$2.13 an hour. That is the federal tipped minimum wage in 2026 — the same number it has been since 1991. It shocks everyone who hears it for the first time, and it raises the obvious question: how does anyone survive serving tables for $2.13 an hour?
The answer is that almost no server actually earns $2.13 an hour. The tipped wage is just the cash floor — tips stack on top, employers must make up any shortfall, and in seven states the whole tip-credit system does not even exist. The Bureau of Labor Statistics puts the real median pay for waiters and waitresses at $16.94 an hour including tips (May 2025). This guide explains how tipped wages really work in 2026, what servers actually take home state by state, and what that looks like after taxes.
Under the Fair Labor Standards Act, employers of tipped workers can claim a tip credit: instead of paying the full $7.25 federal minimum wage in cash, they pay a cash wage of $2.13 an hour and count up to $5.12 an hour in tips toward the $7.25 obligation (DOL's official 2026 tipped-wage table).
Three rules protect the worker:
The federal tipped cash wage has been frozen at $2.13 since 1991 — 35 years without a penny of increase. But it is a floor for the employer's cash contribution, not a cap on earnings. In practice, tips are the real paycheck: the $2.13 is often entirely consumed by tax withholding, with the worker's spendable income coming from tips.
And critically, $2.13 only applies in states that allow the full federal tip credit. Many states set a higher tipped cash wage, and seven ban the tip credit entirely.
Forget the $2.13 headline — here is what waiters and waitresses actually make, per the Bureau of Labor Statistics (May 2025, tips included):
| Measure | Hourly pay | Yearly (full-time) |
|---|---|---|
| Bottom 10% | Under $8.70 | Under $18,096 |
| Median (50%) | $16.94 | $35,235 |
| Top 10% | Over $31.12 | Over $64,730 |
Source: BLS Occupational Outlook Handbook — Waiters and Waitresses.
The spread is enormous: the best-paid tenth of servers earn nearly four times the bottom tenth. Venue, city, and shift matter more than the tipped wage law. The trend is strongly upward, too — average waiter pay grew 39.6% from 2020 to 2024 ($27,470 to $38,360), the fastest wage growth in hospitality (OysterLink/BLS analysis). With about 423,100 waiter and waitress openings projected per year from 2025 to 2035 (BLS), demand is not the problem.
Seven states prohibit the tip credit entirely — employers must pay tipped workers the full state minimum wage in cash, and every tip dollar goes on top (TimeClick's 2026 state table):
| State | 2026 tipped cash wage | Tip credit? |
|---|---|---|
| Washington | $17.13 | None — full wage + tips |
| California | $16.90 | None — full wage + tips |
| Oregon | $15.05 (standard) | None — full wage + tips |
| Alaska | $13.00* | None — full wage + tips |
| Nevada | $12.00 | None — full wage + tips |
| Minnesota | $11.41 | None — full wage + tips |
| Montana | $10.85 | None — full wage + tips |
A server working 40 hours a week in Washington is guaranteed at least $685 from the employer before a single tip — versus $85 a week in cash wages under the federal $2.13 floor. That is why base-pay disputes are rare in these states; the fights there tend to be about tip pooling and misclassification instead.
*State cash-wage figures are from the official DOL tipped-wage table dated January 1, 2026. Alaska's rate rose again mid-year to $14.00 effective July 1, 2026.
Watch two more jurisdictions in motion: Washington, D.C. raised its tipped cash wage to $10.30 on July 1, 2026 and is phasing out its tip credit entirely by July 1, 2027 (D.C. Department of Employment Services). And Florida's tipped wage rose in step on September 30, 2026, when the standard minimum hit $15 — the DOL table lists the pre-increase $3.02 tip credit, which puts the post-increase tipped wage at $11.98.
Take the BLS median of $16.94 an hour — $35,235 a year full-time — and run it through 2026 federal tax math for a single filer:
| Line | Amount |
|---|---|
| Gross pay ($16.94 × 2,080 hrs, incl. tips) | $35,235.20 |
| Less 2026 standard deduction | −$16,100.00 |
| Taxable income | $19,135.20 |
| Federal income tax (10%/12% brackets) | −$2,048.22 |
| FICA (7.65%) | −$2,695.49 |
| Estimated take-home | $30,491.49 |
That is about $2,541 a month — before state income tax, and before the practical reality that tips are taxable income. The IRS requires reporting tip income, and employers withhold on reported tips; unreported tips are still legally taxable. Servers who under-report tips trade a smaller withholding today for risk at filing time.
$2.13 an hour in cash wages, unchanged since 1991. Employers may claim up to a $5.12 tip credit, but cash + tips must total at least $7.25 an hour — otherwise the employer makes up the difference.
Seven: Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington. Employers there must pay the full state minimum wage before tips. D.C. is phasing its credit out by July 2027.
The BLS median is $16.94 an hour including tips (May 2025) — but the range is huge, from under $8.70 (bottom 10%) to over $31.12 (top 10%). Your venue and city matter more than the tipped wage law.
Yes. Tips are taxable income — subject to federal income tax and FICA just like wages. Employers withhold based on the tips you report; you reconcile the rest when you file.
Only as a cash wage, only in states that allow the federal tip credit, and only if your tips bring you to at least the applicable minimum wage for every hour worked. In the seven no-tip-credit states, $2.13 is flatly illegal.
$11.98 an hour as of September 30, 2026 (with a $3.02 tip credit against the $15 standard minimum wage).
Figures are 2026 estimates for illustration — not tax advice. Tipped pay varies enormously by venue, shift, and state law; consult your state labor department or a tax professional for your situation. Estimate your take-home with our free calculator.
Related reading: Hourly-to-salary chart 2026 · California paycheck calculator · Texas paycheck calculator