Tipped Minimum Wage in Pennsylvania

How the Tip Credit Works

Under federal law, employers can pay tipped employees a cash wage as low as $2.13 per hour and claim a 'tip credit' for the difference, but only if tips bring the worker up to at least the full minimum wage. If tips fall short, the employer must make up the gap.

Tipped Wages in Pennsylvania

Pennsylvania allows a tip credit, but the required tipped cash wage and the exact rules vary and change. Confirm the current tipped minimum with the state before you run payroll.

Staying Compliant

Track tipped hours and tips so you can show that cash wages plus tips met the full minimum for every shift, the most common tipped-wage claim is exactly that they didn't.

Tipped Pay in Pennsylvania, Worked Through

Pennsylvania allows a tip credit, which lets an employer count a portion of tips toward the minimum wage. The cash wage plus tips must reach at least $7.25 for every hour worked, and if tips fall short in a given week the employer makes up the difference. That top-up is calculated per workweek, not averaged across a month.

Overtime for tipped staff is calculated on the full minimum wage, not on the reduced cash wage. Working the premium from the cash wage is a common and expensive error, because it understates every overtime hour.

A valid tip pool can include employees who customarily receive tips. Managers and supervisors cannot take from it, and neither can the business, regardless of how the arrangement is described to staff.

Pennsylvania Labor-Law Snapshot

Pennsylvania permits a tip credit toward the minimum wage for tipped employees. The Pennsylvania minimum wage is $7.25/hour (the federal floor), so a tipped worker's effective floor tracks that figure once tips top up the cash wage.

For Pennsylvania employers these rules interact with timekeeping: accurate, audit-logged hours drive overtime, final pay, and break records. Pennsylvania sets no statewide meal-break requirement and does not mandate paid rest breaks; a final paycheck is due by the next regular payday when an employee resigns. Confirm current Pennsylvania figures with the state labor office before relying on any single number.

What Pennsylvania Employers Should Keep on File

Federal law requires employers to keep payroll records for at least three years, and the records used to calculate pay, such as time cards and work schedules, for at least two. Several states require longer. The practical standard is simple: if a former employee filed a claim tomorrow, could you evidence every hour you paid and every hour you did not?

The records that matter are the daily start and end times, the total hours for each workweek, the regular rate and any premium, all additions and deductions, and the pay period the payment covers. Keeping the underlying punches matters more than keeping the summary, because a total nobody can trace back is not evidence.

Where the record is missing or unreliable, the employee's reasonable recollection is generally accepted, and the employer carries the burden of disproving it. That is the single strongest argument for an automatic time clock over a paper sheet reconstructed at the end of the week.

How Pennsylvania Compares with the States Next Door

Pennsylvania borders 6 states, and stays at the federal floor here. Delaware, Maryland, New Jersey, New York, Ohio and West Virginia allow a tip credit.

Minimum wage across the line: Delaware $15.00, Maryland $15.00, New Jersey $15.92, New York $16.00, Ohio $11.00, West Virginia $8.75. Pennsylvania is at $7.25.

If you employ people on both sides of the Pennsylvania border, the stricter of the two states usually governs each worker, based on where the work is actually performed rather than where your business is registered.

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Official Sources

• U.S. DOL, Minimum wage by state
• U.S. DOL, State overtime
• U.S. DOL, State labor offices

More Pennsylvania Guides

Tipped Minimum Wage in Other States

Pennsylvania Tipped Minimum Wage: Frequently Asked Questions