Short answer: In North Carolina, employers can pay tipped workers a cash wage of $2.13 an hour, as long as tips bring them up to the $7.25 minimum wage. The most an employer can count from tips, the tip credit, is $5.12 an hour.
North Carolina tipped wage at a glance
| North Carolina | |
|---|---|
| Minimum wage | $7.25 an hour |
| Cash wage for tipped workers | $2.13 an hour |
| Maximum tip credit | $5.12 an hour |
| Who counts as a tipped employee | Someone who regularly gets more than $20 a month in tips |
| In force since | 24 July 2009 |
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 $2.13 = $63.90 in cash wages. To reach the minimum wage of 30 x $7.25 = $217.50, the server's tips must add up to at least $153.60. If they make less in tips that week, the employer must pay the difference.
Tip pools and who keeps the tips
North Carolina allows tip pooling as long as tipped employees keep at least 85 percent of the tips they receive. The state rule applies to businesses covered by the state minimum wage law, generally those with under $500,000 in gross sales. Bigger businesses follow the federal rule, which keeps managers and supervisors out of a pool.
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
Your employer must let you keep all your tips, apart from a valid tip pool, if they take a tip credit. The state does not set a separate deadline for paying out card tips that I could confirm.
Can card fees come out of tips?
The North Carolina Department of Labor page does not say anything about card fees, so the federal position applies: an employer may subtract only the card company's actual percentage fee from a card tip.
Income tax on tips in North Carolina
Yes, North Carolina taxes tips as income. The state did not adopt the federal 'no tax on tips' deduction, and the Department of Revenue says you cannot deduct it on your 2025 North Carolina return because the General Assembly did not enact a similar state deduction. Bills for a state tips deduction have been filed for 2026 (for example Senate Bill 983) but I could not confirm that any has become law.
Other rules
- The tip credit is not allowed unless your employer gets a signed record of the tips you received, as the U.S. Department of Labor notes for North Carolina.
- Overtime is due after 40 hours a week.
The agency in charge is the North Carolina Department of Labor, Wage and Hour Bureau.
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)
- Minimum Wage in N.C.
- Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act
- FAQs Regarding Recent Session Law Changes
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 North Carolina in 2026?
In North Carolina, employers can pay tipped workers a cash wage of $2.13 an hour, as long as tips bring them up to the $7.25 minimum wage. The most an employer can count from tips, the tip credit, is $5.12 an hour.
Does North Carolina allow a tip credit?
Yes. Employers can count up to $5.12 an hour of tips toward the $7.25 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.
Can my employer take card fees out of my tips in North Carolina?
The North Carolina Department of Labor page does not say anything about card fees, so the federal position applies: an employer may subtract only the card company's actual percentage fee from a card tip.
Does North Carolina tax tips?
Yes, North Carolina taxes tips as income. The state did not adopt the federal 'no tax on tips' deduction, and the Department of Revenue says you cannot deduct it on your 2025 North Carolina return because the General Assembly did not enact a similar state deduction. Bills for a state tips deduction have been filed for 2026 (for example Senate Bill 983) but I could not confirm that any has become law.
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