Guides

North Carolina restaurant pay rules (2026): what to pay tipped and non-tipped staff

Mays TeamSeptember 16, 2026
The Employee Timesheet report in Mays for the week of September 7, 2026: every punch of a line cook paid $7.25 an hour and a server paid the $2.13 cash wage, with clock-in and clock-out times, breaks, hours worked and wages

North Carolina's minimum wage is written as whichever is higher, $6.15 or the federal minimum wage, so it's $7.25 an hour, and it moves only when the federal rate does (G.S. 95-25.3). Much of the state's Wage and Hour Act reaches only businesses federal law doesn't: its minimum wage, overtime and tip-pool rules don't apply to an enterprise the federal Fair Labor Standards Act (FLSA) covers (G.S. 95-25.14). A business with $500,000 or more in yearly sales is covered, and a smaller one can be too, through staff whose work regularly involves commerce across state lines (DOL Fact Sheet #14). The rules every North Carolina restaurant follows are the act's rules on paying wages and tips: what staff must be told in writing, and when the money is due.

This page puts North Carolina's figures in one place. It covers what you owe tipped staff like servers and bartenders, what you owe everyone else, and two example weeks with the math shown. Every figure links to the official page it comes from.

Updated September 24, 2026: these figures are still current. North Carolina's minimum wage is $7.25 an hour ($2.13 cash wage for tipped employees). No increase is scheduled.

This is general information, not legal advice. Whether a rule applies can depend on your business's size and your own facts; the note at the end says more.

North Carolina pay rules at a glance

As of September 16, 2026:

Rule

North Carolina

Minimum wage

$7.25 an hour

Tipped employees: minimum cash wage

$2.13 an hour, if you take the tip credit

Maximum tip credit

$5.12 an hour

Who counts as tipped

Customarily and regularly receives more than $20 a month in tips under North Carolina law; more than $30 for an employer the federal law covers

Overtime

1.5× the regular rate after 40 hours in a workweek; no daily overtime

Meal and rest breaks for adults

Not required by North Carolina or federal law

Next change

None scheduled

Sources: NCDOL, minimum wage; G.S. 95-25.2; US DOL, tipped wages by state; G.S. 95-25.4; NCDOL, breaks.

Who counts as a tipped employee in North Carolina

In North Carolina, a tipped employee is someone who customarily and regularly receives more than $20 a month in tips (G.S. 95-25.2). An employer the federal Fair Labor Standards Act (FLSA) covers must also meet the federal test to pay less than the federal minimum wage: more than $30 a month in tips (US DOL, tipped wages by state).

In a restaurant that usually means servers, bartenders, bussers and counter staff who serve customers, including baristas who get tips. Cooks and dishwashers usually aren't tipped employees. Only tips the employee actually receives count. If someone works two jobs, say a server who also works prep shifts, the tip credit applies only to the hours in the tipped job (DOL Fact Sheet #15).

What you must pay tipped staff in North Carolina

Servers, bartenders, bussers and baristas who get tips can be paid a lower cash wage, with part of their tips counted toward the minimum wage. That's the tip credit, and it comes with conditions:

  • Pay at least $2.13 an hour in cash wages. That's the $7.25 minimum wage minus the most you can credit from tips, $5.12 (NCDOL, minimum wage).
  • Cash wages plus tips must reach $7.25 for every hour worked, week by week. If tips fall short in a workweek, you pay the difference by the regular payday for that week (DOL Fact Sheet #15).
  • Tell them first. Before you take the tip credit, tell each tipped employee, in writing or out loud: the cash wage you pay, the tip credit you claim, that the credit can't be more than the tips they actually get, that they keep all their tips except through a valid tip pool, and that the credit doesn't apply unless you've told them all this (DOL Fact Sheet #15).
  • Overtime is figured on the full minimum wage. An overtime hour is worth 1.5 × $7.25 = $10.875. After the $5.12 tip credit, you pay at least $5.755 of it in cash wages (DOL Fact Sheet #15).

You don't have to take the tip credit. If you pay tipped staff the full $7.25 an hour, their tips are all on top, there's nothing to make up at the end of the week, and you can put kitchen staff in the tip pool (see below).

North Carolina's own tip-credit condition

For a business the state act covers, tips count toward the minimum wage only if you keep accurate and complete records of each employee's tips, certified by the employee monthly or for each pay period (G.S. 95-25.3). If an employee won't certify, you can still count tips when you meet the other conditions and can show, by monitoring tips, that the employee regularly gets tips in the amount you credit.

