Iowa tip laws (2026)
Iowa tipped workers get at least $4.35 an hour in cash. The tip credit can't top 40% of the $7.25 minimum wage, so it maxes out at $2.90. Iowa's rule describes tip splits that employees agree on, and federal law keeps managers out.
Iowa at a glance
Tip credit allowedIowa: $7.25 an hour minimum wage. Tipped staff can be paid $4.35 cash, with up to $2.90 counted from tips.
| State minimum wage | $7.25/hr | Statewide from .[1] |
|---|---|---|
| Tipped cash wage | $4.35 | Plus up to $2.90 in tips = $7.25.[1] |
| Max tip credit | $2.90 | Counted from tips.[1] |
| Tip pooling | Allowed | Mandatory pools: it depends.[2] |
| Card-fee deduction | Pro rata only | Only the tip's share of the fee, under federal rules.[3] |
| Card tip payout | Federally covered card tips are due by regular payday. | Iowa paydays generally fall within 12 days of period end, excluding Sundays and holidays.[4] |
| Local minimum wages | None | State law blocks local rates.[5] |
Rates verified against the Iowa Department of Inspections, Appeals, and Licensing on . Rates as of . Tipped totals are worked out from the rates above. Download this data (CSV)
02The yes/no sheet
Can you do this in Iowa?
In Iowa you can take a tip credit of up to $2.90 an hour and can take out only the tip's share of a card fee. Each answer below carries its condition and an official source.
| Number | Can you… | Answer | The condition |
|---|---|---|---|
| 01 | Take a tip credit against minimum wage? | Yes | Pay at least $4.35 cash and count up to $2.90 in tips. Tips must cover the gap.[1] |
| 02 | Make staff join a tip pool? | Depends | Rule 233.6 describes splits employees agree on. How that fits with federal permission to require pools is not resolved.[2] |
| 03 | Include bartenders, bussers, runners and hosts? | Depends | Bartender, busser, food runner and host: shares follow a split the employees agree on (rule 233.6). Federal tip credit and job eligibility rules also apply.[3] |
| 04 | Include cooks and dishwashers? | Depends | Federal law allows back-of-house staff in some no-credit pools. Iowa rule 233.6 describes employee-agreed splits and doesn't list BOH roles.[2] |
| 05 | Give managers or supervisors a share? | No | Federal law bars managers and supervisors from other workers' tips. Tips for service they give directly and alone are separate.[3] |
| 06 | Let an owner keep any of the tips? | No | Federal law bars employers from keeping workers' tips, including through a pool.[3] |
| 07 | Pick your own split (hours, points or percentages)? | Depends | Iowa rule 233.6 recognizes splits on a basis the employees agree on among themselves.[2] |
| 08 | Take card processing fees out of tips? | Pro rata (federal) | Federal rule: only the actual proportional credit-card transaction fee may be deducted from charged tips; no deduction exceeding that fee or reducing required minimum wages; state law may forbid even that deduction.[3] |
| 09 | Hold card tips until payday? | Deadline | Federally covered card tips are due by regular payday. Iowa paydays generally fall within 12 days of period end, excluding Sundays and holidays.[4] |
| 10 | Cover walkouts, breakage or register shortages from tips? | No | Not from tips.[3] |
| 11 | Keep a mandatory service charge for the house? | Federal rule | Iowa separates a voluntary tip from a charge for service. Under federal law, service charges paid to staff are wages, not tips.[2] |
| 12 | Pay tips on a payroll card? | Depends | With the worker's consent. Offer another way to get paid too.[6] |
03State vs federal
Iowa vs federal law
Iowa sets a stricter rule than federal law on 2 of the 10 rules below. Where the two differ, the rule that is better for the worker applies.
