Short answer: In New Jersey, employers can pay tipped workers a cash wage of $6.05 an hour, as long as tips bring them up to the $15.92 minimum wage. The most an employer can count from tips, the tip credit, is $9.87 an hour.
New Jersey tipped wage at a glance
| New Jersey | |
|---|---|
| Minimum wage | $15.92 an hour |
| Cash wage for tipped workers | $6.05 an hour |
| Maximum tip credit | $9.87 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 $6.05 = $181.50 in cash wages. To reach the minimum wage of 30 x $15.92 = $477.60, the server's tips must add up to at least $296.10. If they make less in tips that week, the employer must pay the difference.
Upcoming changes
1 Jan 2027: $16.48, tipped cash wage $6.61 (tip credit stays $9.87); small and seasonal employers $16.25.
Local rates and exceptions
Employers with fewer than 6 employees and seasonal employers: $15.23 in 2026.
Tip pools and who keeps the tips
A tip pool must be among tipped employees. New Jersey says an employer must tell you of any required contribution, may not keep the tips and may not give them to non-tipped employees.
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
New Jersey guidance says tips are the sole property of the employee. The customer decides whether, to whom and how much to tip.
Can card fees come out of tips?
New Jersey says employers may not use your tips to pay any part of credit or debit card processing fees.
Service charges
A compulsory service charge, such as 15% of the bill, is not a tip under New Jersey guidance, even if the employer hands it out to staff.
Income tax on tips in New Jersey
New Jersey taxes tips as income and does not follow the federal 'no tax on tips' deduction. The Division of Taxation says the federal tips deduction does not affect your New Jersey return because the NJ Gross Income Tax does not start from federal adjusted gross income (page updated 1 December 2025). Several 2026 bills to exempt tips have been introduced but none is confirmed as law.
Other rules
- Deductions for breakage or cash register shortages from your cash wage are not permitted.
- The 2026 and 2027 tipped figures are simply the full minimum minus the $9.87 tip credit.
The agency in charge is the New Jersey Department of Labor and Workforce Development, Wage and Hour.
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)
- NJ DOL press release 29 Sep 2026, 2027 minimum wage
- New Jersey's minimum wage rises to $15.92 on January 1 (press release)
- My Work Rights: Tipped workers
- Wage & Hour Compliance employer FAQs
- One Big Beautiful Bill Act and the New Jersey Gross Income Tax
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 New Jersey in 2026?
In New Jersey, employers can pay tipped workers a cash wage of $6.05 an hour, as long as tips bring them up to the $15.92 minimum wage. The most an employer can count from tips, the tip credit, is $9.87 an hour.
Does New Jersey allow a tip credit?
Yes. Employers can count up to $9.87 an hour of tips toward the $15.92 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 New Jersey minimum wage going up?
1 Jan 2027: $16.48, tipped cash wage $6.61 (tip credit stays $9.87); small and seasonal employers $16.25.
Can my employer take card fees out of my tips in New Jersey?
New Jersey says employers may not use your tips to pay any part of credit or debit card processing fees.
Does New Jersey tax tips?
New Jersey taxes tips as income and does not follow the federal 'no tax on tips' deduction. The Division of Taxation says the federal tips deduction does not affect your New Jersey return because the NJ Gross Income Tax does not start from federal adjusted gross income (page updated 1 December 2025). Several 2026 bills to exempt tips have been introduced but none is confirmed as law.
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