Calculate tipped overtime from the full minimum wage.
Use the federal FLSA baseline to check tipped overtime, minimum wage make-up pay, the cash wage, and the hourly tip credit. State, local, or contract rules can require more.
Check tipped overtime and minimum wage make-up pay
Use the federal baseline: overtime starts from the full minimum wage or regular rate, then subtracts only the allowable hourly tip credit.
Federal tip-credit overtime estimate
Enter the workweek details to see the formula.
State, local, or contract rules may require a higher result.
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General information only. Federal DOL guidance says tipped overtime is based on the full minimum wage or regular rate before subtracting the allowable tip credit, and the tip credit cannot be increased for overtime hours. Review DOL Fact Sheet #15 and DOL Fact Sheet #23, then verify state, local, tip-pool, notice, and agreement requirements before payroll.
Supported in AppyShift
- Tip declarations, extra earnings, approved hours, and payroll review stay connected before export.
- Payroll Review checks tipped minimum-wage shortfalls separately from expense reimbursements and other non-wage amounts.
- Managers can compare time records, overtime, tips, and earnings before sending payroll data outside AppyShift.
Start with the full minimum wage
Under the federal rule, tipped overtime is based on the full applicable minimum wage or regular rate before subtracting an allowable tip credit. The overtime cash rate is not one-and-a-half times the tipped cash wage.
Limit the tip credit
The hourly tip credit cannot be larger than the difference between the applicable minimum wage and the required cash wage, and it cannot exceed the tips actually received. If cash wages plus tips do not reach the minimum wage, the employer makes up the difference.
Keep regular-rate additions separate
Service charges, commissions, bonuses, and similar earnings can affect the regular rate for overtime. Reimbursements and amounts that are not wages should be reviewed separately before they are included.
Check the location before relying on the result
States and cities may require a higher minimum wage, a higher tipped cash wage, a smaller tip credit, daily overtime, or no tip credit at all. Use this as a federal baseline check, then verify the work location.
Manager checklist
- Confirm the workweek, total tipped hours, and overtime threshold.
- Use the minimum wage and tipped cash wage that apply to the work location.
- Confirm the employee received enough tips to support the tip credit used.
- Include service charges, commissions, bonuses, or other regular-rate earnings when applicable.
- Verify tip-credit notice, tip-pool rules, state or local law, and any agreement before final payroll.