| Rule | Federal (FLSA) | Iowa | Comparison |
|---|---|---|---|
| Minimum wageSame as federal | Federal$7.25[3] | Iowa$7.25[1] | Same as federal |
| Tipped cash wageStricter | Federal$2.13[3] | Iowa$4.35[1] | Stricter |
| Max tip creditStricter | Federal$5.12[3] | Iowa$2.90[1] | Stricter |
| Who counts as tippedState rule | FederalMore than $30 a month in tips, customarily and regularly received in the occupation.[3] | IowaMore than $30 a month in tips, for covered restaurant and hotel workers under Iowa Code 91D.1(1)(c).[7] | State rule |
| Managers in the poolFederal applies | FederalManagers/supervisors meeting the executive duties test cannot keep employees’ tips or receive from pools; they may keep only tips received directly for services they directly and solely provide. No salary-level test is used for this tip restriction.[3] | IowaFederal law bars managers and supervisors from other workers' tips. Tips for service they give directly and alone are separate.[3] | Federal applies |
| Kitchen in the poolState rule | FederalCooks and dishwashers may join a nontraditional mandatory pool only when all workers receive a direct cash wage of at least the full federal minimum wage and no tip credit is taken; employer/managers/supervisors remain excluded. State law may be stricter.[3] | IowaFederal law allows back-of-house staff in some no-credit pools. Iowa rule 233.6 describes employee-agreed splits and doesn't list BOH roles.[2] | State rule |
| Card fees from tipsFederal applies | FederalOnly the actual proportional credit-card transaction fee may be deducted from charged tips; no deduction exceeding that fee or reducing required minimum wages; state law may forbid even that deduction.[3] | IowaFederal rule applies.[2] | Federal applies |
| Card tip payoutState rule | FederalCharged tips due by regular payday, without waiting for processor reimbursement. Employer-administered pools fully distributed by regular payday for the workweek/pay period; if the amount/distribution cannot be determined before payroll, distribute as soon as practicable afterward.[3] | IowaFederally covered card tips are due by regular payday. Iowa paydays generally fall within 12 days of period end, excluding Sundays and holidays.[4] | State rule |
| Mandatory service chargesState rule | FederalA compulsory service charge is not an FLSA tip. Amounts distributed to employees are wages that may satisfy wage obligations and must enter the regular rate for overtime. This federal wage classification does not decide contractual or state-law ownership.[3] | IowaIowa separates a voluntary tip from a charge for service. Under federal law, service charges paid to staff are wages, not tips.[2] | State rule |
| Overtime for tipped staffState rule | FederalFor covered nonexempt employees, overtime generally begins after 40 hours in a workweek. Use the full regular rate, at least the full federal minimum wage, not $2.13; the hourly tip credit is not increased for overtime. Voluntary tips above the tip credit are excluded; distributed service charges enter the regular rate.[3] | IowaThe state agency sends overtime claims to the federal DOL. Federal tipped overtime starts from the full minimum wage.[3] | State rule |
Every state starts from the same federal floor. Federal tip law baseline: the FLSA rules, rates and sources, and how Iowa fits among the four tip credit classes.
04Wages
Minimum wage and the tip credit in Iowa
In Iowa employers can pay tipped staff $4.35 an hour and count up to $2.90 in tips toward the $7.25 minimum. If tips fall short, the employer makes up the difference.[1]
One server, one slow 30-hour week in Iowa
A busy week with $87.00 or more in tips needs no top-up. Every tip above that is the server's. Fictional worker and tips.
- Tip credit conditions
- Credit can't top 40% of the minimum wage. The worker must customarily get more than $30 a month in tips and keep them.[7]
- Who counts as tipped
- More than $30 a month in tips, for covered restaurant and hotel workers under Iowa Code 91D.1(1)(c).[7]
- Overtime
- The state agency sends overtime claims to the federal DOL. Federal tipped overtime starts from the full minimum wage.[3]
- Side work and dual jobs
- No tip credit for hours in a second job that doesn't qualify as tipped. Iowa rule 233.7 says so on its own.[2]
Other rates
| Rate | Hourly |
|---|---|
| Youth or training Initial employment wage, any ageFirst 90 calendar days with the same employer. Federally covered workers still get the federal minimum wage.[6] | $6.35 |
Scheduled increases
No statewide increase with a published amount is on file as of .
