Tipped Minimum Wage in Vermont (2026)

Key numbers at a glance

How Vermont tipped pay works

Vermont's minimum wage is $14.42 an hour. Tipped employees must be paid at least $7.21 of that in cash — exactly 50% of the minimum — and the employer may take a tip credit of up to $7.21 per hour, with your tips covering the remaining half. To be paid on this structure at all, you must receive more than $120 in tips per month; that is the state's line between tipped and non-tipped work.

The safety net is the weekly top-up. If cash wage plus tips does not average $14.42 for every hour of the workweek, the employer owes make-up pay for the difference — computed weekly, never averaged across weeks. A concrete week: 30 hours at $7.21 is $216.30 in wages, and the weekly floor is 30 × $14.42 = $432.60. Keep $300 in tips and you land at $516.30, well clear. Keep only $150 — easy to do in mud season — and the total is $366.30, short by $66.30, which must appear on the check as make-up pay. Our server paycheck calculator runs this check on your own hours and tips automatically.

These are the current official figures, per the U.S. Department of Labor table, July 2026. Vermont adjusts its minimum wage with the cost of living most Januaries, and the tipped cash wage moves with it at half the minimum — so re-check the numbers at the start of each year. To see how the state compares, our tipped minimum wage by state table puts every state side by side.

The $120 monthly tip threshold

Vermont's threshold for tipped status sits in the middle of the national range: more than $120 in tips per month. Anyone comfortably above it — servers, bartenders, barbacks in any real venue — can be paid $7.21 plus tips. Anyone below it must be paid the full $14.42 in cash, because the law does not treat them as tipped employees and the credit cannot attach.

The threshold exists to stop the credit from being stretched onto roles where tips are occasional rather than customary — counter service with a tip jar, banquet setup, slow-season breakfast shifts. If your tips hover near the line, your classification can change with the season, and that is worth watching: the difference between the two payroll lines is $7.21 an hour in guaranteed cash.

Vermont vs. the federal $2.13 system

Vermont guarantees $5.08 an hour more in cash than the federal floor and $7.17 more in total minimum — roughly $10,000 a year on a 2,000-hour schedule before the first tip. And because the credit is capped at half the minimum, the overtime cash rate works out to the full $14.42 an hour, among the strongest tipped overtime rates in the country.

What Vermont servers should watch

The top-up, checked weekly. In a tourism economy with real shoulder seasons, slow weeks are a structural feature, not a surprise. Log hours and kept tips per workweek; anything under a $14.42 average is make-up pay owed on the check — in the example above, $66.30 that belongs to you.

Overtime math. Vermont overtime is computed on the full $14.42 minimum, not the $7.21 cash wage: the OT cash rate = $7.21 + 0.5 × $14.42 = $14.42 per overtime hour, plus tips. Time-and-a-half on $7.21 ($10.82) understates the legal rate by $3.60 an hour — the overtime calculator prices your exact week.

Tip pool membership. Tip pools are for employees only, never managers. A supervisor taking a share is the classic violation, and it can void the tip credit — moving every affected server's cash wage up to the full minimum for the period involved.

Your real number. A $7.21 base with $26 an hour in tips is a $33.21-an-hour job in disguise, with a $14.42 floor under it even in the dead of February. Compute effective hourly — wages plus kept tips, divided by hours — before comparing this job to any other offer.