Short answer: In Pennsylvania, employers can pay tipped workers a cash wage of $2.83 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 $4.42 an hour.
Pennsylvania tipped wage at a glance
| Pennsylvania | |
|---|---|
| Minimum wage | $7.25 an hour |
| Cash wage for tipped workers | $2.83 an hour |
| Maximum tip credit | $4.42 an hour |
| Who counts as a tipped employee | Someone who regularly gets more than $135 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 $2.83 = $84.90 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 $132.60. If they make less in tips that week, the employer must pay the difference.
Local rates and exceptions
A $15 bill passed the House in 2026 but has not been enacted.
Tip pools and who keeps the tips
If anyone in the pool is paid a tip-credit wage, the pool can only include jobs that customarily and regularly receive tips. If everyone in the pool earns at least $7.25 an hour in wages, non-tipped staff can be included. Employers, managers and supervisors cannot take from the pool, though they can contribute their own 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
All tips and gratuities paid by credit card or other non-cash method are the property of the employee. A manager can only keep a tip if they served the customer entirely on their own.
Can card fees come out of tips?
Pennsylvania bans it. The Department of Labor and Industry says no credit card or other non-cash transaction fees can be deducted from the tips of any worker, even one paid $7.25 or more an hour.
Service charges
Businesses that offer banquets, special functions or package deals must give customers contracts or bills with separate lines for an automatic service fee and for any tip, and must state that service fees are not gratuities. This does not apply to a restaurant that has a service fee but offers none of those.
Income tax on tips in Pennsylvania
Pennsylvania taxes tips. The Department of Revenue's personal income tax guide lists tips as taxable compensation and does not mention the federal 2025 tips deduction or any Pennsylvania tips exemption.
Other rules
- Overtime is 1.5 times your regular rate after 40 hours in a workweek, and tipped employees are included.
- Employers must keep records of the hours you work in each type of job, including non-tipped duties.
The agency in charge is the Pennsylvania 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)
- Overtime and Tipped Worker Rules in PA
- Pennsylvania's Minimum Wage Act
- Gross Compensation, PA Personal Income Tax Guide
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 Pennsylvania in 2026?
In Pennsylvania, employers can pay tipped workers a cash wage of $2.83 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 $4.42 an hour.
Does Pennsylvania allow a tip credit?
Yes. Employers can count up to $4.42 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 Pennsylvania?
Pennsylvania bans it. The Department of Labor and Industry says no credit card or other non-cash transaction fees can be deducted from the tips of any worker, even one paid $7.25 or more an hour.
Does Pennsylvania tax tips?
Pennsylvania taxes tips. The Department of Revenue's personal income tax guide lists tips as taxable compensation and does not mention the federal 2025 tips deduction or any Pennsylvania tips exemption.
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