06Tip pool
Who can be in the tip pool in Iowa
Iowa allows tip pools. Owners, managers and supervisors can't share in them. A tip pool collects tips and splits them among staff; a tip-out is one worker handing part of their tips to others.
| Role | Can share? | Condition |
|---|---|---|
| Front of house | ||
| Server | Depends | Shares follow a split the employees agree on (rule 233.6). Federal tip credit and job eligibility rules also apply.[3] |
| Bartender | Depends | Shares follow a split the employees agree on (rule 233.6). Federal tip credit and job eligibility rules also apply.[3] |
| Busser | Depends | Shares follow a split the employees agree on (rule 233.6). Federal tip credit and job eligibility rules also apply.[3] |
| Food runner | Depends | Shares follow a split the employees agree on (rule 233.6). Federal tip credit and job eligibility rules also apply.[3] |
| Host | Depends | Shares follow a split the employees agree on (rule 233.6). Federal tip credit and job eligibility rules also apply.[3] |
| Barback | Depends | Shares follow a split the employees agree on (rule 233.6). Federal tip credit and job eligibility rules also apply.[3] |
| Expo | Depends | Shares follow a split the employees agree on (rule 233.6). Federal tip credit and job eligibility rules also apply.[3] |
| Back of house | ||
| Cook | Depends | Shares follow a split the employees agree on (rule 233.6). Federal tip credit and job eligibility rules also apply.[3] |
| Dishwasher | Depends | Shares follow a split the employees agree on (rule 233.6). Federal tip credit and job eligibility rules also apply.[3] |
| Leadership | ||
| Shift lead | Depends | Shares follow a split the employees agree on (rule 233.6). Federal tip credit and job eligibility rules also apply.[3] |
| Manager or supervisor | Not allowed | Federal law bars them from other workers' pooled tips.[3] |
| Owner | Not allowed | Federal law bars them from other workers' pooled tips.[3] |
- Managers and supervisors
- Federal law bars managers and supervisors from other workers' tips. Tips for service they give directly and alone are separate.[3]
- Owners
- Federal law bars employers from keeping workers' tips, including through a pool.[3]
- Back of house
- Federal law allows back-of-house staff in some no-credit pools. Iowa rule 233.6 describes employee-agreed splits and doesn't list BOH roles.[2]
- Who sets the percentages
- Iowa rule 233.6 recognizes splits on a basis the employees agree on among themselves.[2]
- Cap on what a pool can take
- No state rule. Federal rule applies: no federal percentage or amount cap for a valid mandatory pool; eligibility, notice and minimum wage rules still apply.[3][2]
- Pooling allowed
- Yes.[2]
07Put it to work
Setting up a tip pool in Iowa
Under Iowa rules, 6 of the 10 staff in this example can share a $1,200 pool. The table splits the same pool by percentage, by points and by hours.
| Who | By % | By points | By hours |
|---|---|---|---|
| Maya | $268.29 | $250.00 | $211.78 |
| Jordan | $268.29 | $250.00 | $211.76 |
| Priya | $268.29 | $250.00 | $211.76 |
| Sam | $175.61 | $200.00 | $211.76 |
| Luis | $109.76 | $125.00 | $176.47 |
| Ava | $109.76 | $125.00 | $176.47 |
| Theo | Not in the pool. Out here: this pool includes servers paid with a tip credit. | ||
| Kim | Not in the pool. Out here: this pool includes servers paid with a tip credit. | ||
| Rafa | Not in the pool. Out here: this pool includes servers paid with a tip credit. | ||
| Dana | Not in the pool. Federal law bars them from other workers' pooled tips. | ||
| Total | $1,200.00 | $1,200.00 | $1,200.00 |
Fictional restaurant and staff. The guest-facing staff here are assumed to meet Iowa's condition for sharing (see who can be in the tip pool, above). Percentages and point weights are examples, not a recommendation. Shares are rounded to the cent, and any leftover cent goes to the first server. Run your own numbers in the tip pooling calculator.
