Pennsylvania tip pooling laws & tipped minimum wage
In Pennsylvania, employers can pay tipped workers $2.83/hr as long as tips bring them to the $7.25 minimum — here's how that works and who can legally share your tips.
| Regular minimum wage | $7.25/hr |
| Minimum cash wage for tipped workers | $2.83/hr |
| Maximum tip credit | $4.42/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 Pennsylvania labor department. Not legal advice.
What's specific to Pennsylvania
Pennsylvania’s 2022 regulations: the tipped rate applies only to workers earning $135+/month in tips, and 80/20 limits apply to non-tipped side work.
Pennsylvania’s tipped wage only applies if you earn at least $135 a month in tips
Pennsylvania uses the federal $7.25 minimum wage, but its tipped cash wage of $2.83 an hour is higher than the federal $2.13. Under regulations that took effect in 2022, an employer can only pay that tipped rate if you actually earn at least $135 a month in tips.
If you do not clear $135 in tips in a month, you do not count as a tipped employee for that period, and your employer must pay you the full $7.25 minimum wage in cash rather than the $2.83 tipped rate.
The 80/20 rule limits how much side work you can be paid the tipped rate for
Pennsylvania also caps non-tipped duties. Your employer cannot take the tip credit for time spent on work that does not directly produce tips — such as rolling silverware or deep cleaning — once that side work passes 20 percent of your hours in a workweek. For time beyond that 20 percent, you must be paid the full $7.25.
The 2022 rules also protect your tips directly: employers cannot deduct credit-card processing fees from tips paid by card, and those tips belong to you.
Tip pooling in Pennsylvania
Pennsylvania follows the federal baseline: employers may require tip pooling. If your employer takes the tip credit (pays $2.83/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 Pennsylvania 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.
Pennsylvania tip law FAQs
What is the tipped minimum wage in Pennsylvania?
Employers in Pennsylvania may pay tipped employees a cash wage of $2.83/hr and claim a tip credit of up to $4.42/hr toward the $7.25 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 Pennsylvania?
Pennsylvania follows the federal baseline: employers may require tip pooling. If your employer takes the tip credit (pays $2.83/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 Pennsylvania?
No. Federal law prohibits managers, supervisors, and owners from keeping any portion of employee tips in every state, including Pennsylvania. A manager may keep only tips they directly and solely earned (e.g., a table they personally served start to finish).
What happens if I earn less than $135 in tips in a month in Pennsylvania?
Then you are not a tipped employee for that month, and your employer must pay you the full $7.25 minimum wage in cash instead of the $2.83 tipped rate. The $135 monthly threshold is what allows the tipped rate at all.
Can my employer pay me $2.83 for hours spent on cleaning and setup?
Only up to a point. Under Pennsylvania’s 80/20 rule, once non-tip-producing side work exceeds 20 percent of your workweek, your employer must pay the full $7.25 for that extra time. You can file a complaint with the Pennsylvania Department of Labor and Industry.