Minnesota tip laws (2026)
Minnesota has no tip credit, so tipped workers get the full $11.41 an hour in 2026 before tips, rising to $11.87 in 2027. Minneapolis and most Saint Paul employers pay $16.37. Employers can't require tip pools or take card fees out of tips.
Minnesota at a glance
No tip creditMinnesota: $11.41 an hour minimum wage and no tip credit, so tipped staff get the full $11.41 before tips.
| State minimum wage | $11.41/hr | Statewide from .[1] |
|---|---|---|
| Tipped cash wage | $11.41 | Full minimum wage. Tips go on top.[1] |
| Max tip credit | None | Tips can't count toward wages.[1] |
| Tip pooling | Depends | Mandatory pools: it depends.[2][3] |
| Card-fee deduction | Not allowed | The full tip goes to the worker.[2] |
| Card tip payout | Card and electronic tips are paid no later than the next scheduled pay period.[2] | |
| Local minimum wages | 2 places | Local rates on file. See all[1] |
Rates verified against the Minnesota Department of Labor and Industry, Labor Standards 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 Minnesota?
In Minnesota you can't take a tip credit and can't take card processing fees out of tips. Each answer below carries its condition and an official source.
| Number | Can you… | Answer | The condition |
|---|---|---|---|
| 01 | Take a tip credit against minimum wage? | No | Pay the full $11.41 an hour before tips.[1] |
| 02 | Make staff join a tip pool? | Depends | Employer-run pools are banned. Workers serving the same customers, or sharing a shift tip jar, can split tips.[3] |
| 03 | Include bartenders, bussers, runners and hosts? | Yes | All four can share.[2] |
| 04 | Include cooks and dishwashers? | Yes | Cooks and dishwashers can get shares tipped workers choose to give. Employers can't require tipped staff to share with them.[4] |
| 05 | Give managers or supervisors a share? | No | Federal law bars managers and supervisors from other workers' tips. They can keep tips for service they directly and solely provide.[5] |
| 06 | Let an owner keep any of the tips? | No | Federal law bars employers from keeping any part of workers' tips, directly or through a pool.[5] |
| 07 | Pick your own split (hours, points or percentages)? | Depends | Workers agree among themselves, with no employer pressure. At their request the employer can hold and pay out shared tips.[2] |
| 08 | Take card processing fees out of tips? | No | The worker gets the full tip on the slip.[2][3] |
| 09 | Hold card tips until payday? | Deadline | Card and electronic tips are paid no later than the next scheduled pay period.[2] |
| 10 | Cover walkouts, breakage or register shortages from tips? | No | Not from tips.[5][2] |
| 11 | Keep a mandatory service charge for the house? | Depends | Only if you clearly tell guests it doesn't go to staff.[6] |
| 12 | Pay tips on a payroll card? | Yes | With the worker's consent. Offer another way to get paid too.[7] |
03State vs federal
Minnesota vs federal law
Minnesota sets a stricter rule than federal law on 5 of the 10 rules below, starting with a $11.41 minimum wage against the federal $7.25. Where the two differ, the rule that is better for the worker applies.
| Rule | Federal (FLSA) | Minnesota | Comparison |
|---|---|---|---|
| Minimum wageStricter | Federal$7.25[5] | Minnesota$11.41[1] | Stricter |
| Tipped cash wageStricter | Federal$2.13[5] | Minnesota$11.41 (full minimum wage)[1] | Stricter |
| Max tip creditStricter | Federal$5.12[5] | MinnesotaNone | Stricter |
| Who counts as tippedNot applicable | FederalMore than $30 a month in tips, customarily and regularly received in the occupation.[5] | MinnesotaNot applicable: Minnesota has no tip credit. | Not applicable |
| 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.[5] | MinnesotaFederal law bars managers and supervisors from other workers' tips. They can keep tips for service they directly and solely provide.[5] | 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.[5] | MinnesotaCooks and dishwashers can get shares tipped workers choose to give. Employers can't require tipped staff to share with them.[4] | State rule |
| Card fees from tipsStricter | 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.[5] | MinnesotaNot allowed[2] | Stricter |
| 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.[5] | MinnesotaCard and electronic tips are paid no later than the next scheduled pay period.[2] | State rule |
| Mandatory service chargesStricter | 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.[5] | MinnesotaStaff's money unless you tell guests otherwise[6] | Stricter |
| 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.[5] | MinnesotaState overtime starts after 48 hours a week. Federal overtime starts after 40 for covered workers. Tips never count toward either.[8] | State rule |
Every state starts from the same federal floor. Federal tip law baseline: the FLSA rules, rates and sources, and how Minnesota fits among the four tip credit classes.
04Wages
Minimum wage and the tip credit in Minnesota
Minnesota doesn't allow a tip credit. Tipped staff earn the full $11.41 an hour from the employer, and every tip lands on top.[1]
One server, one 30-hour week in Minnesota
No tip credit means tips never reduce what you pay. A slow night doesn't change the wage line. Fictional worker and tips.
- Tip credit conditions
- Not applicable: Minnesota has no tip credit.
- Who counts as tipped
- Not applicable: Minnesota has no tip credit.
- Overtime
- State overtime starts after 48 hours a week. Federal overtime starts after 40 for covered workers. Tips never count toward either.[8]
- Side work and dual jobs
- Not applicable: Minnesota has no tip credit.
Other rates
| Rate | Hourly |
|---|---|
| Youth or training Under 20 trainingFirst 90 days in a row on the job. Employers can't push out other workers. A higher city minimum may apply.[1] | $9.31 |
Scheduled increases
- Now, since $11.41
- $11.87General statewide minimum wage. 177.24 annual indexing. Training wage $9.68 for workers under 20 in their first 90 days. Still no tip credit[1]
05Local rates
City and county minimum wages in Minnesota
2 cities and counties in Minnesota set their own minimum wage, from $14.25 in Saint Paul to $16.37 in Minneapolis. A restaurant inside one of them pays the local rate, not the $11.41 state rate.[1]
| City or county | Rate | vs state $11.41 | Tipped cash wage | Effective |
|---|---|---|---|---|
| MinneapolisEvery employer size and age. No tip credit.[9] | $16.37 | +$4.96 over state | $16.37 | Next change $17.02 on |
| Saint PaulLarge: 101 or more employeesRises to $17.02 on January 1, 2027. No tip credit.[10] | $16.37 | +$4.96 over state | $16.37 | Next change $17.02 on |
| Saint PaulSmall: 6 to 100 employeesRises to $17.02 on July 1, 2027. No tip credit.[10] | $16.37 | +$4.96 over state | $16.37 | Next change $17.02 on |
| Saint PaulMicro: 5 or fewer employeesRises to $15.00 on July 1, 2027. No tip credit.[10] | $14.25 | +$2.84 over state | $14.25 | Next change $15.00 on |
Local wages
Minneapolis and Saint Paul pay more
Both cities set their own minimums, and neither allows a tip credit. Saint Paul's rate depends on employer size.[1][9][10]
| Where | Current rate | Since | Next rate | Next change |
|---|---|---|---|---|
| Statewide | $11.41 | Jan 1, 2026 | $11.87 | Jan 1, 2027 |
| Minneapolis (all employers) | $16.37 | Jan 1, 2026 | $17.02 | Jan 1, 2027 |
| Saint Paul, 101+ employees | $16.37 | Jan 1, 2026 | $17.02 | Jan 1, 2027 |
| Saint Paul, 6 to 100 employees | $16.37 | Jul 1, 2026 | $17.02 | Jul 1, 2027 |
| Saint Paul, 5 or fewer employees | $14.25 | Jul 1, 2026 | $15.00 | Jul 1, 2027 |
06Tip pool
Who can be in the tip pool in Minnesota
Minnesota 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 | Allowed | Only by the workers' own agreement, with no employer pressure. Managers and employers get no share.[2] |
| Bartender | Allowed | Only by the workers' own agreement, with no employer pressure. Managers and employers get no share.[2] |
| Busser | Allowed | Only by the workers' own agreement, with no employer pressure. Managers and employers get no share.[2] |
| Food runner | Allowed | Only by the workers' own agreement, with no employer pressure. Managers and employers get no share.[2] |
| Host | Allowed | Only by the workers' own agreement, with no employer pressure. Managers and employers get no share.[2] |
| Barback | Allowed | Only by the workers' own agreement, with no employer pressure. Managers and employers get no share.[2] |
| Expo | Allowed | Only by the workers' own agreement, with no employer pressure. Managers and employers get no share.[2] |