Ferry Tip Manager: support pool split by hours
Servers and bartenders pay into the support pool, and Tip Manager splits it by hours worked. Each person sees their share, with no spreadsheet at close.
Who it's for Full-service restaurants that tip out bussers, runners and bar backs
08Service charges
Service charges vs tips in Iowa
Iowa has no service charge rule of its own. Under federal law a mandatory service charge is not a tip, and any part paid to staff counts as wages.
| Question | OptionalTip | MandatoryService charge |
|---|---|---|
| Who sets the amount | The guest | The business |
| Who it belongs to | The worker it was left for, or the pool | Iowa separates a voluntary tip from a charge for service. Under federal law, service charges paid to staff are wages, not tips.[2] |
| Can it go to staff? | Yes, through the pool | Yes. Amounts paid to staff are wages, not tips.[3] |
| How it's taxed (federal) | Tip income the worker reports | Regular wages, with payroll taxes[10][11] |
| Guest notice | None needed | No state rule. Federal law sets no menu or receipt notice rule.[2] |
- Step 1Did the guest choose whether to pay it, and how much?YesIt's a tip. It belongs to staff.NoIt's a mandatory charge. Go to step 2.
- Step 2What does Iowa say?Federal ruleIowa separates a voluntary tip from a charge for service. Under federal law, service charges paid to staff are wages, not tips.[2]
- Step 3Check the cityNo city service charge rules on file for Iowa.
- Menu and receipt notice
- No state rule. Federal law sets no menu or receipt notice rule.[2]
- Large-party auto gratuities
- Mandatory charges are not voluntary tips. Federal service charge rules apply to covered employers.[2]
Local service charge rules
No local service charge rules on file for Iowa.
More on the difference: service charge vs tip.
09Card tips
Card tips in Iowa: fees and payout timing
In Iowa only the tip's share of the card processing fee can come out of a card tip, under federal rules. Payout deadline: federally covered card tips are due by regular payday. Iowa paydays generally fall within 12 days of period end, excluding Sundays and holidays.
Federal law allows only the actual proportional processing cost, without cutting into minimum wage. Iowa tip and deduction rules also apply.[3]
When card tips have to land
- TonightGuest adds a tip On the card, at the table.
- CloseShift is tallied The pool is split by your rules.
- DeadlineIowa rule Federally covered card tips are due by regular payday. Iowa paydays generally fall within 12 days of period end, excluding Sundays and holidays.[4]
- Last dayFinal pay Due by the next regular payday for the period the wages were earned. Commission rules are separate.[4]
Paydays: Monthly, semimonthly or biweekly. Payday generally within 12 days of period end, excluding Sundays and legal holidays. Written variations are possible.[4]
Paying tips on a payroll card
- Allowed?Depends
- Worker consent needed?Yes
- Free way to get the money?State ruleFunds available by payday, and all wages reachable without a fee. Free transaction rules depend on wages owed and limits.[6]
- Must you offer another option?Yes
- Holding cash tipsFederal ruleNo state rule. Federal rule applies: employer may collect to administer a valid pool, then distribute under the regular-payday rule. No broader authorization to retain cash tips is established.[3][2]
- Tips shown on the pay stubNo (federal)No state rule. Federal rule applies: no. FLSA does not require pay stubs; state laws and employer records are separate.[13][2]
Ferry Pay: each tip share, paid out digitally
Each person's direct tips, tip outs and payable amount in one view, then paid through Ferry Pay. No cash to keep on hand for payouts. Eligibility and fees apply.
Who it's for Operators who want to stop the nightly cash run
“Since launching this card program, we've reduced our cash-carrying costs by over 66 percent”
10Records
Records and notices in Iowa
Keep each tipped worker's tips and hours on record, shift by shift. Iowa: payroll records at least 3 years from last entry.
