Tipped Overtime Calculator

Key numbers at a glance

The rule most employers get wrong

Overtime (over 40 hours/week federally) must be computed at 1.5 × the full minimum wage — never 1.5 × your $2.13 cash wage. The tip credit can offset the straight-time half, but it cannot grow on the extra half. The resulting formula is clean:

OT cash rate = cash wage + 0.5 × full minimum. Federally: $2.13 + $3.63 = $5.76 per OT hour in cash, plus your tips.

Example: 8 OT hours at the federal numbers → $46.05 owed in OT cash wages, before a dollar of tips. An employer paying "time-and-a-half on $2.13" (=$3.20) is shorting every OT hour — that difference, multiplied across paychecks and years, is exactly what wage claims recover.

Three things that change the math

State rules first. In the seven states with no tip credit (AK, CA, MN, MT, NV, OR, WA), OT is 1.5 × the full state minimum in cash — see the state-by-state table.

Regular rate can exceed minimum. If your tips are high enough that your total hourly (cash wage + tips kept) beats minimum wage, federal law sets your "regular rate" above minimum — and OT is 1.5 × that. The floor above is just where the computation starts.

The workweek matters. OT attaches per workweek, not per pay period. A 44-hour week followed by a 36-hour week contains 4 OT hours, even though both checks average 40.

A week that breaks the simple math

Forty-four-hour week, $2.13 cash wage, federal $7.25 minimum, $520 in kept tips. Most people (and, famously, some payroll systems) compute OT as 1.5 × $2.13 = $3.20/hour for the four extra hours — $12.79 in OT cash wages. The correct federal math: OT cash rate = $2.13 + 0.5 × $7.25 = $5.76 per overtime hour, so those same four hours owe $23.02 in cash wages. The gap is $10.23 for the week — and $530 a year for one consistent overtime shift, from one miscalculated rule.

Now the subtler layer. Your tips that week total $520 — roughly $11.80/hour across 44 hours — which makes your true regular rate ($2.13 + tips) far above $7.25. Federal law computes overtime on that higher regular rate, meaning the $5.76 figure is the legal floor, not the ceiling. In practice, if you consistently out-earn minimum, the floor is what payroll systems build — and often the only thing they build. Is your paycheck computing OT on $2.13, on $5.76, or on your real regular rate? That question, asked once to a payroll email address in writing, is one of the highest-paying questions in the industry.

One overtime hour under the two rule sets — the formula column is the entire difference: