Texas tip laws (2026)
Texas matches federal law: $2.13 an hour in cash, up to a $5.12 tip credit, and $7.25 once tips are counted. Cities can't set a higher minimum wage for private jobs. Mandatory tip pools are fine as long as managers stay out.
Texas at a glance
Tip credit allowedTexas: $7.25 an hour minimum wage. Tipped staff can be paid $2.13 cash, with up to $5.12 counted from tips.
| State minimum wage | $7.25/hr | Statewide from .[1][2] |
|---|---|---|
| Tipped cash wage | $2.13 | Plus up to $5.12 in tips = $7.25.[3] |
| Max tip credit | $5.12 | Counted from tips.[3] |
| Tip pooling | Allowed | Mandatory pools allowed.[2][4] |
| Card-fee deduction | Depends | Federal rule: only the actual proportional fee. Any wage deduction must also have a lawful purpose and authorization under Texas law.[2][5][6] |
| Card tip payout | Card tips are due by payday, even before the processor pays. | Pools pay out by payday, or soon after if totals aren't ready.[2] |
| Local minimum wages | None | State law blocks local rates.[1] |
Rates verified against the Texas Workforce Commission on . Rates as of . Tipped totals are worked out from the rates above. Download this data (CSV)
Who's covered
Texas has two tracks, and most restaurants are on the federal one
Texas's minimum wage chapter excludes workers the FLSA already covers. Both tracks land on the same $7.25 and $2.13, but the tip threshold differs.[1][2]
FLSA-covered jobs
- $7.25 minimum, $2.13 cash wage
- Tipped means more than $30 a month in tips
- Federal remedies and complaint process
Jobs covered only by Texas law
- The federal minimum wage, by state statute
- Tipped means more than $20 a month in tips
- Unpaid wages plus an equal amount, two years to sue
02The yes/no sheet
Can you do this in Texas?
In Texas you can take a tip credit of up to $5.12 an hour and can require staff to join a tip pool. 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 $2.13 cash and count up to $5.12 in tips. Tips must cover the gap.[1][3] |
| 02 | Make staff join a tip pool? | Yes | Employers can require pools among eligible workers, with notice and limits on the tips actually kept.[2] |
| 03 | Include bartenders, bussers, runners and hosts? | Depends | Bartenders and bussers can share. Food runner and host: traditional pools are for jobs that usually get tips. Non-tipped roles need full minimum wage with no tip credit. No managers.[2] |
| 04 | Include cooks and dishwashers? | Depends | Cooks and dishwashers can join a mandatory pool only if everyone gets at least $7.25 in cash and no tip credit is taken.[2] |
| 05 | Give managers or supervisors a share? | No | Managers and supervisors can't keep workers' tips or take pool shares. They keep only tips for service they alone provide. No salary test applies.[2] |
| 06 | Let an owner keep any of the tips? | No | An owner with 20% or more equity who actively manages counts as a manager. No employer may keep workers' tips.[2] |
| 07 | Pick your own split (hours, points or percentages)? | Depends | No federal cap on pool percentages. Eligibility, notice and minimum wage rules still apply.[2] |
| 08 | Take card processing fees out of tips? | Depends | Federal rule: only the actual proportional fee. Any wage deduction must also have a lawful purpose and authorization under Texas law.[2][5][6] |
| 09 | Hold card tips until payday? | Deadline | Card tips are due by payday, even before the processor pays. Pools pay out by payday, or soon after if totals aren't ready.[2] |
| 10 | Cover walkouts, breakage or register shortages from tips? | No | Not from tips.[2][5][6] |
| 11 | Keep a mandatory service charge for the house? | Federal rule | A mandatory service charge isn't a tip. Paid to staff, it's wages and counts for overtime. Who owns it is a contract and state-law question.[2][7] |
| 12 | Pay tips on a payroll card? | Yes | The card must link to a federally insured bank. Give written notice, all fees and an opt-out form first. Offer another way to get paid too.[5][8] |
03State vs federal
Texas vs federal law
Texas follows the federal baseline on the rules below: $7.25 minimum wage, $2.13 tipped cash wage and up to $5.12 in tip credit.
