Part of Ferry's 51-state tip laws guide

South Dakota tip laws (2026)

South Dakota's minimum wage is $11.85 an hour in 2026, and tipped workers get at least half of it in cash: $5.925, which federal tables round to $5.93. On January 1, 2027, the minimum rises to $12.30 and tipped cash to $6.15. Federal rules cover tip pools, card fees and manager shares.

Researched by Ferry's tip operations research teamReviewed How we research these pages
Rates as of Last reviewed

South Dakota at a glance

Tip credit allowed

South Dakota: $11.85 an hour minimum wage. Tipped staff can be paid $5.925 cash, with up to $5.925 counted from tips.

Next change: $12.30 on . General statewide minimum wage[1]
South Dakota tip and wage rates at a glance, as of Nov 3, 2026
State minimum wage$11.85/hrStatewide from .[1]
Tipped cash wage$5.925Plus up to $5.925 in tips = $11.85.[1][2]
Max tip credit$5.925Counted from tips.[3]
Tip poolingAllowedMandatory pools allowed.[4]
Card-fee deductionPro rata onlyOnly the tip's share of the fee, under federal rules.[4]
Card tip payoutFederal rules: card and pooled tips are due by regular payday, with a narrow pool exception.Tip-credit shortfalls are made up each pay period.[4][3]
Local minimum wagesNoneNone on file.[3]

Rates verified against the South Dakota Department of Labor and Regulation, Division of Labor and Management 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 South Dakota?

In South Dakota you can take a tip credit of up to $5.925 an hour, can require staff to join a tip pool and can take out only the tip's share of a card fee. Each answer below carries its condition and an official source.

Yes state law allows itNo state law says noDepends read the conditionFederal rule no state rule, federal applies
What restaurant operators can and can't do with tips in South Dakota
NumberCan you…AnswerThe condition
01Take a tip credit against minimum wage?YesPay at least $5.925 cash and count up to $5.925 in tips. Tips must cover the gap.[1][2][3]
02Make staff join a tip pool?YesAllowed, as long as only eligible staff share.[4]
03Include bartenders, bussers, runners and hosts?DependsBartenders and bussers can share. Food runner and host: fine in a pool for customarily tipped jobs. Non-tipped roles need the full cash minimum with no tip credit. Managers are out.[4]
04Include cooks and dishwashers?DependsCooks and dishwashers can join a pool only with no tip credit and full cash minimum. Paying the full state minimum avoids leaning on tips.[4]
05Give managers or supervisors a share?NoManagers and supervisors who meet the duties test can't take employee tips or pool shares. They keep only tips from service they alone provide.[4]
06Let an owner keep any of the tips?NoOwners with a real 20% stake who help run the place count as managers here. No employer can keep employees' tips.[4]
07Pick your own split (hours, points or percentages)?DependsNo federal cap on a valid mandatory pool. Eligibility, notice and minimum wage rules still apply.[4]
08Take 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.[4]
09Hold card tips until payday?DeadlineFederal rules: card and pooled tips are due by regular payday, with a narrow pool exception. Tip-credit shortfalls are made up each pay period.[4][3]
10Cover walkouts, breakage or register shortages from tips?NoNot from tips.[4]
11Keep a mandatory service charge for the house?Federal ruleRequired service charges aren't tips under federal law. What reaches staff counts as wages, including for overtime. Contracts and other law can decide ownership.[4]
12Pay tips on a payroll card?DependsPaying another way needs employer and employee agreement, and federal rules protect choice. No blanket card approval is implied. Offer another way to get paid too.[3]

03State vs federal

South Dakota vs federal law

South Dakota sets a stricter rule than federal law on 2 of the 10 rules below, starting with a $11.85 minimum wage against the federal $7.25. Where the two differ, the rule that is better for the worker applies.