Iowa State
- Tip records Rule 234.6 requires tip reports, credit amounts and hours in tipped and nontipped jobs. Pay statements show hours, wages and deductions.[9]
- How long to keep them Payroll records at least 3 years from last entry. Supplemental records generally 2 years. Separate state notice duties also apply.[9]
- Tip credit notice Required. Federal notice covers cash wage, credit amount, actual-tip limit, retention and pooling. Iowa Code 91A.6 adds separate wage and payday notices.[3]
- Posters and forms Iowa minimum wage notice.[9]
Everywhere Federal
- Tip records Maintain employee identity, time and pay records. Tip-credit employers additionally retain tipped employee, reported tips, credit amounts and hours/earnings by tipped and nontipped occupation. No-tip-credit employers operating mandatory pools record each recipient and weekly/monthly tips. IRS daily records/reporting are separate obligations.[3]
- How long to keep them FLSA: payroll records at least three years; underlying wage-computation records two years. Tax retention is separate.[14]
- Tip credit notice Oral or written notice must state cash wage; tip credit amount; credit cannot exceed actual tips; employee retains tips except valid traditional pool; credit unavailable until informed. Traditional pool contribution amounts also disclosed.[3]
- A written pool policy Good practice, not a federal rule: who's in, how it splits, when it pays. Share it with staff. How to write one.
Think your tips were handled wrong in Iowa?
Workers in Iowa can file a tip or wage claim with the Iowa Department of Inspections, Appeals, and Licensing (515-631-8901). Filing is free, and this page can't settle a dispute; the state can.[16]
Retaliation: 91A.10(5) prohibits discharge or discrimination because a worker filed a complaint, assigned a wage claim, or brought a wage action.[4]
Penalties: Unpaid wages plus court costs and attorney fees. Intentional failures add capped liquidated damages, and civil penalties are possible.[4]
Can they take this out of my tips?
- Walkouts and dine-and-dashNot allowedNot allowed for FLSA-covered employers. Tips can't pay business costs. Iowa limits on regular wage deductions apply separately.[3]
- BreakageNot allowedNot allowed for FLSA-covered employers. Tips can't pay business costs. Iowa limits on regular wage deductions apply separately.[3]
- Register shortagesNot allowedNot allowed for FLSA-covered employers. Tips can't pay business costs. Iowa limits on regular wage deductions apply separately.[3]
- UniformsNot allowedNot allowed for FLSA-covered employers. Tips can't pay business costs. Iowa limits on regular wage deductions apply separately.[3]
- Card processing feesDependsIowa Code 91A.5 limits wage deductions. Exceptions for customer credit, sole access and authorization depend on facts. Federal tip rules also apply.[3]
- A manager's shareNot allowedFederal law bars employers and managers from taking workers' tips.[3]
11Law changes
What changed in Iowa tip law, and what's coming
No statewide increase with a published amount is on file for Iowa as of . Most recent change: ARC 8749C replaced chapter 217. Tip ownership, employee-agreed pooling and dual-job limits carried over, now in rules 233.4 to 233.7 ().
- ChangedARC 8749C replaced chapter 217. Tip ownership, employee-agreed pooling and dual-job limits carried over, now in rules 233.4 to 233.7.[2]
Key statutes
- Iowa Code 91D.1
- Iowa Code 91A.3-.6, .8, .10, .12
- 481 IAC 233.4-.7
- Iowa Code 331.304(12)
Not covered here? Ask the Iowa Department of Inspections, Appeals, and Licensing at 515-631-8901 or on dial.iowa.gov/i-need/claims/how-do-i-wage-claim.
12FAQ
Iowa tip law questions
Plain answers to the 8 questions restaurant owners and staff ask most about Iowa tip law, each linked to its source.
What is Iowa's tipped minimum wage?
How big can Iowa's tip credit be?