| Rule | Federal (FLSA) | Texas | Comparison |
|---|---|---|---|
| Minimum wageSame as federal | Federal$7.25[2] | Texas$7.25[1][2] | Same as federal |
| Tipped cash wageSame as federal | Federal$2.13[2] | Texas$2.13[3][1] | Same as federal |
| Max tip creditSame as federal | Federal$5.12[2] | Texas$5.12[3] | Same as federal |
| Who counts as tippedState rule | FederalMore than $30 a month in tips, customarily and regularly received in the occupation.[2] | TexasFLSA-covered jobs: more than $30 a month in tips. Jobs covered only by Texas law: more than $20 a month.[1][2] | State rule |
| Managers in the poolState rule | 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.[2] | TexasManagers and supervisors can't keep workers' tips or take pool shares. They keep only tips for service they alone provide. No salary test applies.[2] | State rule |
| 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.[2] | TexasCooks and dishwashers can join a mandatory pool only if everyone gets at least $7.25 in cash and no tip credit is taken.[2] | State rule |
| Card fees from tipsState rule | 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.[2] | TexasDepends. Federal rule: only the actual proportional fee. Any wage deduction must also have a lawful purpose and authorization under Texas law.[2][5][6] | State rule |
| 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.[2] | TexasCard tips are due by payday, even before the processor pays. Pools pay out by payday, or soon after if totals aren't ready.[2] | 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.[2] | TexasA mandatory service charge isn't a tip. Paid to staff, it's wages and counts for overtime. Who owns it is a contract and state-law question.[2][7] | 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.[2] | TexasOvertime starts after 40 hours a week, figured from at least $7.25, not $2.13. The tip credit stays the same. Paid-out service charges count.[2] | State rule |
Every state starts from the same federal floor. Federal tip law baseline: the FLSA rules, rates and sources, and how Texas fits among the four tip credit classes.
04Wages
Minimum wage and the tip credit in Texas
In Texas employers can pay tipped staff $2.13 an hour and count up to $5.12 in tips toward the $7.25 minimum. If tips fall short, the employer makes up the difference.[1][3]
One server, one slow 30-hour week in Texas
A busy week with $153.60 or more in tips needs no top-up. Every tip above that is the server's. Fictional worker and tips.
- Tip credit conditions
- Texas borrows the federal tip-credit rules. Give notice, let workers keep their tips, and make sure cash wage plus tips reach minimum wage.[1][2]
- Who counts as tipped
- FLSA-covered jobs: more than $30 a month in tips. Jobs covered only by Texas law: more than $20 a month.[1][2]
- Overtime
- Overtime starts after 40 hours a week, figured from at least $7.25, not $2.13. The tip credit stays the same. Paid-out service charges count.[2]
Other rates
| Rate | Hourly |
|---|---|
| Youth or training Federal youth opportunity wageUnder 20, first 90 consecutive calendar days after initial employment; nondisplacement limits apply.[11] | $4.25 |
Scheduled increases
No statewide increase with a published amount is on file as of .
06Tip pool
Who can be in the tip pool in Texas
Texas 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.
