Tipped Employee Overtime Calculator
The math for tipped overtime is tricky. Employers often calculate it illegally. Use this tool to instantly find your legal cash overtime rate under FLSA tip credit rules.
Employers often illegally calculate tipped overtime by multiplying the sub-minimum cash wage (e.g., $2.13) by 1.5. This is illegal. Overtime must be calculated by multiplying the full minimum wage by 1.5, and then subtracting the tip credit.
Estimated Results
How is tipped overtime legally calculated?
Under the federal Fair Labor Standards Act (FLSA), calculating overtime for an employee receiving a sub-minimum cash wage (like a restaurant server or bartender) requires specific math.
The Illegal Way (Very Common):
Multiplying your sub-minimum direct cash wage by 1.5. For example, if you earn $2.13/hr, paying you $3.20/hr for overtime is illegal wage theft.
The Legal Way (The FLSA Rule):
Your employer must multiply the full minimum wage by 1.5, and then subtract the tip credit.
Example Calculation (Federal $7.25 Wage)
- Full Minimum Wage = $7.25
- Cash Wage Paid = $2.13
- Tip Credit Claimed = $5.12 ($7.25 - $2.13)
Overtime Rate (1.5×) = $7.25 × 1.5 = $10.88
Minus Tip Credit = $10.88 - $5.12 = $5.76
Legal Cash Overtime Rate = $5.76/hr
Wage Data & Source Review
Official Labor & Wage Sources
Educational Disclaimer
This tool provides educational overtime estimates based on statutory baselines. It is not formal legal, financial, or tax advice. Actual wage calculations can vary based on local municipal ordinances, specific collective bargaining agreements, salary docking policies, or custom shift arrangements. Always consult official state labor departments or qualified professionals for situation-specific guidance.