What you must pay non-tipped staff in North Carolina

Cooks, dishwashers, prep cooks, and cashiers or counter staff who don't get tips are paid like any other hourly employee:

  • At least $7.25 an hour for every hour worked (NCDOL, minimum wage). No tip credit applies.
  • The same goes for a tipped employee's hours in a non-tipped job, like a server's prep shift (DOL Fact Sheet #15).
  • Overtime is at least 1.5 times their regular rate for hours over 40 in a workweek. At $7.25 an hour, that's $10.875 (G.S. 95-25.4).
  • Can they share in the tip pool? For an employer the FLSA covers, only if you take no tip credit and pay everyone in the pool at least the full minimum wage; with a tip credit, a pool you require can include only staff who customarily and regularly receive tips (US DOL, tips). For a business the state act covers, North Carolina allows pooling only among employees who customarily and regularly receive tips (G.S. 95-25.3). Managers and supervisors can never take from the pool.

Worked examples (made-up numbers)

The names, hours and tips below are made up. The rates are North Carolina's as of September 16, 2026.

A server's week: when you have to top up

Sam is a server paid the $2.13 cash wage. He works 26 hours in each of two weeks: a busy one with $380.00 in tips and a slow one with $80.00.


Busy week

Slow week

Hours worked

26

26

Cash wages (26 × $2.13)

$55.38

$55.38

Tips received

$380.00

$80.00

Cash wages + tips

$435.38

$135.38

Minimum for the week (26 × $7.25)

$188.50

$188.50

You pay on top

$0.00

$53.12

In the slow week, $80.00 in tips covers only part of the $133.12 tip credit (26 × $5.12), so you pay the difference by the regular payday: $188.50 − $135.38 = $53.12. In the busy week you owe nothing extra, and every dollar of tips is still Sam's.

A cook's week with overtime

Ana is a line cook paid the North Carolina minimum wage, $7.25 an hour. Over five days she works 10, 9, 9, 8 and 9 hours: 45 hours in all.


Hours

Rate

Pay

Regular hours

40

$7.25

$290.00

Overtime hours (over 40)

5

$10.875 (1.5 × $7.25)

$54.38

Total

45


$344.38

Overtime is counted by the workweek, and hours can't be averaged across two weeks: a long week earns overtime even if the next one is short (US DOL, overtime). Bonuses can change the rate too; see Time clock, breaks and overtime: first-month payroll mistakes to avoid.

Tip pooling rules in North Carolina

North Carolina has its own tip-pool rules (NCDOL, minimum wage): In businesses the North Carolina Department of Labor covers for minimum wage (generally those with less than $500,000 in gross sales), tip pooling is allowed as long as tipped employees keep at least 85 percent of the tips they receive.

For an employer the federal Fair Labor Standards Act covers, federal rules apply (US DOL, tips):

  • The business, its managers and supervisors never keep employees' tips. A manager can't take anything from a pool; they may keep only tips for service they directly and solely provide. An owner with a real stake who helps run the business counts as a manager too.
  • With a tip credit, a pool you require can include only staff who customarily and regularly receive tips: servers, bartenders, bussers, counter staff who serve customers.
  • Without a tip credit, when everyone in the pool gets at least the full minimum wage, you can include cooks and dishwashers.
  • Card fees: you may reduce a card tip by the percentage the card company actually charges you, and no more (DOL Fact Sheet #15).
  • Service charges aren't tips. Money you share with staff from a mandatory service charge is wages, and it counts in the regular rate for overtime (DOL Fact Sheet #15).
  • Pay pooled tips out by the regular payday for the week or pay period (DOL Fact Sheet #15).

North Carolina's statute also allows pooling only among employees who customarily and regularly receive tips, and no employee's tips may be reduced by more than 15 percent under a pooling arrangement (G.S. 95-25.3). Like the 85 percent rule, it binds only an employer the FLSA doesn't cover.

How to split a pool fairly, with a worked example: Tip pooling for new restaurant owners.

Overtime in North Carolina

North Carolina's overtime law draws the same line as the federal one (G.S. 95-25.4): non-exempt employees get at least 1.5 times their regular rate for hours over 40 in a workweek (US DOL, overtime).

A workweek is any fixed, recurring stretch of seven days that you choose, and hours can't be averaged across two weeks. There's no daily overtime, no double time and no seventh-day premium under North Carolina or federal law, and weekend or holiday hours don't earn a premium by law.

For tipped staff, overtime is figured on the full minimum wage, not the cash wage (see the tipped section above).

