Restaurant Overtime Calculator 2026 | Tipped Pay & OT

Question 1

How do you calculate overtime for tipped employees?

Accepted Answer

Start from the full applicable minimum wage, not the cash wage. At the federal floor, overtime is $7.25 × 1.5 = $10.875, then the employer subtracts the maximum $5.12 tip credit, leaving a cash overtime wage of $5.76 per hour. If your regular rate is above minimum wage because of service charges or a higher base, use that rate instead.

Question 2

Do tips count toward the regular rate for overtime?

Accepted Answer

No. Voluntary customer tips are gifts under the FLSA and stay out of the regular rate. Mandatory service charges, automatic gratuities, and banquet fees are employer-controlled wages and must be included, which raises the overtime rate.

Question 3

What is the dual jobs rule for restaurant staff?

Accepted Answer

When an employee works two jobs at different rates — server at a tipped rate and prep cook at a full rate — the employer may only take a tip credit for the tipped work. Overtime uses a weighted average of the two rates unless the employee agreed in writing before the work that overtime would be paid at the rate for the job performed during the overtime hours.

Question 4

Do salaried restaurant managers get overtime?

Accepted Answer

Only if they fail the executive exemption test: a salary at or above the current federal threshold, primary duty of management, regular direction of two or more full-time employees, and real authority over hiring decisions. A working shift lead who spends most hours on the line or behind the bar is usually non-exempt and owed overtime.

Question 5

Which states ban the tip credit entirely?

Accepted Answer

California, Oregon, Washington, Nevada, Montana, Minnesota, and Alaska require the full state minimum wage before tips, so overtime is figured on that higher wage. Several other states set a cash wage above $2.13. Always use the highest of federal, state, and local requirements.

Federal cash wage floor	$2.13 with a valid tip credit
Overtime base	Full minimum wage or higher regular rate
Max tip credit	$5.12 per hour, including overtime hours
Service charges	Wages — included in the regular rate
Tips	Excluded from the regular rate

Restaurant Overtime Calculator

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Where Restaurants & Hospitality Overtime Goes Wrong

Overtime figured at 1.5 × $2.13

Mandatory service charges left out

Dual-rate weeks averaged wrong

Rules and Terms That Apply to servers, bartenders, and kitchen staff

Restaurants & Hospitality Overtime FAQ

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