Short answer: In Texas, 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.
Texas tipped wage at a glance
| Texas | |
|---|---|
| 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.
Local rates and exceptions
State law adopts the federal rate and covers only work not covered by the FLSA.
Tip pools and who keeps the tips
If your employer takes a tip credit, a tip pool can only include employees who customarily and regularly receive tips, and owners, managers and supervisors cannot take any of the pool. If your employer pays the full $7.25, cooks and dishwashers can be included, but managers still cannot.
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
Federal rules apply: your employer cannot keep your tips, and if it collects and redistributes them, they must be paid out by the regular payday for that pay period.
Can card fees come out of tips?
Texas payday rules require your employer to have your written authorization before deducting credit card service charges from your tips. Any deduction cannot take your pay below the minimum wage.
Service charges
Under federal rules a mandatory service charge is not a tip, even if your employer passes it to staff. If your employer shares it with you, it can count towards the minimum wage.
Income tax on tips in Texas
Texas has no state personal income tax, so there is no state tax on your tips. Tips are still taxable income for federal purposes, and the federal 2025 tips deduction applies on your federal return.
The agency in charge is the Texas Workforce Commission.
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)
- 29 CFR 531.54 Tip sharing and tip pooling
- 29 CFR 531.59 The tip credit
- 29 CFR 531.55 Service charges
- 29 CFR 531.52 General restrictions on an employer's use of its employees' tips
- Texas Labor Code Chapter 62 (index page)
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 Texas in 2026?
In Texas, 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 Texas 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 Texas?
Texas payday rules require your employer to have your written authorization before deducting credit card service charges from your tips. Any deduction cannot take your pay below the minimum wage.
Does Texas tax tips?
Texas has no state personal income tax, so there is no state tax on your tips. Tips are still taxable income for federal purposes, and the federal 2025 tips deduction applies on your federal return.
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