How much in tips makes someone a tipped worker?
Can an Iowa employer require a tip pool?
Iowa's rule covers tips split, or redistributed by the employer, on a basis the employees agree on among themselves. Only what each worker receives and keeps counts as that worker's tips.[2]
Is there a starting wage for new hires?
Yes. Employers may pay an initial employment wage of $6.35 an hour for the first 90 days, at any age. Federally covered workers still get the federal minimum.[6]
Can tips cover wages for a second job?
No. Iowa allows no tip credit for hours in a job that doesn't meet the tip qualification.[2]
Can wages go on a debit card?
Can the employer charge for a branded uniform through payroll?
The agency says no for a uniform with the business logo or colors. Generic clothing can be treated differently under deduction rules.[6]
13Compare
How Iowa compares with nearby states
Iowa borders Illinois, Minnesota, Missouri, Nebraska, South Dakota and Wisconsin. Illinois, Minnesota, Missouri, Nebraska and South Dakota pay a higher minimum wage than Iowa's $7.25. Running locations on both sides of a line? Each one follows its own state's rules.
Neighboring states
- Illinois tip laws$15.00 min wage $9.00 tipped cash wage Above $2.13
- Minnesota tip laws$11.41 min wage No tip credit No tip credit
- Missouri tip laws$15.00 min wage $7.50 tipped cash wage Above $2.13
- Nebraska tip laws$15.00 min wage $2.13 tipped cash wage $2.13 cash
- South Dakota tip laws$11.85 min wage $5.925 tipped cash wage Above $2.13
- Wisconsin tip laws$7.25 min wage $2.33 tipped cash wage Above $2.13
States with the same rules
Same tip credit class as Iowa: Tip credit, cash wage above federal.
- Arkansas tip laws$11.00 min wage $2.63 tipped cash wage Also a tip credit with a cash wage above $2.13, and only the tip's share of card fees
- Connecticut tip laws$16.94 min wage $6.38 tipped cash wage Also a tip credit with a cash wage above $2.13, and only the tip's share of card fees
- Hawaii tip laws$16.00 min wage $14.75 tipped cash wage Also a tip credit with a cash wage above $2.13, and only the tip's share of card fees
- Rhode Island tip laws$16.00 min wage $3.89 tipped cash wage Also a tip credit with a cash wage above $2.13, and only the tip's share of card fees
- Maryland tip laws$15.00 min wage $3.63 tipped cash wage Also a tip credit with a cash wage above $2.13, and only the tip's share of card fees
- Idaho tip laws$7.25 min wage $3.35 tipped cash wage Also a tip credit with a cash wage above $2.13, and only the tip's share of card fees
The law decides who's in. Ferry runs the split.
See how operators set pool rules in Ferry Tip Manager and pay tips out without a cash run. Bring your own Iowa setup.
14Sources
Sources for Iowa tip laws
Every figure on this page links to one of these 16 sources: 11 for Iowa and 5 for the federal baseline. They are statutes, regulations and government agency pages, each with the date it was checked.
- 1Minimum Wages for Tipped Employees July 1 2026United States Department of Labor · Official source · Page updated · Checked Pinpoint: Iowa row and cash-wage groupwww.dol.gov/agencies/whd/state/minimum-wage/tipped
What the source says
“Iowa $7.25 40% of the applicable minimum wage ($2.90) $4.35 More than $30”
- 2Current 481 IAC Chapter 233 WagesIowa Legislature or Iowa state agency · Official source · Page updated · Checked Pinpoint: 481 IAC 233.7; 481 IAC 233.6; 481 IAC 233.6 employee mutual-agreement languagewww.legis.iowa.gov/docs/iac/chapter/481.233.pdf
What the source says
“When an employee is employed in two occupations, no tip credit can be taken for hours of employment in the occupation for which the employee does not meet the tip qualification.”
“Where employees practice tip splitting, as where food servers give a portion of their tips to the bussers, both the amounts retained by the food servers and those given the bussers are considered tips of the individuals who retain them.”