Breaks in North Carolina

  • Meal breaks: No specific North Carolina rule found — federal rules apply (NCDOL, breaks). The FLSA does not require meal periods. A bona fide meal period (typically 30+ minutes) is not work time (US DOL, breaks).
  • Rest breaks: No specific North Carolina rule found — federal rules apply (NCDOL, breaks). The FLSA does not require breaks. Short breaks an employer offers (about 5 to 20 minutes) are paid work time (US DOL, breaks).
  • Minors: Under 16: at least a 30-minute break after five hours of work, and a break shorter than 30 minutes doesn't interrupt the five hours. NCDOL says this rule generally applies only to enterprises with gross sales or receipts of less than $500,000 a year and to private nonprofits. No break is required at 16 or older (NCDOL, breaks).

Other North Carolina rules that affect pay

  • Paid sick leave: No specific North Carolina rule found — federal rules apply (NCDOL, wage benefits). No federal paid sick leave requirement. The FMLA provides unpaid, job-protected leave (up to 12 weeks) where it applies (US DOL, sick leave).
  • Food handler training: A certified food protection manager is required, not a card for every employee. Who: the person in charge must be a certified food protection manager (NC Food Code).

Rules that apply even if the FLSA covers you

  • Tips on the regular payday. Every employer pays each employee all the wages and tips they've earned on the regular payday (G.S. 95-25.6).
  • Pay promises in writing. Tell employees in writing when you hire them what you will pay and the day and place of payment, keep your pay policies available in writing or on a posted notice, and give written notice at least one pay period before you change promised wages; a raise can be made retroactive without it (G.S. 95-25.13).
  • Final pay. Someone who leaves is paid everything due on or before the next regular payday (G.S. 95-25.7).
  • No alcohol service under 18. At a restaurant with an on-premises ABC permit, nobody under 18 may prepare, serve, dispense or sell alcoholic beverages (G.S. 95-25.5).

Local rates in North Carolina

North Carolina law bars cities and counties from requiring private employers to pay a minimum wage other than the state or federal one, or to provide employment benefits, such as paid sick leave, that state or federal law doesn't require (G.S. 95-25.1). The same law reaches local rules on hours of labor and on paying earned wages; its exceptions cover a local government's own employees, economic development incentives and a few named programs. So the state's $7.25 minimum wage applies everywhere in North Carolina, and there's no local rate table for North Carolina.

How Mays helps

Mays runs the schedule, time clock, tip pool and payroll export for each location. For North Carolina pay rules, that means:

  • Positions and wages. Give each position a default hourly wage, for example the tipped cash wage for servers and at least the minimum wage for cooks. Mays doesn't check wages against the minimum wage, so update them yourself when the rate changes.
  • A tip pool per location. Split pooled tips by hours worked, equally or by FTAR score, per pay period or day by day, and choose which positions receive. Until you choose, everyone who worked gets a share, cooks included, so if you take a tip credit, pick only tipped positions, and make sure every punch carries a position: once positions are picked, a punch without one gets no share. When you set it up, turn on Leave managers and admins out of the pool: it's off by default. The tips come from your connected POS at that location (Square) or from tips synced with 7shifts time punches, and each person's share appears in the Tip Payouts report and the payroll export.
  • The tip-credit make-up is yours to check. Mays doesn't compare a tipped employee's cash wages plus tips with the minimum wage, so check each workweek the way the server example above does.
  • Time clock and timesheets. Staff clock in on their phone, a shared kiosk or an NFC tag. Timesheets run by pay period, and overtime is counted by the workweek, with an optional daily threshold for states that have one.
  • Payroll export. A standard CSV or a Gusto-format CSV with regular and overtime hours and pooled tips for each employee.
  • Minors. Mays doesn't track minors' hours or breaks, so build a minor's meal break into their shifts when you schedule them.
  • Give the written notice before you change a wage. North Carolina wants it at least one pay period ahead (G.S. 95-25.13), so send it before you save a new wage for a position or an employee in Mays.

Sources

Every figure on this page comes from these official pages, as they read on the date shown.

This page is general information, not legal advice. Laws change, and coverage rules (your business's size, whether federal law covers you) decide which of them apply. Check the pages above, and ask an employment lawyer or accountant about your situation.

Run North Carolina payroll on the right numbers

Set each position's wage, turn on the tip pool with managers left out, and let the time clock count overtime by the workweek. Then payroll is an export, not an evening.

Start your free trial: 30 days, every module, no card needed. Setting up a tip pool? Read Tip pooling for new restaurant owners.