California Tip Credit & Tipped Minimum Wage Calculator
California bans the tip credit — see the full $16.90/hr cash minimum, tipped overtime, and what a shift takes home after FICA and the no-tax-on-tips deduction.
Employer cost this period
Pay composition & the minimum-wage check
The tip credit lets an employer count tips toward the minimum wage — but only up to the state cap, and only if cash wage plus tips reaches the full minimum for every hour. If it falls short, the employer must make up the difference.
Same shift, tip-credit state vs. no-tip-credit state
Tipped overtime is 1.5 × the full minimum, then minus the tip credit
The most common tipped-payroll mistake is taking time-and-a-half on the cash wage. Overtime is owed on the full minimum wage: the overtime rate is 1.5 × full minimum − tip credit, so the employer still pays the same tip credit on overtime hours but never less than that.
What the worker actually keeps
Take-home is cash wages plus the tips you keep after tipping out, minus FICA and income tax. The 2025 no-tax-on-tips deduction lowers income tax on your tips — but Social Security and Medicare (FICA) still apply to every dollar of tips.
— deducted from taxable income saves about — in income tax a year. It does not reduce the — of FICA you still owe on your tips. Model the full phase-out →
Two sides of the same shift
Tip credit & tipped minimum wage in California (2026)
California is one of the seven states that ban the tip credit, so in 2026 tipped employees must be paid the full $16.90/hr state minimum wage in cash — tips are the worker's on top and can never offset the wage. This page loads California's figures into the calculator so you can still model overtime, tip-out, FICA, and the no-tax-on-tips deduction.
Because California bans the tip credit, there is no make-up pay to compute — the $16.90/hr minimum is always paid in cash regardless of how tips fall. Over a standard 40-hour week that is $676.00 in guaranteed cash wages before a single tip, which is why California's labor cost for tipped staff is higher than in tip-credit states.
California does not allow a tip credit. At the statewide minimum, overtime is 1.5 × $16.90/hr, or $25.35/hr in cash. Higher regular cash wages require a higher overtime rate. Local or sector rates may be higher.
California figures were verified in July 2026 against the U.S. DOL tipped-wage tables and state labor-agency rates, and are reviewed annually. Federal figures: $2.13/hr cash wage, $5.12/hr tip credit, $7.25/hr minimum. This is an educational estimate only — not legal, payroll, or tax advice.
California tipped-wage FAQ
What is the tipped minimum wage in California for 2026?
California does not allow a tip credit, so the tipped minimum wage equals the full state minimum of $16.90/hr in 2026. Employers must pay that entire amount in cash, and tips belong to the employee on top of the wage.
Does California allow a tip credit?
No. California is a "One Fair Wage" state that bans the tip credit. Tipped workers receive the full $16.90/hr minimum wage in cash, and there is never any make-up pay to calculate.
How is tipped overtime calculated in California?
California does not allow a tip credit. At the statewide minimum, overtime is 1.5 × $16.90/hr, or $25.35/hr in cash. Higher regular cash wages require a higher overtime rate.
← All states: Tip Credit & Tipped Minimum Wage Calculator
More by state
More California tools
Keep the same state in view while you compare tax, benefits, and wage rules across Calculover.