South Dakota tip rules compared with federal rules (FLSA)
RuleFederal (FLSA)South DakotaComparison
Minimum wageStricterFederal$7.25[4]South Dakota$11.85[1]Stricter
Tipped cash wageStricterFederal$2.13[4]South Dakota$5.925[1][2]Stricter
Max tip creditHigher creditFederal$5.12[4]South Dakota$5.925[3]Higher credit
Who counts as tippedState ruleFederalMore than $30 a month in tips, customarily and regularly received in the occupation.[4]South DakotaMore than $35 per month in tips or other considerations, customarily and regularly received in the occupation.[5]State rule
Managers in the poolState ruleFederalManagers/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.[4]South DakotaManagers and supervisors who meet the duties test can't take employee tips or pool shares. They keep only tips from service they alone provide.[4]State rule
Kitchen in the poolState ruleFederalCooks 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.[4]South DakotaCooks and dishwashers can join a pool only with no tip credit and full cash minimum. Paying the full state minimum avoids leaning on tips.[4]State rule
Card fees from tipsFederal appliesFederalOnly 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.[4]South DakotaFederal rule applies.[3][4]Federal applies
Card tip payoutFederal appliesFederalCharged 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.[4]South DakotaFederal rules: card and pooled tips are due by regular payday, with a narrow pool exception. Tip-credit shortfalls are made up each pay period.[4][3]Federal applies
Mandatory service chargesState ruleFederalA 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.[4]South DakotaRequired service charges aren't tips under federal law. What reaches staff counts as wages, including for overtime. Contracts and other law can decide ownership.[4]State rule
Overtime for tipped staffFederal appliesFederalFor 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.[4]South DakotaFederal overtime: 1.5 times the regular rate after 40 hours a week. It isn't figured on the tipped cash wage, and the credit doesn't grow.[4]Federal applies

Every state starts from the same federal floor. Federal tip law baseline: the FLSA rules, rates and sources, and how South Dakota fits among the four tip credit classes.

04Wages

Minimum wage and the tip credit in South Dakota

In South Dakota employers can pay tipped staff $5.925 an hour and count up to $5.925 in tips toward the $11.85 minimum. If tips fall short, the employer makes up the difference.[1]

Worked example

One server, one slow 30-hour week in South Dakota

Minimum for the week: 30 × $11.85$355.50
Cash wage you pay: 30 × $5.925$177.75
Tips have to cover: 30 × $5.925$177.75
Tips actually earned$120.00
You top up the gap$57.75
Cash wageTips countedYour top-up

A busy week with $177.75 or more in tips needs no top-up. Every tip above that is the server's. Fictional worker and tips.

Tip credit conditions
At least half the minimum in cash ($5.925). Cash plus tips must reach $11.85; the employer fills gaps each pay period. Federal rules apply too.[3]
Who counts as tipped
More than $35 per month in tips or other considerations, customarily and regularly received in the occupation.[5]
Overtime
Federal overtime: 1.5 times the regular rate after 40 hours a week. It isn't figured on the tipped cash wage, and the credit doesn't grow.[4]
Side work and dual jobs
The federal dual-jobs rule applies: no credit for time in a separate non-tipped job. No South Dakota side-work limit was found.[6][7]

Other rates

Other minimum wage rates in South Dakota
RateHourly
Youth or training Opportunity wageNew hires under 20 during the first 90 consecutive calendar days; do not displace existing employees.[5]$4.25

Scheduled increases

  1. Now, since $11.85

Indexed wages

Tipped cash is half the minimum, and the minimum moves every year

South Dakota adjusts its minimum wage each year and sets tipped cash at no less than 50% of it. When one number moves, so does the other.[3][1][2]

South Dakota minimum and tipped cash wages[1][2]
EffectiveMinimum wageTipped cash floor
January 1, 2026$11.85$5.925 (federal table: $5.93)
January 1, 2027$12.30$6.15

05Local rates

City and county minimum wages in South Dakota

No city or county minimum wages above the $11.85 state rate are on file for South Dakota.[3]

No state rule[3]

06Tip pool

Who can be in the tip pool in South Dakota

South Dakota allows tip pools, and employers can make them mandatory. 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.