| Back of house | ||
| Cook | Allowed | Only if tipped workers choose to share. The employer can't require it.[2] |
| Dishwasher | Allowed | Only if tipped workers choose to share. The employer can't require it.[2] |
| Leadership | ||
| Shift lead | Depends | Can receive voluntary shares unless they're actually a manager. Managers get no share.[2] |
| Manager or supervisor | Not allowed | Federal rule: no share of other workers' tips.[2] |
| Owner | Not allowed | Federal rule: employers can't keep any part of workers' tips.[2] |
- Managers and supervisors
- Federal law bars managers and supervisors from other workers' tips. They can keep tips for service they directly and solely provide.[5]
- Owners
- Federal law bars employers from keeping any part of workers' tips, directly or through a pool.[5]
- Back of house
- Cooks and dishwashers can get shares tipped workers choose to give. Employers can't require tipped staff to share with them.[4]
- Who sets the percentages
- Workers agree among themselves, with no employer pressure. At their request the employer can hold and pay out shared tips.[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.[5][2]
- Pooling allowed
- It depends.[2]
Tip pools
Workers decide whether to share
Federal law lets employers require pools. Minnesota doesn't. Sharing has to come from the workers.[2][4][3][5]
Allowed
- Workers agree to share, with no employer pressure
- Splitting tips among staff serving the same customers
- Sharing a shift tip jar
- Employer holds and pays out shares when workers ask
Not allowed
- Employer-required pools
- Making servers tip out the kitchen
- Any share for managers or the employer
- Card-fee deductions from tips
07Put it to work
Setting up a tip pool in Minnesota
Under Minnesota rules, 9 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 | $220.00 | $203.39 | $133.34 |
| Jordan | $220.00 | $203.39 | $133.33 |
| Priya | $220.00 | $203.39 | $133.33 |
| Sam | $144.00 | $162.71 | $133.33 |
| Luis | $90.00 | $101.69 | $111.11 |
| Ava | $90.00 | $101.69 | $111.11 |
| Theo | $72.00 | $81.36 | $155.56 |
| Kim | $72.00 | $81.36 | $155.56 |
| Rafa | $72.00 | $61.02 | $133.33 |
| Dana | Not in the pool. Federal rule: no share of other workers' tips. | ||
| Total | $1,200.00 | $1,200.00 | $1,200.00 |
Fictional restaurant and staff. 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 Minnesota
In Minnesota a mandatory service charge is presumed to belong to staff unless the business clearly tells guests otherwise.
| 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 | Staff, unless the business clearly tells guests otherwise.[6] |
| Can it go to staff? | Yes, through the pool | Yes. Amounts paid to staff are wages, not tips.[5] |
| How it's taxed (federal) | Tip income the worker reports | Regular wages, with payroll taxes[11][12] |
| Guest notice | None needed | Bold notice on a menu, placard, bill or other customer material. Placards at least 18-point type, other notices 9-point.[4] |
- 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 Minnesota say?Staff own it unless disclosedStaff, unless the business clearly tells guests otherwise.[6]
- Step 3Check the cityNo city service charge rules on file for Minnesota.
- Menu and receipt notice
- Bold notice on a menu, placard, bill or other customer material. Placards at least 18-point type, other notices 9-point.[4]
- Large-party auto gratuities
- Automatic charges customers would read as pay for staff are tips, unless a clear notice says they aren't.[6]
Local service charge rules
No local service charge rules on file for Minnesota.
