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.

Illustrative Texas inputs are shown. Choose your state and enter your own pay and hours, or load the worked example.

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 anchored 24-hour workday is simplified to supplied daily totals 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.