Who can share in a tip pool in South Dakota, by role
RoleCan share?Condition
Front of house
ServerAllowedFine in a pool for customarily tipped jobs. Non-tipped roles need the full cash minimum with no tip credit. Managers are out.[4]
BartenderAllowedFine in a pool for customarily tipped jobs. Non-tipped roles need the full cash minimum with no tip credit. Managers are out.[4]
BusserAllowedFine in a pool for customarily tipped jobs. Non-tipped roles need the full cash minimum with no tip credit. Managers are out.[4]
Food runnerDependsFine in a pool for customarily tipped jobs. Non-tipped roles need the full cash minimum with no tip credit. Managers are out.[4]
HostDependsFine in a pool for customarily tipped jobs. Non-tipped roles need the full cash minimum with no tip credit. Managers are out.[4]
BarbackDependsFine in a pool for customarily tipped jobs. Non-tipped roles need the full cash minimum with no tip credit. Managers are out.[4]
ExpoDependsFine in a pool for customarily tipped jobs. Non-tipped roles need the full cash minimum with no tip credit. Managers are out.[4]
Back of house
CookDependsOnly with no tip credit and the full federal minimum in cash. South Dakota's full minimum still applies on its own. No manager shares.[4]
DishwasherDependsOnly with no tip credit and the full federal minimum in cash. South Dakota's full minimum still applies on its own. No manager shares.[4]
Leadership
Shift leadDependsFine in a pool for customarily tipped jobs. Non-tipped roles need the full cash minimum with no tip credit. Managers are out.[4]
Manager or supervisorNot allowedNo share of employee pool tips. Real duties and ownership decide who counts, not the job title.[4]
OwnerNot allowedNo share of employee pool tips. Real duties and ownership decide who counts, not the job title.[4]
Managers and supervisors
Managers and supervisors who meet the duties test can't take employee tips or pool shares. They keep only tips from service they alone provide.[4]
Owners
Owners with a real 20% stake who help run the place count as managers here. No employer can keep employees' tips.[4]
Back of house
Cooks and dishwashers can join a pool only with no tip credit and full cash minimum. Paying the full state minimum avoids leaning on tips.[4]
Who sets the percentages
The employer can set a valid mandatory pool. In a traditional pool, tipped workers have to be told the required contribution amounts.[4]
Cap on what a pool can take
No federal cap on a valid mandatory pool. Eligibility, notice and minimum wage rules still apply.[4]
Pooling allowed
Yes. Federal rules cover restaurant pools. No separate South Dakota pooling rule was found.[4]

07Put it to work

Setting up a tip pool in South Dakota

Under South Dakota 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.

The law decides who's in. You still have to run the split every shift and pay it out. That part is a math and payout job, and it's the same job whether you have one location or forty.
Saturday dinner pool$1,200.00
6 of 10 staff can share in South Dakota
By %
By points
By hours
Servers 67.1%Bar 14.6%Support 18.3%
The same $1,200.00 pool split three ways, using roles that can share in South Dakota
WhoBy %By pointsBy hours
MayaServer, 6 h, 10 pts$268.29$250.00$211.78
JordanServer, 6 h, 10 pts$268.29$250.00$211.76
PriyaServer, 6 h, 10 pts$268.29$250.00$211.76
SamBartender, 6 h, 8 pts$175.61$200.00$211.76
LuisBusser, 5 h, 5 pts$109.76$125.00$176.47
AvaFood runner, 5 h, 5 pts$109.76$125.00$176.47
TheoCook, 7 hNot in the pool. Out here: this pool includes servers paid with a tip credit.
KimCook, 7 hNot in the pool. Out here: this pool includes servers paid with a tip credit.
RafaDishwasher, 6 hNot in the pool. Out here: this pool includes servers paid with a tip credit.
DanaManager or supervisor, 2 h (ran food)Not in the pool. No share of employee pool tips.
Total$1,200.00$1,200.00$1,200.00

Fictional restaurant and staff. The guest-facing staff here are assumed to meet South Dakota'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.