More on the difference: service charge vs tip.
Service charges
A service charge is a tip unless the notice says otherwise
If customers would read a required charge as pay for the staff, it belongs to the staff. The exception needs a specific notice.[6][4]
- Notice says clearly the charge isn't the staff's property
- Bold type
- On a menu, placard, the front of the bill or other customer material
- Placards at least 18-point type
- Other notices at least 9-point type
09Card tips
Card tips in Minnesota: fees and payout timing
In Minnesota the card processing fee can't come out of a worker's tip; the full tip goes to the worker. Payout deadline: card and electronic tips are paid no later than the next scheduled pay period.
Workers get the full card or electronic tip. No card-fee deductions since August 1, 2024.[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.
- DeadlineMinnesota rule Card and electronic tips are paid no later than the next scheduled pay period.[2]
- Last dayFinal pay Fired: due on demand, with penalties after 24 hours. Quit: next payday, or the second if within 5 days, never past 20 days.[13]
Paydays: Wages and tips at least every 31 days, on a set regular payday.[14]
Paying tips on a payroll card
- Allowed?Yes
- Worker consent needed?Yes
- Free way to get the money?State ruleWorkers get one free way to take their full net pay on or after payday. Many card fees are banned.[7]
- Must you offer another option?Yes
- Holding cash tipsState ruleThe employer can hold tips for sharing only when workers ask. Pay deadlines still apply, and tips can't be diverted.[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.[15][16]
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 Minnesota
Keep each tipped worker's tips and hours on record, shift by shift. Minnesota: at least 3 years for wage and hour records.
Minnesota State
- Tip records Keep names, pay rates, pay per period, daily and weekly hours, and pay statements. Tips can't offset state wages.[17]
- How long to keep them At least 3 years for wage and hour records.[17]
- Tip credit notice Not applicable: Minnesota has no tip credit.
- Posters and forms Minnesota minimum-wage notice under 177.31; Employee wage notice and earnings statements under 181.032; Payroll-card written disclosure/consent and issuer notice where used.[18][16][7]
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.[5]
- How long to keep them FLSA: payroll records at least three years; underlying wage-computation records two years. Tax retention is separate.[19]
- Tip credit notice Not needed in Minnesota: there's no tip credit.
- 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 Minnesota?
Workers in Minnesota can file a tip or wage claim with the Minnesota Department of Labor and Industry, Labor Standards (651-284-5075). Filing is free, and this page can't settle a dispute; the state can.[1]
Retaliation: No firing, discipline or threats over good-faith legal reports or cooperation with investigations.[20]
Penalties: Unpaid wages or tips plus an equal amount in damages. Repeated or willful violations can add $10,000 per violation, per worker.[21]
Can they take this out of my tips?
- Walkouts and dine-and-dashNot allowedFederal law bars covered employers from taking tips for business costs. Minnesota's deduction rules don't override that.[5]
- BreakageNot allowedFederal law bars covered employers from taking tips for business costs. Minnesota's deduction rules don't override that.[5]
- Register shortagesNot allowedFederal law bars covered employers from taking tips for business costs. Minnesota's deduction rules don't override that.[5]
- UniformsNot allowedFederal law bars covered employers from taking tips for business costs. Minnesota's deduction rules don't override that.[5]
- Card processing feesNot allowedWorkers get the full card tip. No card-fee deductions.[2]
- A manager's shareNot allowedEmployers and managers get no share of workers' tips.[2]
11Law changes
What changed in Minnesota tip law, and what's coming
Next scheduled change: the Minnesota minimum wage goes to $11.87 on .
- ComingMinimum wage goes to $11.87 (General statewide minimum wage).[1]
Key statutes
- Minnesota 177.23–.25
- Rule 5200.0080
- Minnesota 177.255, .27, .30–.31
- Minnesota 181.032, .101, .13–.14, .79
Not covered here? Ask the Minnesota Department of Labor and Industry, Labor Standards at 651-284-5075 or on dli.mn.gov/business/employment-practices.
