Short answer: Minnesota does not allow a tip credit. Tipped workers must be paid the full state minimum wage of $11.41 an hour before tips, and they keep their tips on top.
Minnesota tipped wage at a glance
| Minnesota | |
|---|---|
| Minimum wage | $11.41 an hour |
| Cash wage for tipped workers | $11.41 an hour |
| Maximum tip credit | None: no tip credit allowed |
| 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.
Upcoming changes
1 Jan 2027: $11.87 (DLI, announced 19 Aug 2026).
Local rates and exceptions
No tip credit. Minneapolis $16.37 in 2026 ($17.02 in 2027) and St. Paul have higher local rates.
Tip pools and who keeps the tips
Employers cannot require you to share a tip with the employer or other employees or to contribute to a tip pool. Exceptions: when several direct service staff serve the same customer (such as a banquet), and dividing a tip jar among direct service staff on the same shift. Employers may hold and hand out shared tips only if employees ask them to.
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
Tips belong to the employee. Card and electronic tips must be paid to you in full no later than the next scheduled pay period (Minn. Stat. 177.24).
Can card fees come out of tips?
State guidance and the statute say you must receive the full amount of a tip paid by card or e-payment, by the next pay period. Neither mentions a card fee deduction, so a deduction would conflict with the full-amount rule.
Income tax on tips in Minnesota
Minnesota taxes tips as income and, as of the Department of Revenue's October 2025 analysis, has no subtraction for them because the federal tips deduction does not change the federal adjusted gross income that Minnesota starts from. A bill to add a state subtraction (HF 3525, 2026) was only at introduction on the legislature's site, so no exemption is confirmed.
Other rules
- Employers may count the youth training wage only for workers under 20 in their first 90 consecutive days.
- Minnesota law also bars requiring employees to share a gratuity with the employer in any form.
The agency in charge is the Minnesota Department of Labor and Industry.
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)
- Minnesota DLI, minimum wage adjusted for inflation 1 Jan 2027
- Minimum wage in Minnesota
- Tip credit, tip sharing, tip pooling
- Minnesota Statutes 177.24
- Federal Update: P.L. 119-21 Subtraction for Tip Income
- HF 3525, 94th Legislature
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 Minnesota in 2026?
Minnesota does not allow a tip credit. Tipped workers must be paid the full state minimum wage of $11.41 an hour before tips, and they keep their tips on top.
Does Minnesota allow a tip credit?
No. Tipped workers must be paid the full minimum wage before tips.
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 Minnesota minimum wage going up?
1 Jan 2027: $11.87 (DLI, announced 19 Aug 2026).
Can my employer take card fees out of my tips in Minnesota?
State guidance and the statute say you must receive the full amount of a tip paid by card or e-payment, by the next pay period. Neither mentions a card fee deduction, so a deduction would conflict with the full-amount rule.
Does Minnesota tax tips?
Minnesota taxes tips as income and, as of the Department of Revenue's October 2025 analysis, has no subtraction for them because the federal tips deduction does not change the federal adjusted gross income that Minnesota starts from. A bill to add a state subtraction (HF 3525, 2026) was only at introduction on the legislature's site, so no exemption is confirmed.
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