NJRHA Advocacy Resource
Understanding New Jersey’s Tipped Wage
New Jersey’s tip credit allows tipped employees to earn wages and tips while guaranteeing that their total hourly earnings meet or exceed the state minimum wage.
HOW THE TIP CREDIT WORKS VIEW EMPLOYEE SURVEYAt a Glance
Tipped Work in New Jersey
|
$24.16
Average hourly wage for New Jersey waiters and waitresses NJDOL 2025 Occupational Employment and Wage Estimates |
$15.92
New Jersey minimum wage for most employees in 2026 Effective January 1, 2026 |
$6.05
Minimum cash wage for tipped employees when an employer takes the tip credit 2026 tipped cash wage |
What Employees Earn
NJ Servers Earn Above Minimum Wage on Average
According to the New Jersey Department of Labor and Workforce Development’s 2025 Occupational Employment and Wage Estimates, waiters and waitresses in New Jersey earn an average of $24.16 per hour, compared with New Jersey’s 2026 minimum wage of $15.92 per hour for most workers.
|
Average Server Wage $24.16
per hour |
VS.
|
2026 Minimum Wage $15.92
per hour |
Tip Wage 101
How the Tip Credit Works
The tip credit does not reduce an employee’s minimum wage protection. It allows an employer to count a portion of an employee’s tips toward meeting the required minimum wage.
|
01
Employer Pays a Cash WageAn employer taking the tip credit must pay a tipped employee at least $6.05 per hour directly in cash wages. |
02
Employee Earns TipsTips earned from customers are added to the employee’s cash wage. |
03
Minimum Wage Is GuaranteedThe employee’s cash wage plus tips must equal at least New Jersey’s full $15.92 hourly minimum wage. |
04
Employer Covers Any ShortfallIf wages and tips do not reach $15.92 per hour, the employer is legally required to pay the difference. |
2026 Rates
Understanding the $9.87 Tip Credit
| 2026 New Jersey minimum wage | $15.92 |
| Maximum tip credit | $9.87 |
| Minimum cash wage paid by employer | $6.05 |
The $6.05 cash wage is not the employee’s total wage. Tips are added to that amount, and the employee must receive at least $15.92 per hour in total earnings. If they do not, the employer must make up the difference.
|
88%
Prefer the current compensation system |
Hear From Employees What NJ’s Tipped Workforce SaysIn NJRHA’s 2025 statewide survey of 394 tipped employees, 88% preferred the current compensation system with a lower base wage plus tips and greater earning potential. VIEW SURVEY RESULTS |
Compliance & Worker Protections