Short answer: In New Mexico, employers can pay tipped workers a cash wage of $3.00 an hour, as long as tips bring them up to the $12.00 minimum wage. The most an employer can count from tips, the tip credit, is $9.00 an hour.
New Mexico tipped wage at a glance
| New Mexico | |
|---|---|
| Minimum wage | $12.00 an hour |
| Cash wage for tipped workers | $3.00 an hour |
| Maximum tip credit | $9.00 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 2023 |
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 $3.00 = $90.00 in cash wages. To reach the minimum wage of 30 x $12.00 = $360.00, the server's tips must add up to at least $270.00. If they make less in tips that week, the employer must pay the difference.
Local rates and exceptions
Albuquerque, Santa Fe city and county, and Las Cruces set higher local rates.
Tip pools and who keeps the tips
This state has no extra rule on tip pools in our sources, so the federal rules below apply.
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.
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)
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 Mexico in 2026?
In New Mexico, employers can pay tipped workers a cash wage of $3.00 an hour, as long as tips bring them up to the $12.00 minimum wage. The most an employer can count from tips, the tip credit, is $9.00 an hour.
Does New Mexico allow a tip credit?
Yes. Employers can count up to $9.00 an hour of tips toward the $12.00 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.
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