California tipped minimum wage and server pay
In California, employers must pay tipped staff at least $16.50 an hour in cash before tips. California does not allow a tip credit, so tipped workers earn the full $16.50 minimum wage plus their tips.The approximate effective state income tax on tips is 4%.
| Tipped cash minimum wage | $16.50 / hour |
|---|---|
| Standard minimum wage | $16.50 / hour |
| Tip credit allowed? | No |
| Approx. state income tax on tips | 4% |
What this means for your take-home
Your paycheck is the cash wage above, and your tips are on top of it. Because you earn the full minimum wage, your tips are a true bonus on a solid base, but they are still taxable income to track.Whatever your setup, your true hourly is your cash wage plus your net tips, divided by hours worked.
Tip pooling and tip-outs in California
Because California requires the full minimum wage for tipped staff, an employer here takes no tip credit — which under federal law permits a broader tip pool that can include back-of-house staff.Either way, managers, supervisors, and owners cannot keep a share. See tip pooling laws by state and what a tip credit is, or work out your own split with the tip-out calculator.
What to set aside for taxes in California
A rule of thumb is 20% to 30% of tips. With California's approximate 4% state rate on top of federal and FICA, use the tax set-aside calculator for a closer number, and read how much to save for taxes on tips. All tips are taxable wherever you work — here is what that actually means.
Figures are approximate and change. Verify current wage rates with the California labor department and confirm taxes with a professional.
Track your California tips, tip-out, and true hourly in 30 seconds a shift.
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