Michigan tip pooling laws & tipped minimum wage
In Michigan, employers can pay tipped workers $5.49/hr as long as tips bring them to the $13.73 minimum — here's how that works and who can legally share your tips.
| Regular minimum wage | $13.73/hr |
| Minimum cash wage for tipped workers | $5.49/hr |
| Maximum tip credit | $8.24/hr |
| Tips belong to | Employees — always |
A tip credit lets an employer count your tips toward the minimum wage it owes you. Rates reviewed July 2026. Rates change — confirm with the Michigan labor department. Not legal advice.
What's specific to Michigan
Under the 2025 compromise law, Michigan’s tipped cash wage is 40% of the minimum wage in 2026 and rises 2 points each year until it reaches 50% in 2031.
Michigan kept the tip credit — and is phasing the cash wage up
Michigan’s minimum wage rose to $13.73 an hour on January 1, 2026. Tipped workers are paid a cash wage of $5.49 an hour, with the employer claiming a tip credit for the rest, as long as tips bring you to at least $13.73.
That $5.49 is not a fixed number — it is 40% of the full minimum wage for 2026. Under the compromise law signed in February 2025, the tipped cash wage rises by two percentage points each year: 42% in 2027, 44% in 2028, and on up to 50% in 2031, where it stays.
The tip credit survived a near-elimination
Michigan came close to phasing out the tip credit entirely. The February 2025 law was a compromise that preserved it while accelerating the increases to the regular minimum wage. So unlike a full elimination, your employer can still pay the lower tipped cash wage — but that wage climbs every year until it reaches half the minimum.
If your tips do not reach the minimum, your employer owes the difference
The tip credit is not permission to pay you below the minimum wage. In any workweek where your $5.49 cash wage plus tips do not average at least $13.73 an hour, your employer must make up the shortfall in that paycheck.
Tip pooling in Michigan
Michigan follows the federal baseline: employers may require tip pooling. If your employer takes the tip credit (pays $5.49/hr cash), the pool may only include customarily tipped workers — servers, bussers, bartenders, runners, hosts. Back-of-house can only be included if everyone is paid full minimum wage with no tip credit. Managers and supervisors are always excluded.
One federal rule applies everywhere: managers and supervisors can never take from a tip pool. Separately, credit card processing fees may only be deducted from tips where state law allows it.
What this means for your tip-out
Because part of your legal wage in Michigan comes from tips, the employer's tip credit assumes those tips reached you. Use the tip-out calculator to split a shift by your house's percentages or by hours, and see standard tip-out percentages to check whether your house's rates are typical.
Michigan tip law FAQs
What is the tipped minimum wage in Michigan?
Employers in Michigan may pay tipped employees a cash wage of $5.49/hr and claim a tip credit of up to $8.24/hr toward the $13.73 minimum wage. If tips don't close the gap in a workweek, the employer must make up the difference.
Is mandatory tip pooling legal in Michigan?
Michigan follows the federal baseline: employers may require tip pooling. If your employer takes the tip credit (pays $5.49/hr cash), the pool may only include customarily tipped workers — servers, bussers, bartenders, runners, hosts. Back-of-house can only be included if everyone is paid full minimum wage with no tip credit. Managers and supervisors are always excluded.
Can my manager take a share of the tip pool in Michigan?
No. Federal law prohibits managers, supervisors, and owners from keeping any portion of employee tips in every state, including Michigan. A manager may keep only tips they directly and solely earned (e.g., a table they personally served start to finish).
Why is Michigan’s tipped wage going up every year?
The February 2025 compromise law sets the tipped cash wage as a percentage of the minimum wage — 40% in 2026 — and raises it two points a year until it reaches 50% in 2031. The tip credit was kept, not eliminated.
What is Michigan’s tipped cash wage for 2026?
It is $5.49 an hour, which is 40% of the $13.73 minimum wage. Your tips must bring your total to at least $13.73, or your employer must cover the difference.