Estimate your real take-home pay as a tipped worker — wages plus tips, minus federal tax (with the new No Tax on Tips deduction) and FICA. ✓ 2026 IRS figures
Wages + tips • After tax
Tipped workers often earn a low base wage plus significant tips. This calculator estimates your annual take-home by combining wages and tips, then applying the 2026 standard deduction ($16,100 single / $32,200 joint), the new No Tax on Tips deduction (up to $25,000), 2026 federal income-tax brackets, and FICA (7.65%).
The new tip deduction can meaningfully boost take-home pay for servers, bartenders and other tipped staff. This is a simplified estimate that excludes state taxes and other withholdings — your actual paycheck may differ. Not tax advice.
Tipped workers in the US may be paid a cash wage below the standard minimum — as little as $2.13 federally — provided tips bring total earnings to at least the full minimum wage. If they do not, the employer must make up the difference, which is the tip credit mechanism. Several states prohibit tip credits entirely and require the full minimum wage before tips. The practical consequence of a low cash wage is that payroll taxes on the full tipped income can exceed the cash wage itself, producing a paycheque of zero with tips paid in cash or by card settlement.
Required wage = max(cash wage + tips, applicable minimum wage) per hourTip credit = minimum wage − cash wage (capped federally)Employer makeup = shortfall if cash wage + tips < minimum wageFICA applies to cash wages AND reported tipswhere:
Assumptions: State law frequently overrides the federal minimum: several states require the full minimum wage plus tips. The tip credit must be tested per pay period, and tip pooling rules restrict who may participate.
Test whether tips cover the minimum wage, and compute the employer's liability.
Result$8.84 of employer makeup pay owed — $7.25/hour effective
In a strong week with $600 of tips, FICA on total earnings would be $51.11 against a cash wage of $68.16, leaving a paycheque of about $17 before income tax withholding. Zero-dollar paycheques are routine in tipped work and are not an error — the earnings arrived as tips.