12FAQ
Minnesota tip law questions
Plain answers to the 8 questions restaurant owners and staff ask most about Minnesota tip law, each linked to its source.
Does Minnesota allow a tip credit?
What is the minimum wage in Minneapolis and Saint Paul?
Can Minnesota employers require a tip pool?
Can cooks and dishwashers get tips?
Can card-processing fees come out of tips?
Is a service charge a tip in Minnesota?
When does overtime start for tipped workers?
13Compare
How Minnesota compares with nearby states
Minnesota borders Iowa, North Dakota, South Dakota and Wisconsin. South Dakota pays a higher minimum wage than Minnesota's $11.41. Running locations on both sides of a line? Each one follows its own state's rules.
Neighboring states
States with the same rules
Same tip credit class as Minnesota: No tip credit.
- Nevada tip laws$12.00 min wage No tip credit Also no tip credit, and no card fees from tips
- California tip laws$16.90 min wage No tip credit Also no tip credit, and no card fees from tips
- Montana tip laws$10.85 min wage No tip credit Also no tip credit
- Alaska tip laws$14.00 min wage No tip credit Also no tip credit
- Oregon tip laws$15.55 min wage No tip credit Also no tip credit
- Washington tip laws$17.13 min wage No tip credit Also no tip credit
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 Minnesota setup.
14Sources
Sources for Minnesota tip laws
Every figure on this page links to one of these 22 sources: 18 for Minnesota and 4 for the federal baseline. They are statutes, regulations and government agency pages, each with the date it was checked.
- 1Minimum Wage in MinnesotaMinnesota Department of Labor and Industry · Official source · Checked Pinpoint: 2026 and 2027 tablewww.dli.mn.gov/minwage
What the source says
“State minimum wage $11.41 an hour $11.87 an hour”
“90-day training wage (under 20 years of age) $9.31 an hour $9.68 an hour”
“St. Paul and Minneapolis both have minimum wage ordinances that may require a higher rate of pay.”
- 2Minnesota 177.24 Minimum Wage and GratuitiesMinnesota Revisor of Statutes · Official source · Checked Pinpoint: 177.24(3)www.revisor.mn.gov/statutes/cite/177.24
What the source says
“This section does not prevent an employee from voluntarily sharing gratuities with other employees.”
“No employer may require an employee to contribute or share a gratuity received by the employee with the employer”
“The agreement to share gratuities must be made by the employees without employer coercion or participation”
- 3Tips Tip CreditMinnesota Department of Labor and Industry · Official source · Checked dli.mn.gov/tips
What the source says
“No employer may require an employee to share a tip with the employer or other employees or to contribute to any tip pool”
“As of Aug. 1, 2024 , employees must receive the full amount of tips paid by card or e-payment.”
- 4Rule 5200.0080 GratuitiesMinnesota Revisor of Statutes · Official source · Checked Pinpoint: 5200.0080 subp 6,177.24(3); 5200.0080 subp 4bwww.revisor.mn.gov/rules/5200.0080
What the source says
“An indirect service employee is a person who assists a direct service employee, these include, but are not limited to, bus people, dishwashers, cooks, or hosts.”
“clear and conspicuous notice that the obligatory charge is not a gratuity”
“Type which is at least 18 point (one-fourth inch) on the placard, or 9 point (one-eighth inch) or larger on all other notices is clear and conspicuous.”
- 5Fact Sheet 15 Tipped Employees Under the FLSAUnited States Department of Labor · Official source · Checked Pinpoint: Employers, Including Managers and Supervisors, May Not Keep Tips; Employers may not keep tips; Tip Credit, paragraph 2www.dol.gov/agencies/whd/fact-sheets/15-tipped-employees-flsa
What the source says
“A manager or supervisor may keep only those tips that they receive directly from a customer for the service they directly and solely provide.”
“Regardless of whether an employer takes a tip credit, the FLSA prohibits employers from keeping any portion of employees’ tips for any purpose, whether directly or through a tip pool.”
