Short answer: In Arizona, employers can pay tipped workers a cash wage of $12.15 an hour, as long as tips bring them up to the $15.15 minimum wage. The most an employer can count from tips, the tip credit, is $3.00 an hour.
Arizona tipped wage at a glance
| Arizona | |
|---|---|
| Minimum wage | $15.15 an hour |
| Cash wage for tipped workers | $12.15 an hour |
| Maximum tip credit | $3.00 an hour |
| Who counts as a tipped employee | Federal rule: someone who regularly gets more than $30 a month in tips |
| In force since | 1 January 2026 |
The federal tipped minimum is $2.13 an hour with a $5.12 tip credit toward the $7.25 federal minimum wage. Where a state sets a higher figure, the higher one applies.
An example week
A server works 30 hours. The employer pays at least 30 x $12.15 = $364.50 in cash wages. To reach the minimum wage of 30 x $15.15 = $454.50, the server's tips must add up to at least $90.00. If they make less in tips that week, the employer must pay the difference.
Upcoming changes
1 Jan 2027: $15.65, tipped cash wage $12.65 (Industrial Commission of Arizona 2027 poster).
Local rates and exceptions
Flagstaff $18.35 in 2026 with no tip credit (tips cannot count toward the minimum). Tucson $15.45 in 2026 with a $3.00 tip credit.
Tip pools and who keeps the tips
Arizona has no separate tip pool rule that I could confirm, so federal rules apply. If your employer takes a tip credit, a pool can include only staff who customarily and regularly receive tips, and owners, managers and supervisors cannot take any of it. If your employer pays the full minimum wage, back-of-house staff can be included.
Federal FLSA: employers, managers and supervisors may not keep any part of employees' tips. A mandatory tip pool may include only customarily tipped staff when a tip credit is taken; if the full minimum wage is paid, back-of-house staff may share the pool.
To share a pool fairly by hours or points, use the tip split calculator. To work out what a server owes support staff, use the tip-out calculator.
Who owns the tips
Federal rules apply: your employer cannot keep your tips, and if it collects and redistributes them it must pay them out by the regular payday for that pay period. Arizona law lets you recover unpaid wages plus twice the amount underpaid.
Service charges
Under federal rules a mandatory service charge is not a tip, even if your employer passes it to staff. I could not confirm a separate Arizona rule.
Income tax on tips in Arizona
Arizona taxes tips as income. I could not confirm whether Arizona has adopted a state deduction like the federal 2025 tips deduction, so check the Arizona Department of Revenue.
Other rules
- Your employer cannot retaliate against you for asserting minimum wage rights, and action within 90 days of a complaint is presumed to be retaliation.
The agency in charge is the Industrial Commission of Arizona, Labor Department.
Tips and federal income tax
From 2025 to 2028, up to $25,000 of qualified tips a year can be deducted from federal taxable income. See the no tax on tips calculator for who qualifies and what it saves.
Taking tips by card
Customers carry less cash. A personal QR code lets them tip you by card, Apple Pay or Google Pay from their own phone, with no app to install. See QR code tip jars by job.
Sources
- US DOL WHD, Minimum Wages for Tipped Employees (revised 1 Jul 2026)
- US DOL WHD, State Minimum Wage Laws (updated 1 Jul 2026)
- A.R.S. 23-363 Minimum wage
- A.R.S. 23-364 Enforcement
- 29 CFR 531.54 Tip sharing and tip pooling
- 29 CFR 531.55 Service charges
- 29 CFR 531.52 General restrictions on an employer's use of its employees' tips
Checked in October 2026 against the sources above. Wage rates change, often on 1 January and 1 July; check the state labor department before relying on a figure. This is general information, not legal advice.
Common questions
What is the tipped minimum wage in Arizona in 2026?
In Arizona, employers can pay tipped workers a cash wage of $12.15 an hour, as long as tips bring them up to the $15.15 minimum wage. The most an employer can count from tips, the tip credit, is $3.00 an hour.
Does Arizona allow a tip credit?
Yes. Employers can count up to $3.00 an hour of tips toward the $15.15 minimum wage.
What happens if my tips do not make up the minimum wage?
When an employer pays a tipped cash wage, it must make up any shortfall so that your cash wage plus tips is at least the full minimum wage for the hours you worked.
Can my employer or manager keep part of my tips?
No. Under federal law, employers, managers and supervisors may not keep any part of employees’ tips, including through a tip pool.
Is the Arizona minimum wage going up?
1 Jan 2027: $15.65, tipped cash wage $12.65 (Industrial Commission of Arizona 2027 poster).
Does Arizona tax tips?
Arizona taxes tips as income. I could not confirm whether Arizona has adopted a state deduction like the federal 2025 tips deduction, so check the Arizona Department of Revenue.
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