In most states, restaurants can pay servers a lower cash wage and count tips toward the minimum wage. This is called a tip credit. Seven states require the full state minimum wage before tips. We compared each state’s tipped-wage rule (from the U.S. Department of Labor) with the average card tip at restaurants on the Toast payment platform in the second quarter of 2026.
If you’re planning a smaller food business with fewer tipped staff, our guide to starting a food truck covers licenses and startup steps, and our LLC cost guide explains the cost of forming a business.
Key findings
- At full-service restaurants in the seven states that require the full minimum wage before tips, card tips averaged 18.9%. That compares with 19.7% in the 16 states that use the federal $2.13 cash wage and 19.8% in the 27 states plus D.C. with a cash wage somewhere in between.
- The gap is small. On a $50 check, the difference between 18.9% and 19.7% is about 40 cents.
- States with higher cash wages tended to have somewhat lower full-service tips (correlation about -0.48). Much of that pattern comes from California (17.6%) and Washington (18.0%), the two lowest-tipping states.
- The pattern is not consistent. Montana (20.5%) requires the full minimum wage and tips above the national average. Florida (18.4%) and Texas (18.8%) allow a tip credit and tip below it.
- At quick-service restaurants, the three groups were nearly the same, at 16.1% to 16.4%.
- Delaware had the highest full-service tips (21.8%) and also one of the lowest cash wages ($2.23). California and D.C. tied for the lowest (17.6%).
- Nationally, full-service tips have stayed between 19.1% and 19.4% since 2024. In the second quarter of 2026 they averaged 19.1%.
Full-service and quick-service tips by state, Q2 2026
| State | Full-service avg. tip | Quick-service avg. tip | Tipped wage rule | Minimum cash wage (July 2026) |
|---|---|---|---|---|
| Delaware | 21.8% | 18.2% | Cash wage above $2.13 | $2.23 |
| New Hampshire | 21.3% | 15.7% | Cash wage above $2.13 | $3.27 |
| West Virginia | 21.1% | 18.3% | Cash wage above $2.13 | $2.62 |
| Indiana | 20.8% | 17.0% | Federal $2.13 cash wage | $2.13 |
| Ohio | 20.8% | 17.5% | Cash wage above $2.13 | $5.50 |
| Maine | 20.6% | 16.0% | Cash wage above $2.13 | $7.55 |
| Kentucky | 20.6% | 17.9% | Federal $2.13 cash wage | $2.13 |
| Wyoming | 20.5% | 18.5% | Federal $2.13 cash wage | $2.13 |
| Montana | 20.5% | 17.1% | Full minimum wage before tips | $10.85 |
| Rhode Island | 20.4% | 14.7% | Cash wage above $2.13 | $3.89 |
| Michigan | 20.3% | 16.0% | Cash wage above $2.13 | $5.49 |
| Pennsylvania | 20.3% | 16.2% | Cash wage above $2.13 | $2.83 |
| Wisconsin | 20.3% | 17.6% | Cash wage above $2.13 | $2.33 |
| Kansas | 20.2% | 15.6% | Federal $2.13 cash wage | $2.13 |
| Iowa | 20.2% | 17.4% | Cash wage above $2.13 | $4.35 |
| South Carolina | 20.2% | 16.7% | Federal $2.13 cash wage | $2.13 |
| Vermont | 20.1% | 16.6% | Cash wage above $2.13 | $7.21 |
| Idaho | 20.0% | 16.0% | Cash wage above $2.13 | $3.35 |
| Nebraska | 20.0% | 16.6% | Federal $2.13 cash wage | $2.13 |
| South Dakota | 19.9% | 16.8% | Cash wage above $2.13 | $5.93 |
| Massachusetts | 19.9% | 14.9% | Cash wage above $2.13 | $6.75 |
| Colorado | 19.8% | 16.7% | Cash wage above $2.13 | $12.14 |
| Missouri | 19.8% | 16.8% | Cash wage above $2.13 | $7.50 |
| Tennessee | 19.7% | 16.1% | Federal $2.13 cash wage | $2.13 |
| Minnesota | 19.6% | 16.1% | Full minimum wage before tips | $11.41 |
| Oklahoma | 19.6% | 16.3% | Federal $2.13 cash wage | $2.13 |
| North Dakota | 19.6% | 17.0% | Cash wage above $2.13 | $4.86 |
| Arizona | 19.6% | 15.5% | Cash wage above $2.13 | $12.15 |
| Connecticut | 19.6% | 15.2% | Cash wage above $2.13 | $6.38 |
| Alabama | 19.6% | 16.4% | Federal $2.13 cash wage | $2.13 |
| North Carolina | 19.5% | 16.6% | Federal $2.13 cash wage | $2.13 |
| Oregon | 19.5% | 17.4% | Full minimum wage before tips | $15.55 |
| Virginia | 19.4% | 15.5% | Federal $2.13 cash wage | $2.13 |
| Utah | 19.4% | 14.8% | Federal $2.13 cash wage | $2.13 |
| Maryland | 19.4% | 15.9% | Cash wage above $2.13 | $3.63 |
| Illinois | 19.2% | 15.8% | Cash wage above $2.13 | $9.00 |
| New Mexico | 19.2% | 16.9% | Cash wage above $2.13 | $3.00 |
| New Jersey | 19.1% | 13.7% | Cash wage above $2.13 | $6.05 |
| Alaska | 19.0% | 17.1% | Full minimum wage before tips | $14.00 |
| Arkansas | 19.0% | 16.0% | Cash wage above $2.13 | $2.63 |
| Louisiana | 18.9% | 15.8% | Federal $2.13 cash wage | $2.13 |
| Georgia | 18.9% | 16.0% | Federal $2.13 cash wage | $2.13 |
| New York | 18.9% | 15.3% | Cash wage above $2.13 | Varies by region and employer |
| Texas | 18.8% | 16.1% | Federal $2.13 cash wage | $2.13 |
| Mississippi | 18.8% | 16.6% | Federal $2.13 cash wage | $2.13 |
| Hawaii | 18.8% | 15.4% | Cash wage above $2.13 | $14.75 |
| Florida | 18.4% | 15.3% | Cash wage above $2.13 | $10.98 |
| Nevada | 18.4% | 15.7% | Full minimum wage before tips | $12.00 |
| Washington | 18.0% | 15.5% | Full minimum wage before tips | $17.13 |
| California | 17.6% | 14.8% | Full minimum wage before tips | $16.90 |
| District of Columbia | 17.6% | 14.5% | Cash wage above $2.13 | $10.30 |
Limitations
- The tip data covers only card and digital tips at restaurants on Toast’s platform. Cash tips are not included, and Toast’s mix of restaurants differs by state.
- This comparison does not show that wage rules cause higher or lower tips. States also differ in menu prices, taxes, incomes and local customs, and several big cities set their own wage rules.
- Cash wages are the state rates listed by the Department of Labor on July 1, 2026. Some states have exceptions for small employers. New York’s tipped wage varies by region and type of employer, so New York is left out of the correlation.
Related: tip credit by state and no tax on tips by state.
Sources
- Toast, Restaurant Tipping Trends (Q2 2026, updated Sept. 15, 2026)
- U.S. Department of Labor, Minimum Wages for Tipped Employees (July 1, 2026)