“An employer must pay a tipped worker at least $2.13 per hour under the FLSA.”
- 6Minnesota 177.23 DefinitionsMinnesota Revisor of Statutes · Official source · Checked Pinpoint: 177.23(9)www.revisor.mn.gov/statutes/cite/177.23
What the source says
“for which no clear and conspicuous notice is given by the employer to the customer, guest, or patron that the charge is not the property of the employee.”
“includes an obligatory charge assessed to customers”
- 7Minnesota 177.255 Payroll CardsMinnesota Revisor of Statutes · Official source · Checked Pinpoint: 177.255(6); 177.255(4),(7)www.revisor.mn.gov/statutes/cite/177.255
What the source says
“An employee who chooses to be paid wages by electronic fund transfer to a payroll card account”
“only after the employee has voluntarily consented in writing to that method of payment.”
“an amount up to and including the total amount of the employee's entire net pay”
- 8Minnesota 177.25 OvertimeMinnesota Revisor of Statutes · Official source · Checked www.revisor.mn.gov/statutes/cite/177.25
What the source says
“No employer may employ an employee for a workweek longer than 48 hours”
- 9Minneapolis Minimum WageCity of Minneapolis · Official source · Checked minimumwage.minneapolismn.gov
What the source says
“the Minneapolis Minimum Wage is $16.37”
- 10Saint Paul Minimum WageCity of Saint Paul · Official source · Page updated · Checked www.stpaul.gov/departments/human-rights-equal-economic-opportunity/labor-standards-enforcement-and-education/minimum-wage
What the source says
“January 1, 2026 $16.37*”
“July 1, 2026 $16.37*”
“July 1, 2026 $14.25 July 1, 2027 $15.00”
- 11Tip 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.”
- 12Revenue 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”
- 13Minnesota 181.13 Discharge PayMinnesota Revisor of Statutes · Official source · Checked Pinpoint: 181.13(a)www.revisor.mn.gov/statutes/cite/181.13
What the source says
“immediately due and payable upon demand of the employee.”
- 14Minnesota 181.101 Wage TimingMinnesota Revisor of Statutes · Official source · Checked Pinpoint: 181.101(a)www.revisor.mn.gov/statutes/cite/181.101
What the source says
“all wages, including salary, earnings, and gratuities earned by an employee at least once every 31 days”
“181.101”
- 15Questions 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.”
- 16Minnesota 181.032 StatementsMinnesota Revisor of Statutes · Official source · Checked www.revisor.mn.gov/statutes/cite/181.032
What the source says
“the total amount of gross pay earned by the employee during that period;”
“an earnings statement”
- 17Minnesota 177.30 RecordsMinnesota Revisor of Statutes · Official source · Checked Pinpoint: 177.30www.revisor.mn.gov/statutes/cite/177.30
What the source says
“the hours worked each day and each workweek by the employee,”
“The records must be kept for three years”
- 18Minnesota 177.31 PostingMinnesota Revisor of Statutes · Official source · Checked www.revisor.mn.gov/statutes/cite/177.31
What the source says
“post the summaries in a conspicuous and accessible place”
- 19Fact 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,”
- 20Minnesota 181.932 Whistleblower ProtectionMinnesota Revisor of Statutes · Official source · Checked Pinpoint: 181.932(1)www.revisor.mn.gov/statutes/cite/181.932
What the source says
“An employer shall not discharge, discipline, penalize, interfere with, threaten, restrain, coerce, or otherwise retaliate or discriminate against an employee”
- 21Minnesota 177.27 EnforcementMinnesota Revisor of Statutes · Official source · Checked Pinpoint: 177.27(7)www.revisor.mn.gov/statutes/cite/177.27
What the source says
“an additional equal amount as liquidated damages.”
- 22Payroll Cards in MinnesotaMinnesota Department of Labor and Industry · Official source · Checked www.dli.mn.gov/business/employment-practices/payroll-cards-minnesota
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.