| Role | Can share? | Condition |
|---|---|---|
| Front of house | ||
| Server | Allowed | Traditional pools are for jobs that usually get tips. Non-tipped roles need full minimum wage with no tip credit. No managers.[2] |
| Bartender | Allowed | Traditional pools are for jobs that usually get tips. Non-tipped roles need full minimum wage with no tip credit. No managers.[2] |
| Busser | Allowed | Traditional pools are for jobs that usually get tips. Non-tipped roles need full minimum wage with no tip credit. No managers.[2] |
| Food runner | Depends | Traditional pools are for jobs that usually get tips. Non-tipped roles need full minimum wage with no tip credit. No managers.[2] |
| Host | Depends | Traditional pools are for jobs that usually get tips. Non-tipped roles need full minimum wage with no tip credit. No managers.[2] |
| Barback | Depends | Traditional pools are for jobs that usually get tips. Non-tipped roles need full minimum wage with no tip credit. No managers.[2] |
| Expo | Depends | Traditional pools are for jobs that usually get tips. Non-tipped roles need full minimum wage with no tip credit. No managers.[2] |
| Back of house | ||
| Cook | Depends | Only in a pool where everyone gets at least $7.25 in cash and no tip credit is taken. No managers.[2] |
| Dishwasher | Depends | Only in a pool where everyone gets at least $7.25 in cash and no tip credit is taken. No managers.[2] |
| Leadership | ||
| Shift lead | Depends | Actual duties decide. A shift lead who qualifies as a manager can't share pooled tips; others follow the usual job and cash-wage rules.[2] |
| Manager or supervisor | Not allowed | Can't take pooled tips. Actual duties and ownership decide, not job titles.[2] |
| Owner | Not allowed | Can't take pooled tips. Actual duties and ownership decide, not job titles.[2] |
- Managers and supervisors
- Managers and supervisors can't keep workers' tips or take pool shares. They keep only tips for service they alone provide. No salary test applies.[2]
- Owners
- An owner with 20% or more equity who actively manages counts as a manager. No employer may keep workers' tips.[2]
- Back of house
- Cooks and dishwashers can join a mandatory pool only if everyone gets at least $7.25 in cash and no tip credit is taken.[2]
- Who sets the percentages
- The employer can set a mandatory pool. With a tip credit, it must tell workers how much they have to contribute.[2]
- Cap on what a pool can take
- No federal cap on pool percentages. Eligibility, notice and minimum wage rules still apply.[2]
07Put it to work
Setting up a tip pool in Texas
Under Texas 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. Can't take 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 Texas'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 Texas
Texas 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.
| 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 | A mandatory service charge isn't a tip. Paid to staff, it's wages and counts for overtime. Who owns it is a contract and state-law question.[2][7] |
| Can it go to staff? | Yes, through the pool | Yes. Amounts paid to staff are wages, not tips.[2] |
| How it's taxed (federal) | Tip income the worker reports | Regular wages, with payroll taxes[12][13] |
| Guest notice | None needed | For the sales-tax exemption only: label mandatory gratuities of 20% or less clearly on the bill and pay them only to regular service staff.[7] |
- 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 Texas say?Federal ruleA mandatory service charge isn't a tip. Paid to staff, it's wages and counts for overtime. Who owns it is a contract and state-law question.[2][7]
- Step 3Check the cityNo city service charge rules on file for Texas.
- Menu and receipt notice
- For the sales-tax exemption only: label mandatory gratuities of 20% or less clearly on the bill and pay them only to regular service staff.[7]
- Large-party auto gratuities
- For federal tax purposes, an automatic gratuity is a service charge, not a tip, even when staff get it. The label doesn't change that.[12][13]
Local service charge rules
No local service charge rules on file for Texas.
More on the difference: service charge vs tip.
09Card tips
Card tips in Texas: fees and payout timing
In Texas whether card fees can come out of tips depends on the conditions below. Payout deadline: card tips are due by payday, even before the processor pays. Pools pay out by payday, or soon after if totals aren't ready.
It depends. Federal rule: only the actual proportional fee. Any wage deduction must also have a lawful purpose and authorization under Texas law.[2][5][6]
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.