“upon some basis to which they have mutually agreed among themselves,”
- 3Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act (FLSA)U.S. Department of Labor · Official source · Checked Pinpoint: Tip Credit, paragraph 2; Federal Overtime Problems; Iowa FAQ overtime referralwww.dol.gov/agencies/whd/fact-sheets/15-tipped-employees-flsa
What the source says
“An employer must pay a tipped worker at least $2.13 per hour under the FLSA.”
“the federal minimum wage, which is currently $7.25 per hour.”
“The maximum tip credit that an employer can currently claim is $5.12 per hour: ($7.25 - $2.13 direct (or cash) wage = $5.12).”
- 4Iowa Code 2026 Chapter 91A Wage Payment CollectionIowa Legislature · Official source · Page updated 2026 · Checked Pinpoint: 91A.3(1); 91A.4www.legis.iowa.gov/docs/code/2026/91A.html
What the source says
“A regular payday shall not be more than twelve days, excluding Sundays and legal holidays, after the end of the period in which the wages were earned.”
“not later than the next regular payday for the pay period in which the wages were earned”
“plus liquidated damages, court costs and any attorney”
- 5Iowa Code 2026 Section 331.304 County Ordinance LimitsIowa Legislature · Official source · Page updated 2026 · Checked www.legis.iowa.gov/docs/code/2026/331.304.pdf
What the source says
“minimum or living wage rate”
- 6Iowa Wage Claims FAQIowa Department of Inspections Appeals and Licensing · Official source · Checked Pinpoint: Initial employment wage FAQ; Payroll debit card FAQdial.iowa.gov/i-need/claims/how-do-i-wage-claim/wage-claims-faq
What the source says
“An Iowa employer is allowed to pay an “initial employment wage” of $6.35 per hour for the first 90 days.”
“Is payment of wages by debit card allowed in Iowa? Yes, if the following conditions are met:”
“The employee agrees in writing to accept wages through a debit card.”
- 7Iowa Code 2026 Chapter 91D Minimum WageIowa Legislature · Official source · Page updated 2026 · Checked Pinpoint: 91D.1(1)(a); 91D.1(1)(c)www.legis.iowa.gov/docs/code/2026/91D.html
What the source says
“The state hourly wage shall be at least $6.20 as of April 1, 2007, and $7.25 as of January 1, 2008.”
“not to exceed forty percent of the applicable minimum wage.”
“who customarily and regularly receives more than thirty dollars a month in tips”
- 8875 Iowa Administrative Code Chapter 217 WagesIowa Legislature · Official source · Page updated · Checked www.legis.iowa.gov/docs/iac/chapter/01-08-2025.875.217.pdf
- 9Current 481 IAC Chapter 234 RecordsIowa Legislature or Iowa state agency · Official source · Page updated · Checked Pinpoint: 481 IAC 234.6(1)(a)-(d); 481 IAC 234.4www.legis.iowa.gov/docs/iac/chapter/481.234.pdf
What the source says
“Weekly or monthly amount reported by the employee, to the employer, of tips received”
“Each employer shall preserve payroll records for at least three years from the last date of entry,”
“shall post and keep posted a notice explaining the Act, as prescribed by the director, in conspicuous places in every establishment”
- 10Tip recordkeeping and reportingInternal Revenue Service · Official source · Checked Pinpoint: Service charges are not tips, paragraph 2; qualified tips deduction, net-income limit; tip income, Social Security/Medicarewww.irs.gov/businesses/small-businesses-self-employed/tip-recordkeeping-and-reporting
What the source says
“Service charges (also referred to as “auto-gratuities”), when distributed to an employee, are generally treated as wages paid by the employer to the employee rather than tips paid by the customer.”
“For self-employed individuals, the deduction may not exceed the individual’s net income (without regard to this deduction) from the trade or business in which the tips were earned.”
