Short answer: In New York, employers can pay tipped workers a cash wage of $11.35 an hour, as long as tips bring them up to the $17.00 minimum wage. The most an employer can count from tips, the tip credit, is $5.65 an hour.
New York tipped wage at a glance
| New York | |
|---|---|
| Minimum wage | $17.00 an hour |
| Cash wage for tipped workers | $11.35 an hour |
| Maximum tip credit | $5.65 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 $11.35 = $340.50 in cash wages. To reach the minimum wage of 30 x $17.00 = $510.00, the server's tips must add up to at least $169.50. If they make less in tips that week, the employer must pay the difference.
Upcoming changes
No change on 1 Jan 2027 (economic off-ramp triggered). Governor proposed $17.60 / $16.55 from 1 Mar 2027 if the Legislature approves.
Local rates and exceptions
Figures are for food service workers in NYC, Long Island and Westchester. Rest of state: $16.00 minimum, $10.70 cash, $5.30 tip credit. Other tipped service workers have different rules.
Tip pools and who keeps the tips
Tip sharing and tip pooling are both allowed under the hospitality wage order. Directly tipped staff can share with other staff who serve customers, and a pooled tip can go to directly and indirectly tipped staff. Employers, managers and their agents cannot take any part of your tips.
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
Labor Law section 196-d bars your employer from taking any part of your tips or of a charge presented as a tip. Card tips must be paid no later than the next regular payday, with tips and wages shown separately on your wage statement.
Can card fees come out of tips?
Yes, a pro-rated share only. The state labour department says your employer may subtract the pro-rated share of the fee charged by the card company from your card tips.
Service charges
A charge on top of food and drink is presumed to be a tip and must go to the staff who served the customer, unless the customer was clearly told in writing that it is not a gratuity (for example a banquet administration charge). The employer has to prove the notice was clear.
Income tax on tips in New York
Yes, New York has adopted a tips exclusion. For tax years beginning on or after 1 January 2026, up to $25,000 of qualified tips that qualify for the federal deduction can be excluded from New York adjusted gross income. It was part of the 2026 to 2027 budget bill S.9009C, signed on 28 May 2026 (Chapter 59).
Other rules
- Overtime for tipped workers is time and a half of the minimum wage minus the tip credit.
- You cannot waive your tip rights in an agreement with your employer.
The agency in charge is the New York State Department of Labor.
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)
- NY DOL, Minimum Wage for Tipped Workers
- NY Governor, New York State Minimum Wage for 2027
- Minimum wage (rates for 1 January 2027)
- Tips and Gratuities Frequently Asked Questions
- Labor Law section 196-d
- Senate Bill S9009C Part B (signed chapter 59, 28 May 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 York in 2026?
In New York, employers can pay tipped workers a cash wage of $11.35 an hour, as long as tips bring them up to the $17.00 minimum wage. The most an employer can count from tips, the tip credit, is $5.65 an hour.
Does New York allow a tip credit?
Yes. Employers can count up to $5.65 an hour of tips toward the $17.00 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.
Is the New York minimum wage going up?
No change on 1 Jan 2027 (economic off-ramp triggered). Governor proposed $17.60 / $16.55 from 1 Mar 2027 if the Legislature approves.
Can my employer take card fees out of my tips in New York?
Yes, a pro-rated share only. The state labour department says your employer may subtract the pro-rated share of the fee charged by the card company from your card tips.
Does New York tax tips?
Yes, New York has adopted a tips exclusion. For tax years beginning on or after 1 January 2026, up to $25,000 of qualified tips that qualify for the federal deduction can be excluded from New York adjusted gross income. It was part of the 2026 to 2027 budget bill S.9009C, signed on 28 May 2026 (Chapter 59).
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