What is a tipped employee?

Last modified 9/16/2024 8:31:46 AM EST

A tipped employee is an individual who earns $30 or more as a tip for a month. However, the threshold for the tipped employees may differ for each state. The employees' tipped minimum wage is lower than their basic pay because they earn tip credit.

Example: Employees who work in restaurants, hospitals, hotels, etc., are considered tipped employees.