“These amounts are subject to federal income tax and generally are also subject to Social Security and Medicare taxes.”
- 11Revenue Ruling 2012-18Internal Revenue Service · Official source · Page updated 2012 · Checked Pinpoint: Q 1/A 1, four distinguishing factors; p. 1, ruling headingwww.irs.gov/pub/irs-drop/rr-12-18.pdf
What the source says
“compulsion; (2) the customer must have the unrestricted right to determine the amount; (3) the payment should not be the subject of negotiation or dictated by employer policy; and (4) generally, the customer has the right to determine who receives the payment.”
“Rev. Rul. 2012-18”
- 12What is a payroll card?Consumer Financial Protection Bureau · Official source · Page updated · Checked Pinpoint: Federal Regulation E consumer explanation; Iowa card program is voluntarywww.consumerfinance.gov/ask-cfpb/what-is-a-payroll-card-en-401
What the source says
“Your employer has to offer you at least one alternative to a payroll card.”
- 13Questions and Answers About the FLSA, DOL WHDU.S. Department of Labor · Official source · Checked Pinpoint: Recordkeeping and Notices, Are pay stubs required?www.dol.gov/agencies/whd/flsa/faq
What the source says
“However, the FLSA does not require an employer to provide employees pay stubs.”
- 14Fact Sheet #21: Recordkeeping Requirements under the Fair Labor Standards Act (FLSA)U.S. Department of Labor · Official source · Page updated · Checked Pinpoint: Posting, paragraph 1www.dol.gov/agencies/whd/fact-sheets/21-flsa-recordkeeping
What the source says
“Each employer shall preserve for at least three years payroll records, collective bargaining agreements, sales and purchase records.”
“Employers must display an official poster outlining the provisions of the Act, available at no cost from local offices of the Wage and Hour Division and toll-free, by calling 1-866-4USWage (1-866-487-9243).”
“Records on which wage computations are based should be retained for two years,”
- 15Your Rights Under Iowa Minimum Wage LawIowa Legislature or Iowa state agency · Official source · Page updated · Checked workforce.iowa.gov/media/234/download
What the source says
“Phone: 515.631.8901”
- 16File a Wage ClaimIowa Department of Inspections Appeals and Licensing · Official source · Checked Pinpoint: Opening paragraph; Page titledial.iowa.gov/i-need/claims/how-do-i-wage-claim
What the source says
“The Iowa Department of Inspections, Appeals, and Licensing (DIAL) enforces Iowa wage law, including the Iowa minimum wage.”
“File a Wage Claim”
15Methodology
How we research these pages
Every figure on this page comes from an official source, a statute, a regulation or a government agency page, and links to it where it is used. Ferry checks the page against those sources on a schedule and logs every change.
- 1
Official sources only
Statutes, regulations, state labor agencies, city ordinances and the U.S. Department of Labor. No vendor blogs, no AI answers, no secondary summaries as the only source.
- 2
Every figure is linked
Each rate and rule carries a numbered link to the statute or agency page behind it, with the exact pinpoint and, where available, a link that opens at the sentence itself.
- 3
Re-checked on a schedule
Every page is re-checked each January and July, and whenever a state or city changes a rate. Cash wage plus tip credit is checked against the minimum wage on every build.
- 4
Gaps are left out, not guessed
If a rule can't be confirmed from an official source, it isn't shown. The page points to the state agency instead.
What changed on this page
- First version of this page. Every figure was checked against the official sources listed on this page.
Researched by Ferry's tip operations research team. Last reviewed .
Changes to the law itself are listed in What changed and what's coming.
16Every state
Tip laws in every state
Pick any state for its tip credit, tip pool, service charge and card tip rules. Each chip shows the state's tip credit class.
- No tip creditNo tip credit
- Above $2.13Tip credit, cash wage above federal
- $2.13 cashTip credit, federal cash wage
- FederalFederal rates apply
51 of 51 state pages. Open the master guide for the federal baseline, tip credit classes and the full comparison table.