minimum rose from $4.25 to $7.25, and most states pushed their own floors far higher. The tipped floor did not follow.
The $2.13 figure is not a rounding artifact. It is the bottom of a system called the tip credit, which lets an employer count a worker’s tips toward the minimum wage the employer would otherwise owe in cash. Where the credit is largest, the employer pays $2.13 an hour and the customer is expected to pay the rest. Where it does not exist at all, the tipped worker earns the same minimum as everyone else.
This is how that system works in 2026, why the federal number froze, and how far apart the states have drifted.
01 / What a tip credit actually is
The full federal minimum is $7.25 per hour. The federal tipped cash wage is $2.13. The difference, $5.12, is the maximum federal tip credit. An employer may pay a tipped worker as little as $2.13 in direct cash wages and claim up to $5.12 per hour of that worker’s tips as credit toward the $7.25 obligation.
There is a backstop in the rule. If cash wages plus tips do not reach the full minimum in a given week, the employer must make up the difference. In practice the backstop is weak. It depends on accurate tip reporting, employer compliance, and a worker willing to challenge a shortfall. The headline number a tipped worker can count on is the cash wage, and at the federal level that number is $2.13.
The tip credit is a choice each jurisdiction makes. A state can match the federal credit, set a smaller one, or refuse to allow any credit at all. That single decision produces the entire spread described below.
The cash wage is the only figure a tipped worker can count on. Everything above it depends on the customer.
02 / Why $2.13 stopped moving
Before 1991 the tipped cash wage was tied to the full minimum as a percentage. When the full minimum rose, the tipped wage rose with it. A 1996 amendment to the Fair Labor Standards Act broke that link. It fixed the federal tipped cash wage at $2.13 in dollar terms and removed the percentage rule that had kept it indexed.
The effect was a permanent freeze. The full federal minimum has been raised since 1991, most recently to $7.25 in 2009, the same rate covered in our federal minimum wage history. The tipped cash wage has not changed at all. As a share of the full minimum, $2.13 has fallen from half the floor to under a third of it.
Fifteen states still apply the federal $2.13 cash wage with the full $5.12 credit. In those states a tipped worker’s guaranteed hourly cash wage in 2026 is identical to a tipped worker’s wage in 1991.
Data table: federal tipped cash wage versus full federal minimum, 1991–2026 (USD/hr)
| Effective | Full federal minimum | Tipped cash wage | Maximum tip credit |
|---|---|---|---|
| 1991 | $4.25 | $2.13 | $2.12 |
| 1996 | $4.75 | $2.13 | $2.62 |
| 1997 | $5.15 | $2.13 | $3.02 |
| 2007 | $5.85 | $2.13 | $3.72 |
| 2008 | $6.55 | $2.13 | $4.42 |
| 2009–2026 | $7.25 | $2.13 | $5.12 |
03 / The seven states with no tip credit
Seven states do not allow a tip credit at all. In Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington, a tipped worker must receive the full state minimum wage in cash, before any tips. Tips are extra income on top of the wage, not a substitute for part of it.
The cash wages in these states are the full state minimums. California pays tipped workers $16.90 per hour. Washington pays $17.13. Nevada pays $12.00, Minnesota pays $11.41, and Montana pays $10.85. Every one of these figures is the same minimum a non-tipped worker earns in the same state.
The contrast with the federal floor is direct. A server in California is owed $16.90 per hour in cash. A server in a $2.13 state is owed $2.13. The gap is $14.77 per hour in guaranteed wages for the same job, set entirely by which state the table is in.
04 / The deep-differential states
Between full parity and the federal floor sits a wide middle. These are the states that allow a tip credit but set their own cash wage somewhere above $2.13. The cash figures range from a few cents above the federal floor to most of the full minimum.
At the bottom of the range, several states simply adopt the federal numbers. North Carolina and Virginia both set the tipped cash wage at $2.13 with the full $5.12 credit, even though Virginia’s full minimum is $12.77 and North Carolina’s is $7.25. Delaware sets $2.23 against a full minimum of $15.00, which means an employer there can claim a tip credit of $12.77 per hour.