Support Pool contributors: Server $262.83 and Bartender $54.92, for a total of $317.75. Support Pool receivers, pooled by Day and distributed by Hours Worked: Jonah Kim, Busser, 6.50 hours, +$179.56. Sofia Nunez, Food Runner, 5.00 hours, +$138.19. Total 11.50 hours and $317.75.

Support pool split. Servers and bartenders pay into the support pool, split by hours worked.
Ferry Tip Manager

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

Book a demoSee Tip Manager
Run your own numbersPlug your staff and tips into the tip pooling calculator

08Service charges

Service charges vs tips in South Dakota

South Dakota law doesn't say who a mandatory service charge belongs to, but it does set rules for how the charge is shown to guests. Under federal law a mandatory service charge is not a tip, and any part paid to staff counts as wages.

Tips compared with service charges in South Dakota
QuestionOptionalTipMandatoryService charge
Who sets the amountThe guestThe business
Who it belongs toThe worker it was left for, or the poolRequired service charges aren't tips under federal law. What reaches staff counts as wages, including for overtime. Contracts and other law can decide ownership.[4]
Can it go to staff?Yes, through the poolYes. Amounts paid to staff are wages, not tips.[4]
How it's taxed (federal)Tip income the worker reportsRegular wages, with payroll taxes[10][11]
Guest noticeNone neededSDCL 37-24-6(1) prohibits knowing deceptive practices and material concealment/omission in sale or advertising of merchandise, which includes services. Restaurant fee disclosure depends on materiality/context; no statewide prescribed menu font/wording identified.[8][9]
  1. 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.
  2. Step 2What does South Dakota say?Federal ruleRequired service charges aren't tips under federal law. What reaches staff counts as wages, including for overtime. Contracts and other law can decide ownership.[4]
  3. Step 3Check the cityNo city service charge rules on file for South Dakota.
Menu and receipt notice
SDCL 37-24-6(1) prohibits knowing deceptive practices and material concealment/omission in sale or advertising of merchandise, which includes services. Restaurant fee disclosure depends on materiality/context; no statewide prescribed menu font/wording identified.[8][9]
Large-party auto gratuities
A mandatory auto-gratuity is a service charge for tax purposes, even if staff get it. Calling it a tip doesn't make it one.[10][11]

Local service charge rules

No local service charge rules on file for South Dakota.

More on the difference: service charge vs tip.

09Card tips

Card tips in South Dakota: fees and payout timing

In South Dakota only the tip's share of the card processing fee can come out of a card tip, under federal rules. Payout deadline under the federal rule: card and pooled tips are due by regular payday, with a narrow pool exception. Tip-credit shortfalls are made up each pay period.

Card processing fees
Pro rata (federal)Only the tip's share.

No South Dakota card-fee rule was found. For federally covered employers, only the tip's share of the actual fee, never below required wages.[4]

When card tips have to land

  1. TonightGuest adds a tip On the card, at the table.
  2. CloseShift is tallied The pool is split by your rules.
  3. DeadlineSouth Dakota rule Federal rules: card and pooled tips are due by regular payday, with a narrow pool exception. Tip-credit shortfalls are made up each pay period.[4][3]
  4. Last dayFinal pay Usually due on the next regular payday after quitting or firing. Pay can wait for employer property to come back; federal payday duties still apply.[3]

Paydays: At least once a month, or on regular paydays set in advance.[3]

