Enter a tipped employee's week and get the full pay computation — the tip credit actually available (including New York's occupation-and-region tiers), the regular rate, the overtime cash rate (the one payroll gets wrong), a day-by-day classification naming the rule behind every premium hour, and a priced comparison against the common wrong methods — with each step shown and cited so you can hand the result to a controller or counsel. Inputs never leave your browser. Use Copy share link to send a scenario to a colleague.

Sets the minimum wage, tipped cash minimum, maximum credit, and daily-overtime rules.
What the employer pays per hour before tips.
All tips kept by the employee (after any valid pool).
Distributed service charges are wages — they raise the regular rate and can't fund the tip credit.
Non-discretionary bonuses, attendance incentives, and similar.
Hours worked, by day

Worked example: the $5.76-vs-$3.20 week#

The single most common tipped-overtime violation, on the simplest possible facts — a Texas server at the federal floor. Enter these inputs (or use Load example):

  • State: Texas (federal rates: $7.25 minimum, $2.13 cash, $5.12 maximum credit)
  • Direct cash wage: $2.13/hour
  • Tips this workweek: $400.00 (service charges and other pay: $0)
  • Hours: 9 per day, Monday–Friday — 45 hours total

The computation, exactly as the engine runs it#

  1. Hours: 40 straight, 5 overtime. No daily overtime in Texas; the weekly threshold is 40 (FLSA §7(a)).
  2. Tip credit claimed: $5.12/hour = min($7.25 − $2.13, $5.12). Reality check: the credit claimed for the week is $5.12 × 45 = $230.40, and the $400 in tips covers it — no shortfall (29 CFR 531.59).
  3. Regular rate: $7.25/hour — the full minimum wage (cash $2.13 + credit $5.12), never the cash wage (29 CFR 531.60).
  4. The overtime CASH rate: $5.76/hour, not $3.20. (1.5 × $7.25) − $5.12 = $10.875 − $5.12 = $5.755 → $5.76. The tip credit stays flat at $5.12 for overtime hours; it does not get multiplied. Computing 1.5 × $2.13 = $3.20 is the violation.
  5. Cash wages due: $113.98. Straight cash $2.13 × 45 = $95.85, plus the half-time premium 0.5 × $7.25 × 5 = $18.13. With the $400 in tips, the week totals $513.98.

The wrong method — 40 × $2.13 plus 5 hours at $3.20 — pays $101.20, a $12.78 weekly underpayment. Small per check; across a 30-server outlet and a two- or three-year lookback with liquidated damages, it is the lead claim in a collective action. The calculator now prices this for you: the What the common mistakes would cost table shows the weekly gap, the 52-week annualization ($664.56 here), and the two- and three-year FLSA lookback totals ($1,329.12 / $1,993.68) for the scenario entered. The full doctrine is in the tip credit brief.

Worked example: New York's tiered credit#

New York prices the tip credit by occupation class and region under the Hospitality Industry Wage Order — and the overtime cash rate moves with the tier. Select New York and the wage-order fields appear. Take a banquet server who qualifies as a food service worker, downstate, working the same 45-hour week:

Downstate food service worker, 45 hours#

  1. Tier resolution: food service worker, NYC/Long Island/Westchester — cash wage $11.35, maximum credit $5.65, against the $17.00 basic minimum (12 NYCRR Part 146).
  2. Regular rate: $17.00/hour — cash $11.35 + credit $5.65. The full basic minimum, never the cash wage.
  3. Overtime cash rate: (1.5 × $17.00) − $5.65 = $19.85/hour. The credit stays flat for overtime hours at the state wage exactly as it does at the federal one.
  4. Written notice is a gate, not a formality: the credit is unavailable without prior written notice in English and the employee's primary language, and a missing notice voids the credit for the entire period (12 NYCRR 146-2.2; NY Lab. Law §195(1)). The calculator surfaces this as a standing warning whenever New York is selected.
  5. Service employees face a tip threshold: switch the occupation class and the credit exists only in weeks when tips average at least $3.65/hour downstate — $9.55 at a resort hotel ($3.40 and $9.00 upstate). Fall short and the calculator zeroes the credit for the week and flags the violation.
  6. Side work has a daily price: New York's 80/20/two-hour rule survived the 2024 federal vacatur — enter the number of days that failed it and the calculator flags the credit lost for each of those days (12 NYCRR 146-2.9).

Switch the region to remainder-of-state and every figure re-prices from the $16.00 basic minimum. New York specifics live in the New York guide; the doctrine is in the tip credit brief.

What this calculator checks that payroll systems miss#

  • The overtime cash rate is 1.5 × the full minimum wage minus the tip credit — never 1.5 × the cash wage. At federal rates that's $5.76/hour, not $3.20.
  • The weekly tip-credit reality check: if tips don't cover the credit claimed for the week, the employer owes the shortfall in cash that week.
  • The notice prerequisite: the tip credit requires advance notice of the cash wage, the credit, and the employee's right to retain tips — no valid notice, no credit, for the entire period it was missing (29 CFR 531.59(b); written in New York).
  • New York's wage-order tiers are computed, not approximated: occupation class, region, the resort-hotel tip thresholds that can zero a service employee's credit, and the daily 2-hour/20% side-work rule — using the same verified Part 146 parameters as the workweek auditor.
  • Service charges raise the regular rate — and the overtime premium with it (29 CFR 531.55).
  • No-credit states: select California, Washington, Oregon, Nevada, Minnesota, Montana, or Alaska and the calculator enforces the full cash minimum.
  • Day-by-day classification: daily overtime in CA (with double time and the seventh-consecutive-day rule), AK, and CO is computed per day without pyramiding, and the result table names the rule behind every premium hour. Nevada's earnings gate (daily OT only below 1.5× the minimum wage) is applied automatically; its rolling 24-hour window is simplified to calendar days here — the workweek auditor models it from shift times.
  • The cost of getting it wrong: every overtime week is re-priced under the common wrong methods — overtime on the cash wage, and a regular rate that ignores service charges — with weekly, annualized, and two-/three-year lookback figures (29 U.S.C. §255(a)).
  • The credit-void downside: the calculator separately prices what the employer owes back if the tip credit is ever disallowed — a missing notice, a sub-threshold tip week, or a failed side-work day. Because the lawful pay is the full minimum wage in cash, the entire credit comes back for every hour and every week of the defect — the number that dwarfs the overtime-method errors (29 CFR 531.59(b)).

Background: tip credit fundamentals · overtime & the regular rate. This tool is educational and illustrative — see the disclaimer.