Connecticut shows what a frozen state cash wage looks like in dollars. The tipped cash wage for hotel and restaurant wait staff is $6.38 per hour, and $8.23 for bartenders. Those dollar amounts have not changed in years, but Connecticut’s full minimum rose to $16.94 in 2026. Because the cash wage is fixed in dollars while the full minimum keeps climbing, the tip credit an employer can claim grows automatically each year, to $10.56 per hour for wait staff in 2026.
Florida runs the opposite mechanism. Its tip credit is fixed at $3.02 per hour, so the tipped cash wage tracks the full minimum down by that fixed amount. With Florida’s full minimum at $14.00 since September 30, 2025, the tipped cash wage is $10.98. When the full minimum reaches $15.00 on September 30, 2026, the tipped cash wage rises to $11.98. The credit stays $3.02 either way.
Data table: 2026 tipped cash wage by state (USD/hr)
| State | Tipped cash wage (USD/hr) | Category |
|---|---|---|
| Washington | $17.13 | Full parity (no tip credit) |
| California | $16.90 | Full parity (no tip credit) |
| Oregon | $15.05 | Full parity (no tip credit) |
| Alaska | $13.00 | Full parity (no tip credit) |
| Nevada | $12.00 | Full parity (no tip credit) |
| Minnesota | $11.41 | Full parity (no tip credit) |
| Montana | $10.85 | Full parity (no tip credit) |
| Florida | $10.98 | Differential |
| Maine | $7.55 | Differential |
| Connecticut (wait staff) | $6.38 | Differential |
| New Jersey | $6.05 | Differential |
| Rhode Island | $3.89 | Differential |
| Delaware | $2.23 | Differential |
| North Carolina | $2.13 | Federal floor |
| Virginia | $2.13 | Federal floor |
| 13 other states | $2.13 | Federal floor |
05 / The District of Columbia changed course
The District of Columbia was the clearest case of a jurisdiction closing the gap. Voters passed Initiative 82 in 2022 to phase out the tip credit entirely and bring the tipped cash wage up to the full minimum by 2027. The cash wage climbed in steps for two years under that schedule.
In 2025 the District reversed direction. The D.C. Council amended Initiative 82 through the Fiscal Year 2026 Budget Support Act, enacted as D.C. Law 26-55. The tipped cash wage is now frozen at $10.00 per hour through June 30, 2026, which is about 56 percent of the full minimum. On July 1, 2026 it is set at 56 percent of the full minimum. It then rises to 60 percent in 2028 and in steps of five points every two years, capping at 75 percent of the full minimum by 2034 rather than reaching full parity in 2027. The phase-out became a phase-up to a ceiling below the full wage.
The reversal matters for the larger pattern. The one jurisdiction that had voted to eliminate its tip credit pulled back before completing it. No state has finished closing the gap by legislation since the seven no-credit states did so years ago.
Data table: DC tipped cash wage as a percent of full minimum, voted versus amended path
| Effective | Voted (Initiative 82) | Amended (FY2026 Budget Support Act) |
|---|---|---|
| May 2023 | ~37% ($6.00) | — |
| Jul 2023 | ~47% ($8.00) | — |
| Jul 2024 | ~57% ($10.00) | — |
| Jul 2025 | ~70% ($12.00) | $10.00 (frozen) |
| Jul 1, 2026 | ~80% ($14.00) | 56% of full minimum |
| Jul 1, 2027 | 100% (full parity) | 56% |
| Jul 1, 2028 | 100% | 60% |
| Jul 1, 2030 | 100% | 65% |
| Jul 1, 2032 | 100% | 70% |
| Jul 1, 2034 | 100% | 75% (cap) |
06 / What the tipped map shows
The tipped minimum wage is the federal minimum wage story in sharper form. The full federal floor froze in 2009 and now describes fewer workers each year as states index past it, a pattern laid out in the 2026 state minimum wage spread. The tipped floor froze in 1991 and never indexed at all.
The result is a guaranteed cash wage that ranges from $2.13 to $17.13 for the same work, a gap of more than eight to one. In seven states a tipped worker is owed the full minimum and tips are extra. In fifteen states a tipped worker is owed $2.13 and the customer is expected to cover the rest. The state line decides which system applies, and for the federal-floor states that line has held the cash wage at $2.13 for 35 years.