Paying tips on a payroll card

  • Allowed?DependsPaying another way needs employer and employee agreement, and federal rules protect choice. No blanket card approval is implied.[3]
  • Worker consent needed?Yes
  • Free way to get the money?Federal ruleNo state rule. Federal rule applies: no general federal free cash-withdrawal mandate identified; Regulation E requires fee disclosures. State law may require free access.[12][3]
  • Must you offer another option?Yes
  • Holding cash tipsState ruleThe employer can collect cash tips to run a valid pool, then pay them out by regular payday. Nothing broader is allowed.[4]
  • 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.[14][3]

Alice Anderson, Server, Downtown. Direct tips +$980.25, indirect tips +$0.00, tip outs -$147.07, tips payable $833.18. Tip Payment history, all Automatic with status Success: 2026-10-29 $833.18, 2026-10-28 $783.19, 2026-10-27 $733.20.

Employee tip payout. Each person's direct tips, tip outs, and payable amount, then paid automatically.
Ferry Pay and Pay Card

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

Book a demoSee Ferry PayAbout the Pay Card
Customer story: BJ's Restaurants
200+locations across 30 states run Tip Manager and Ferry Pay
66%+reduction in cash-carrying costs
“Since launching this card program, we've reduced our cash-carrying costs by over 66 percent”
Jake Guild, Senior Vice President & Chief Accounting Officer, BJ's Restaurants
Read the BJ's case study

10Records

Records and notices in South Dakota

Keep each tipped worker's tips and hours on record, shift by shift. Federal law: payroll records 3 years, wage-math records 2 years.

South Dakota State

  • Tip records The state requires records of all tips and proof that cash plus tips reach the minimum. Federal payroll and tip records also apply.[1][3]
  • How long to keep them Federal: payroll records 3 years, wage-math records 2 years. No state tip-record period was found.[15][3]
  • Tip credit notice Required. Tell workers first: cash wage, credit amount, credit capped at actual tips, tips stay theirs outside a valid pool, and any pool contribution amounts.[4]
  • Posters and forms FLSA minimum wage poster.[15]

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.[4]
  • How long to keep them FLSA: payroll records at least three years; underlying wage-computation records two years. Tax retention is separate.[15]
  • 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.[4]
  • 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.
For workers

Think your tips were handled wrong in South Dakota?

Workers in South Dakota can file a tip or wage claim with the South Dakota Department of Labor and Regulation, Division of Labor and Management (605-773-3681). Filing is free, and this page can't settle a dispute; the state can.[16]

South Dakota Department of Labor and Regulation, Division of Labor and Management
Phone
605-773-3681[16]
Website
dlr.sd.gov/employment_laws
How to file a claim

Retaliation: Employers cannot discharge, discriminate or threaten reprisals because an employee makes a wage complaint, starts wage proceedings or testifies.[3]

Penalties: Workers can recover unpaid minimum wages and costs. Oppressive or malicious refusal to pay can mean double damages; some violations are Class 2 misdemeanors.[3]

Can they take this out of my tips?

  • Walkouts and dine-and-dashNot allowedEmployee tips cannot reimburse employer losses. Separate wage-deduction rules may also apply.[4]
  • BreakageNot allowedEmployee tips cannot reimburse employer losses. Separate wage-deduction rules may also apply.[4]
  • Register shortagesNot allowedEmployee tips cannot reimburse employer losses. Separate wage-deduction rules may also apply.[4]
  • UniformsNot allowedEmployee tips cannot pay employer uniform costs. Separate wage-deduction rules may also apply.[4]
  • Card processing feesAllowedOnly the tip's share of the actual card fee, and never enough to drop pay below required wages.[4]
  • A manager's shareNot allowedEmployers, managers and supervisors cannot receive employee tip-pool shares.[4]

11Law changes

What changed in South Dakota tip law, and what's coming

Next scheduled change: the South Dakota minimum wage goes to $12.30 on . Most recent change: The general minimum became $11.85; the agency’s exact tipped cash floor is $5.925 ().

  1. ComingMinimum wage goes to $12.30 (General statewide minimum wage).[1]
  2. ChangedThe general minimum became $11.85; the agency’s exact tipped cash floor is $5.925.[1]

Bills and ballot measures

Nothing pending as of .

