Guides

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

Mays TeamAugust 12, 2026
The Labor Summary for a pay period in Mays: a line cook at $7.25 an hour whose week is split into regular and overtime hours and pay, and a server paid the $2.13 cash wage

Texas has its own minimum wage law, but it copies the federal one: it sets the same $7.25, and it doesn't apply at all to a job the federal Fair Labor Standards Act (FLSA) covers (TWC, minimum wage). 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). So for many Texas restaurants the figures that count are the federal ones, which Texas repeats anyway: $7.25 an hour, a $2.13 cash wage for tipped staff, and overtime after 40 hours in a week.

This page puts Texas'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. Texas'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.

Texas pay rules at a glance

As of August 12, 2026:

Rule

Texas

Minimum wage

$7.25 an hour, since July 24, 2009

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 Texas 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 Texas or federal law

Next change

None scheduled

Sources: TWC, minimum wage; US DOL, tipped wages by state; Texas Labor Code ch. 62; US DOL, overtime; US DOL, state meal periods; US DOL, state rest periods.

Which law you are under

The Texas act and the FLSA set the same wage figures. They differ on who counts as tipped, and Texas has no overtime law of its own, so an employer outside the FLSA owes no overtime under Texas law (Texas Labor Code ch. 62; US DOL, state minimum wage laws):


Covered by the FLSA

Not covered by the FLSA

Law that sets your pay floor

Federal Fair Labor Standards Act

Texas Minimum Wage Act

Minimum wage

$7.25 an hour

$7.25 an hour

Tipped cash wage

$2.13 an hour

$2.13 an hour

Counts as tipped

More than $30 a month in tips

More than $20 a month in tips

Overtime

1.5× the regular rate after 40 hours in a workweek

None required by Texas law

Who counts as a tipped employee in Texas

In Texas, a tipped employee is someone who customarily and regularly receives more than $20 a month in tips (Texas Labor Code ch. 62). 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 Texas

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 (US DOL, tipped wages by state).
  • 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).

What you must pay non-tipped staff in Texas

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 (TWC, 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 (US DOL, overtime).
  • Can they share in the tip pool? Only if you take no tip credit and pay everyone in the pool at least the full minimum wage. If you take a tip credit, a pool you require can include only staff who customarily and regularly receive tips (US DOL, tips). 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 Texas's as of August 12, 2026.

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

Sam is a server paid the $2.13 cash wage. He works 32 hours in each of two weeks: a busy one with $400.00 in tips and a slow one with $100.00.


Busy week

Slow week

Hours worked

32

32

Cash wages (32 × $2.13)

$68.16

$68.16

Tips received

$400.00

$100.00

Cash wages + tips

$468.16

$168.16

Minimum for the week (32 × $7.25)

$232.00

$232.00

You pay on top

$0.00

$63.84

In the slow week, $100.00 in tips covers only part of the $163.84 tip credit (32 × $5.12), so you pay the difference by the regular payday: $232.00 − $168.16 = $63.84. 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 Texas minimum wage, $7.25 an hour. She works five 9-hour days: 45 hours.


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 Texas

No specific Texas rule found — federal rules apply (TWC, tip pooling). Under federal law (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).

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

Overtime in Texas

Texas has no overtime law of its own (US DOL, state minimum wage laws), so the federal rule applies: 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 Texas 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 Texas

  • Meal breaks: No specific Texas rule found — federal rules apply (US DOL, state meal periods). 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 Texas rule found — federal rules apply (US DOL, state rest periods). The FLSA does not require breaks. Short breaks an employer offers (about 5 to 20 minutes) are paid work time (US DOL, breaks).
  • Minors: No separate Texas rule for minors; the adult rules above apply to them too (US DOL, state meal periods).

Other Texas rules that affect pay

  • Paid sick leave: No specific Texas rule found — federal rules apply (A Better Balance). 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: Every food employee needs approved food-safety training. Who: all food employees, within 30 days of employment (Texas DSHS).

Local rates in Texas

Texas law bars cities and counties from requiring private employers to pay a minimum wage other than the state or federal one (Texas Labor Code ch. 62). The one exception that could reach a restaurant: a city or county can still set the wage for work done under a contract or agreement with it. So the state's $7.25 minimum wage applies everywhere in Texas, and there's no local rate table for Texas.

How Mays helps

Mays runs the schedule, time clock, tip pool and payroll export for each location. For Texas 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.

Sources

Every figure on this page comes from these pages, as they read on the date shown. All are official government pages except A Better Balance's list of state paid sick leave laws, used here to confirm that Texas has no such law.

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 Texas 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.