Indiana Tipped Minimum Wage 2026
Figure basis: Official Indiana Department of LaborIndiana lets employers pay tipped workers a cash wage of $2.13 an hour and take a tip credit of up to $5.12, as long as tips bring total pay to at least the $7.25 minimum wage. This Indiana tipped minimum wage calculator shows what that means in practice. Enter your average tips per hour and your weekly hours, and it works out whether your tips clear the tip credit, whether your employer owes you a top-up to reach the $7.25 minimum, and your effective hourly, weekly and yearly pay. A tip credit lets an employer pay a lower direct cash wage and count part of your tips toward the regular minimum wage, but it can never leave you below the minimum: if tips fall short in a given week, the law requires the employer to make up the difference. The cash wage, tip credit and minimum wage used here are the 2026 figures for Indiana, sourced from the Indiana Department of Labor. Tips you earn above the minimum are always yours to keep.
Indiana tipped workers get a cash wage of $2.13/hr, with up to a $5.12 tip credit toward the $7.25 minimum wage.
How the Indiana tipped wage and tip credit work
cash wage = $2.13/hr (paid by employer)
total before top-up = cash wage + your tips per hour
if total < $7.25: employer tops up to $7.25
effective pay = greater of (cash + tips) and $7.25
These are gross figures before tax. Tips are taxable income and must be reported. For your after-tax pay, see the Indiana paycheck calculator, and for the regular rate the Indiana minimum wage calculator.
Checking that your Indiana tip credit actually adds up
Indiana does not write its own tipped-wage rule; it adopts the federal Fair Labor Standards Act line for line. That means an employer may pay a direct cash wage as low as $2.13 an hour and claim a tip credit of up to $5.12, the two adding up to the $7.25 minimum. The tip credit is not money the employer hands over: it is the slice of your own tips the law lets them count toward the minimum wage.
Two conditions have to hold before that $2.13 wage is even legal. First, the employer must tell you in advance that it is taking a tip credit; if it never did, it owes the full $7.25 in cash. Second, you must keep all your tips, apart from a valid tip pool shared only among staff who customarily receive tips.
To check you were made whole, work by the week, not the shift. Add your cash wages and all your tips for the week, then divide by hours worked. If the result is below $7.25 an hour, Indiana and federal law require your employer to pay the shortfall so you reach $7.25. A single slow lunch does not trigger a top-up on its own; the test is the weekly average. Keep your own tally of hours and tips, and compare it against your pay stub before you sign off. Confirm the current figures with the Indiana Department of Labor.
Indiana tipped minimum wage: frequently asked questions
What is the tipped minimum wage in Indiana in 2026?
In Indiana, the minimum cash wage for tipped employees is $2.13 an hour in 2026. Employers may count up to $5.12 an hour of tips (the "tip credit") toward the $7.25 minimum wage. If an employee's cash wage plus tips does not average at least $7.25 an hour, the employer must pay the difference.
Does Indiana allow a tip credit?
Yes. Indiana allows employers to take a tip credit of up to $5.12 an hour, meaning the direct cash wage can be as low as $2.13 an hour provided tips make up the rest to $7.25. The federal tip-credit floor is a $2.13 cash wage.
What happens if my tips do not reach minimum wage in Indiana?
Your employer must make up the shortfall. In any week where your cash wage of $2.13 plus your tips does not average at least $7.25 an hour, Indiana and federal law require the employer to top your pay up to $7.25. You should never earn less than the full minimum wage once tips are counted.
How much does a tipped worker make in Indiana?
It depends on tips, but here is a worked example: a server working 30 hours a week and averaging $12.00 an hour in tips. Cash wage $2.13 plus $12.00 tips is $14.13 an hour, which is above the $7.25 minimum, so the effective rate is $14.13 an hour, about $423.90 a week or $22,042.80 a year before tax. Use the calculator with your own tips and hours.
Is the tip credit the same as the tipped wage?
No, they are two sides of the same figure. The "tipped minimum wage" (or tipped cash wage) is what the employer pays directly: $2.13 in Indiana. The "tip credit" is how much of your tips the employer is allowed to count toward the regular minimum wage: $5.12 in Indiana. Cash wage plus tip credit equals the $7.25 minimum wage.
Official sources
- Indiana 2026 tipped and minimum wage figures: Indiana Department of Labor, as at July 11, 2026.
- Federal tip credit and the $2.13 cash-wage floor: US Department of Labor, Wage and Hour Division.
Reviewed by the CalculatorHub team, edited by James Graham, 11 July 2026. See our methodology. General information, not legal or financial advice. Indiana permits a $2.13 tipped cash wage with a $5.12 tip credit, matching the federal FLSA.