- DeadlineTexas rule Card tips are due by payday, even before the processor pays. Pools pay out by payday, or soon after if totals aren't ready.[2]
- Last dayFinal pay Fired: paid in full by the sixth day after discharge. Quit or left any other way: by the next regular payday.[5]
Paydays: Overtime-exempt workers: at least monthly. Everyone else: at least twice a month, in roughly equal periods. Paydays must be posted.[5]
Paying tips on a payroll card
- Allowed?YesThe card must link to a federally insured bank. Give written notice, all fees and an opt-out form first.[5]
- Worker consent needed?DependsTexas uses notice and opt-out, not sign-up consent. Federal rules separately bar forcing workers onto the employer's card.[5][8]
- Free way to get the money?State ruleNo Texas law sets a free-withdrawal minimum. The state labor agency suggests at least one free cash withdrawal per pay period.[14]
- Must you offer another option?YesAfter an opt-out request, switch as soon as practical, and no later than the first payday after 30 days.[5]
- Holding cash tipsState ruleThe employer can collect tips to run a valid pool, then pay them out by payday. No broader right to hold cash tips was found.[2]
- Tips shown on the pay stubDependsWorkers covered only by Texas law get statements with pay, hours and deductions. No separate pool line is required.[1]
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”
Payroll cards
Texas payroll cards come with an opt-out
Texas lets employers pay through a payroll card, but workers can ask for another way to get paid.[5][8][14]
- 1Use a card linked to a federally insured bank.
- 2Give advance written notice that lists every fee.
- 3Include an opt-out form for another payment method.
- 4After an opt-out, switch as soon as practical, and no later than the first payday after 30 days.
10Records
Records and notices in Texas
Keep each tipped worker's tips and hours on record, shift by shift. Texas: payroll records: three years.
Texas State
- Tip records Keep identity, hours and pay records, plus tip and tip-credit records. Workers covered only by Texas law also get earnings statements showing deductions.[2][1][15]
- How long to keep them Payroll records: three years. Wage-calculation records: two years. Tax records follow separate rules.[15]
- Tip credit notice Required. Tell workers the cash wage, the credit amount, that credit can't exceed tips, and that tips are theirs. Pool contributions too.[2]
- Posters and forms Conspicuous workplace payday notices; Federal tip-credit notice and eligible pool contribution notice.[5][2]
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.[2]
- 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.[2]
- 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 Texas?
Workers in Texas can file a tip or wage claim with the Texas Workforce Commission (800-832-9243). Filing is free, and this page can't settle a dispute; the state can.[5]
Retaliation: Federal law bars punishing workers for wage complaints, spoken or written, even outside FLSA wage coverage. Reinstatement, lost wages and damages may follow.[17]
Penalties: State-only claims: unpaid wages plus an equal amount, within two years, plus fees. Bad-faith nonpayment: penalty up to the lesser of the wages or $1,000.[1][5]
Can they take this out of my tips?
- Walkouts and dine-and-dashNot allowedTips can't cover the employer's costs. Wage deductions need legal authorization and can't break minimum wage or overtime rules.[2][5]
- BreakageNot allowedTips can't cover the employer's costs. Wage deductions need legal authorization and can't break minimum wage or overtime rules.[2][5]
- Register shortagesNot allowedTips can't cover the employer's costs. Wage deductions need legal authorization and can't break minimum wage or overtime rules.[2][5]
- UniformsNot allowedTips can't cover the employer's costs. Wage deductions need legal authorization and can't break minimum wage or overtime rules.[2][5]
- A manager's shareNot allowedEmployers, managers and supervisors can't take pool shares.[2]
11Law changes
What changed in Texas tip law, and what's coming
No statewide increase with a published amount is on file for Texas as of .
No changes to Texas tip or wage rules on file for the last 24 months.
Key statutes
- Texas Labor Code 62.051, 62.052 and 62.151: minimum wage, tips and federal-coverage exclusion
- Texas Labor Code 62.0515: local minimum-wage preemption and exceptions
- Texas Labor Code 61.011–61.018: wages, final pay, cards and deductions
- Texas Labor Code 61.051, 61.053 and 62.201–62.205: claims and remedies
Not covered here? Ask the Texas Workforce Commission at 800-832-9243 or on twc.texas.gov.
12FAQ
Texas tip law questions
Plain answers to the 8 questions restaurant owners and staff ask most about Texas tip law, each linked to its source.
What is the tipped minimum wage in Texas?
Can a Texas city set a higher minimum wage?
Not for private jobs. Texas law overrides local wage ordinances for private employment. Public contracts and job-training programs are exceptions.[1]
Can a restaurant require tip pooling?