Key statutes

  • SDCL 60-11-3.1
  • SDCL 60-11-3.2
  • SDCL 60-11-7
  • SDCL 60-11-9
  • SDCL 60-11-10
  • SDCL 60-11-11
  • SDCL 60-11-17.1
  • ARSD 47:04:01:01

12FAQ

South Dakota tip law questions

Plain answers to the 8 questions restaurant owners and staff ask most about South Dakota tip law, each linked to its source.

What is South Dakota's tipped minimum wage?

$5.925 an hour in cash for 2026, half the $11.85 minimum, with tips covering the rest. Federal tables round it to $5.93.[1][2]

What changes in 2027?

On January 1, 2027, the minimum wage rises to $12.30 and the tipped cash floor to $6.15.[1]

Who counts as a tipped employee?

Someone in a job that customarily and regularly brings in more than $35 a month in tips.[5]

Who covers a slow tip week?

The employer. If cash plus tips falls short of the minimum for the regular pay period, the employer makes up the difference.[3][5]

Can managers take tip-pool money?

No. Federal law bars managers and supervisors from pooled tips, even when the employer takes no tip credit.[4]

When is a final paycheck due?

Usually the next regular payday. State law lets the employer hold it until company property comes back, but federal wage duties still apply.[3]

Is there a training wage?

New hires under 20 can be paid $4.25 for their first 90 consecutive calendar days. Existing workers can't be pushed out to use it.[5]

Where can a worker report unpaid wages?

Use the Claim of Unpaid Wages form from South Dakota DLR, or call 605-773-3681 with wage questions.[16]

13Compare

How South Dakota compares with nearby states

South Dakota borders Iowa, Minnesota, Montana, Nebraska, North Dakota and Wyoming. Nebraska pays a higher minimum wage than South Dakota's $11.85. 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 South Dakota: Tip credit, cash wage above federal.

Compare all states in one table

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 South Dakota setup.

Book a demoTry the tip pooling calculator

14Sources

Sources for South Dakota tip laws

Every figure on this page links to one of these 16 sources: 12 for South Dakota and 4 for the federal baseline. They are statutes, regulations and government agency pages, each with the date it was checked.

  1. 1South Dakota Minimum WageSouth Dakota Department of Labor and Regulation · Official source · Checked Pinpoint: Tip Credit (Tipped Employees); Non-tipped Employeesdlr.sd.gov/employment_laws/minimum_wage.aspx
    What the source says

    “The minimum wage for tipped employees in South Dakota is $5.925 /hour .”

    “The minimum wage for non-tipped employees in South Dakota is $11.85/hour .”

    “(Effective Jan. 1, 2026.)”

  2. 2Minimum Wages for Tipped EmployeesU.S. Department of Labor · Official source · Page updated · Checked Pinpoint: state source controlswww.dol.gov/agencies/whd/state/minimum-wage/tipped
    What the source says

    “South Dakota $11.85 50% of the applicable minimum wage ($5.92) $5.93 More than $35”

  3. 3South Dakota Codified Laws, Title 60: Labor and EmploymentSouth Dakota Legislature · Official source · Checked Pinpoint: SDCL 60-11-3.1; SDCL 60-11-3sdlegislature.gov/api/Statutes/60.html?all=true
    What the source says

    “a cash wage of not less than fifty percent of the minimum wage provided by § 60-11-3”

    “Any employer of a tipped employee shall pay a cash wage of not less than fifty percent of the minimum wage provided by § 60-11-3 if the employer claims a tip credit against the employer's minimum wage obligation.”

    “Every employer shall pay to each employee wages at a rate of not less than eight dollars and fifty cents an hour.”

  4. 4Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act (FLSA)U.S. Department of Labor · Official source · Checked Pinpoint: Tip pooling, paragraph 1; Traditional Tip Pooling, paragraph 1; Other Tip Pooling, paragraph 1www.dol.gov/agencies/whd/fact-sheets/15-tipped-employees-flsa
    What the source says

    “The FLSA allows employers to require employees to share or “pool” tips with other eligible employees.”

    “An employer that takes a tip credit can require tipped employees to contribute tips only to a tip pool which is limited to employees in occupations in which they customarily and regularly receive tips, such as waiters, bellhops, counter personnel (who serve customers), bussers, and service bartenders.”

    “When an employer pays its employees a cash wage of at least the federal minimum wage (currently $7.25) per hour, the employer may impose a mandatory tip pooling arrangement that includes employees who are not employed in an occupation in which employees customarily and regularly receive tips.”

  5. 5Frequently Asked Questions About Minimum WageSouth Dakota Department of Labor and Regulation · Official source · Checked Pinpoint: Who is a tipped employee?; Does South Dakota have a training wage?dlr.sd.gov/employment_laws/minimum_wage_faq.aspx
    What the source says

    “A tipped employee is one engaged in an occupation in which the employee customarily and regularly receives more than $35 a month in tips or other considerations.”

    “employers may pay newly hired employees under the age of 20 years old no less than $4.25 an hour during the first 90 consecutive calendar days after that person is first employed.”

  6. 6Tip Regulations under the Fair Labor Standards Act (FLSA)U.S. Department of Labor · Official source · Checked Pinpoint: Regulatory History 2020-2024, item 3www.dol.gov/agencies/whd/flsa/tips
    What the source says

    “a federal court vacated the revision, with the effect of reinstating the Department’s original dual jobs regulation.”

  7. 7Field Assistance Bulletin 2026-1U.S. Department of Labor · Official source · Page updated · Checked Pinpoint: p. 1, introductory paragraphswww.dol.gov/sites/dolgov/files/WHD/fab/fab2026-1.pdf
    What the source says

    “These withdrawn opinion letters and the FOH provision that implemented them should no longer be relied upon as WHD enforcement guidance.”

  8. 8SDCL 37-24-6, Deceptive act or practiceSouth Dakota Legislature · Official source · Checked Pinpoint: 37-24-6(1), knowing deception/material-omission; services defined 37-24-1(7)sdlegislature.gov/api/Statutes/37-24-6.html?all=true
    What the source says

    “to conceal, suppress, or omit any material fact in connection with the sale or advertisement of any merchandise”

  9. 9SDCL 37-24-1, DefinitionsSouth Dakota Legislature · Official source · Checked Pinpoint: 37-24-1(7), services within general consumer statutesdlegislature.gov/api/Statutes/37-24-1.html?all=true
    What the source says

    “"Merchandise," any object, wares, goods, commodity, intangible, instruction, or service;”

  10. 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.”

  11. 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”

  12. 12Are there fees to use a payroll card?Consumer Financial Protection Bureau · Official source · Page updated · Checked www.consumerfinance.gov/ask-cfpb/are-there-fees-to-use-a-payroll-card-en-403
    What the source says

    “Many state laws require that you’re able to access or withdraw your money for free, so check your state’s laws.”

  13. 13What is a payroll card?Consumer Financial Protection Bureau · Official source · Page updated · Checked Pinpoint: paragraph following definitionwww.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.”

  14. 14Questions 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.”

  15. 15Fact 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

    “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).”

    “Each employer shall preserve for at least three years payroll records, collective bargaining agreements, sales and purchase records.”

    “Records on which wage computations are based should be retained for two years,”

  16. 16Wage and Hour Issues: Claim of Unpaid WagesSouth Dakota Department of Labor and Regulation · Official source · Checked Pinpoint: Contact Usdlr.sd.gov/employment_laws/wage_hour_issues.aspx
    What the source says

    “South Dakota Department of Labor and Regulation Division of Labor and Management”

    “South Dakota Department of Labor and Regulation”

    “Phone: 605.773.3681”

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. 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. 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. 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. 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

  1. 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.