Vermont Tipped Minimum Wage 2026
Figure basis: Official Vermont Department of LaborVermont lets employers pay tipped workers a cash wage of $7.21 an hour and take a tip credit of up to $7.21, as long as tips bring total pay to at least the $14.42 minimum wage. This Vermont 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 $14.42 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 Vermont, sourced from the Vermont Department of Labor. Tips you earn above the minimum are always yours to keep.
Vermont tipped workers get a cash wage of $7.21/hr, with up to a $7.21 tip credit toward the $14.42 minimum wage.
How the Vermont tipped wage and tip credit work
cash wage = $7.21/hr (paid by employer)
total before top-up = cash wage + your tips per hour
if total < $14.42: employer tops up to $14.42
effective pay = greater of (cash + tips) and $14.42
These are gross figures before tax. Tips are taxable income and must be reported. For your after-tax pay, see the Vermont paycheck calculator, and for the regular rate the Vermont minimum wage calculator.
Vermont's half-the-minimum tipped wage and the $120 test
Vermont does not borrow the federal $2.13 cash wage. State law sets the basic tipped wage at exactly half of the full minimum, which is $7.21 an hour in 2026 against a $14.42 minimum, and it applies to staff of hotels, motels, tourist places and restaurants who earn more than $120 a month in tips. That $120 threshold is far above the federal $30, so a lightly tipped worker may not be a tipped employee at all and would be owed the full $14.42 in cash.
If you are above the threshold, the make-whole test runs each workweek: total your $7.21 cash wages and the tips you kept, divide by the hours worked, and compare to $14.42. Any shortfall must be topped up by the employer in that paycheck, and the tip credit, also $7.21, can never exceed the tips you actually received. Because Vermont re-indexes the minimum to inflation every January, the tipped wage moves with it, so a figure from an earlier year will be stale; always run the check against the current rate.
Enter your real tips per hour and weekly hours above to see whether you clear the tipped floor and what your pay looks like weekly and across a 2,080-hour year.
Vermont tipped minimum wage: frequently asked questions
What is the tipped minimum wage in Vermont in 2026?
In Vermont, the minimum cash wage for tipped employees is $7.21 an hour in 2026. Employers may count up to $7.21 an hour of tips (the "tip credit") toward the $14.42 minimum wage. If an employee's cash wage plus tips does not average at least $14.42 an hour, the employer must pay the difference.
Does Vermont allow a tip credit?
Yes. Vermont allows employers to take a tip credit of up to $7.21 an hour, meaning the direct cash wage can be as low as $7.21 an hour provided tips make up the rest to $14.42. The federal tip-credit floor is a $2.13 cash wage.
What happens if my tips do not reach minimum wage in Vermont?
Your employer must make up the shortfall. In any week where your cash wage of $7.21 plus your tips does not average at least $14.42 an hour, Vermont and federal law require the employer to top your pay up to $14.42. You should never earn less than the full minimum wage once tips are counted.
How much does a tipped worker make in Vermont?
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 $7.21 plus $12.00 tips is $19.21 an hour, which is above the $14.42 minimum, so the effective rate is $19.21 an hour, about $576.30 a week or $29,967.60 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: $7.21 in Vermont. The "tip credit" is how much of your tips the employer is allowed to count toward the regular minimum wage: $7.21 in Vermont. Cash wage plus tip credit equals the $14.42 minimum wage.
Official sources
- Vermont 2026 tipped and minimum wage figures: Vermont 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. The basic tipped wage equals 50% of the full minimum wage ($7.21 in 2026); it applies to hotel, motel, tourist-place and restaurant staff earning more than $120/month in tips.