Yes, among eligible workers. Managers and supervisors can't take a share. If cooks or dishwashers join, everyone needs at least $7.25 in cash and no tip credit.[2]
Does Texas cap tip-outs at 15%?
Can a restaurant take card fees out of tips?
When is a final paycheck due?
By the sixth day after a firing. Anyone who quits or leaves another way gets paid by the next regular payday.[5]
Can an employer require a payroll card?
How long does a worker have to file a wage claim?
180 days after the wages were due, with the Texas Workforce Commission. Lawsuits can have different deadlines.[5]
13Compare
How Texas compares with nearby states
Texas borders Arkansas, Louisiana, New Mexico and Oklahoma. Arkansas and New Mexico pay a higher minimum wage than Texas's $7.25. 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 Texas: Tip credit, federal cash wage.
- Indiana tip laws$7.25 min wage $2.13 tipped cash wage Also a $2.13 tipped cash wage
- Kansas tip laws$7.25 min wage $2.13 tipped cash wage Also a $2.13 tipped cash wage
- Kentucky tip laws$7.25 min wage $2.13 tipped cash wage Also a $2.13 tipped cash wage
- Nebraska tip laws$15.00 min wage $2.13 tipped cash wage Also a $2.13 tipped cash wage
- North Carolina tip laws$7.25 min wage $2.13 tipped cash wage Also a $2.13 tipped cash wage
- Utah tip laws$7.25 min wage $2.13 tipped cash wage Also a $2.13 tipped cash wage
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 Texas setup.
14Sources
Sources for Texas tip laws
Every figure on this page links to one of these 17 sources: 15 for Texas and 2 for the federal baseline. They are statutes, regulations and government agency pages, each with the date it was checked.
- 1LABOR CODE CHAPTER 62. MINIMUM WAGETexas Legislature · Official source · Checked Pinpoint: 62.052(a); Labor Code 62.051; 62.052(b)tcss.legis.texas.gov/resources/LA/htm/LA.62.htm
What the source says
“the amount paid the employee by the employer is the amount described as paid to a tipped employee under Section 3(m), Fair Labor Standards Act of 1938 (29 U.S.C.”
“an employer shall pay to each employee the federal minimum wage under Section 6, Fair Labor Standards Act of 1938 (29 U.S.C.”
“customarily and regularly receives more than $20 a month in tips.”
- 2Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act (FLSA)U.S. Department of Labor · Official source · Checked Pinpoint: Tip Credit, paragraph 2; Tip Credit, paragraph 3; opening paragraphwww.dol.gov/agencies/whd/fact-sheets/15-tipped-employees-flsa
What the source says
“the federal minimum wage, which is currently $7.25 per hour.”
“Employers claiming a tip credit must be able to show in each workweek that tipped employees receive at least the full federal minimum wage when direct (or cash) wages and the tip credit amount are combined.”
“a tipped employee is an employee engaged in an occupation in which they customarily and regularly receive more than $30 a month in tips.”
- 3Allowable Deductions Under the FLSATexas Workforce Commission · Official source · Checked Pinpoint: Allowable Deductions, tip-credit paragraph; dual-jobs discussionefte.twc.texas.gov/allowable_deductions.html
What the source says
“paying a tipped employee $2.13 per hour can be thought of as the end result of deducting the tip credit of $5.12 per hour from the required minimum wage of $7.25 per hour, the tip credit does not have to be authorized in writing by”
“which invalidated the "80/20/30" test.”
- 4Tip-Pooling / Tip-SharingTexas Workforce Commission · Official source · Checked Pinpoint: paragraph 2; Federal classification adopted in TWC guideefte.twc.texas.gov/tip_pooling.html
What the source says
“DOL regulation 29 C.F.R. § 531.54 sets out the requirements for a valid tip-pooling arrangement, including a prohibition against sharing of tips with managers, supervisors, or owners, distribution of tips no later than the regular payday for the workweek in question, limitation of the tip”
“Service charges or gratuities charged by an employer are not tips”
- 5LABOR CODE CHAPTER 61. PAYMENT OF WAGESTexas Legislature · Official source · Checked Pinpoint: 61.018(1)-(3); 61.011(b); 61.011(a)tcss.legis.texas.gov/resources/LA/htm/LA.61.htm
What the source says
“has written authorization from the employee to deduct part of the wages for a lawful purpose.”
“An employer shall pay wages to an employee other than an employee covered by Subsection (a) at least twice a month. (c) If wages are paid twice a month, each pay period must consist as nearly as possible of an equal number of days.”
“An employer shall pay wages to each employee who is exempt from the overtime pay provisions of the Fair Labor Standards Act of 1938 (29 U.S.C. Section 201 et seq.) at least once a month.”
- 6Adopted Texas Payday Rules; 821.28(e)Texas Workforce Commission · Official source · Page updated · Checked Pinpoint: 821.28(e), adopted rulewww.twc.texas.gov/sites/default/files/ogc/docs/fr-821-wg-pay-06-98-twc.pdf
What the source says
“The employer shall obtain written authorization as required under the Act to deduct credit card service charges from an employee's tips.”
- 7Restaurants and the Texas Sales Taxcomptroller.texas.gov · Official source · Page updated · Checked Pinpoint: conditional sales-tax exemptioncomptroller.texas.gov/taxes/publications/94-117.php
What the source says
“No tax is due on a mandatory gratuity of 20 percent or less, provided it is separately and clearly labeled “tip” or “gratuity” on the customer’s bill and distributed only to employees who regularly provide the service.”
- 8What 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 can’t require you to receive your wages on a payroll card.”
- 9Tip 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.”
- 10Field Assistance Bulletin No. 2026-1: Withdrawal of Opinion Letters and 80/20 Guidance on Related DutiesU.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.”
- 11Fact Sheet #32: Youth Minimum Wage - Fair Labor Standards ActU.S. Department of Labor · Official source · Checked Pinpoint: youth minimum wage discussion; Opening nondisplacementwww.dol.gov/agencies/whd/fact-sheets/32-minimum-wage-youth
What the source says
“$4.25 an hour to employees who are under 20 years of age during the first 90 consecutive calendar days after initial employment.”
“The law contains certain protections for employees that prohibit employers from displacing any employee in order to hire someone at the youth minimum wage.”
- 12Tip 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.”
- 13Revenue 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”
- 14Electronic Fund Transfer of WagesTexas Workforce Commission · Official source · Checked efte.twc.texas.gov/electronic_fund_transfer_wages.html
What the source says
“A good guideline to follow would be to select a payroll card program that allows at least one free cash withdrawal per pay period – that way, the employee can be advised that they can withdraw their pay in cash from a suitable ATM terminal, if they wish.”
- 15Fact Sheet #21: Recordkeeping Requirements under the Fair Labor Standards Act (FLSA)U.S. Department of Labor · Official source · Page updated · Checked Pinpoint: What Records Are Required; 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.”
“Records on which wage computations are based should be retained for two years,”
“The Act requires no particular form for the records, but does require that the records include certain identifying information about the employee and data about the hours worked and the wages earned.”
- 16TWC Important Employer Contact InformationTexas Workforce Commission · Official source · Checked Pinpoint: Important Employer Contact Information, Wage and Hour rowefte.twc.texas.gov/contact_information.html
What the source says
“Wage and Hour (Payday & FLSA Questions) (800) 832-9243”
- 17Fact Sheet # 77 A: Prohibiting Retaliation Under the Fair Labor Standards Act (FLSA)U.S. Department of Labor · Official source · Checked Pinpoint: Coverage, paragraph 1; Enforcement, remedieswww.dol.gov/agencies/whd/fact-sheets/77a-flsa-prohibiting-retaliation
What the source says
“the protection applies to all employees of an employer even in those instances in which the employee’s work and the employer are not covered by the FLSA.”
“employment, reinstatement, lost wages and an additional equal amount as liquidated damages.”
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.