Illinois Tipped Wage & Tip Credit Calculator
Audit statutory employer cash wage floors ($9.00 statewide, $12.96 in Chicago, and $9.25 in Cook County as of July 1, 2026), tip credit limits, mandatory employer top-up pay, and tipped overtime rates.
Illinois Tipped Wage Law & Tip Credit Mechanics
Under 820 ILCS 105/4(c), Illinois permits employers of tipped employees to claim a tip credit against the statutory minimum wage, provided the credit does not exceed 40% of the applicable minimum wage rate. This establishes a mandatory 60% direct cash wage floor ($9.00 statewide in 2026).
Statewide Illinois
$9.00 Cash Floor
Full Min: $15.00 • Max Credit: $6.00
Chicago (July 1, 2026)
$12.96 Cash Floor
Full Min: $17.05 • Max Credit: $4.09
Cook County (July 1, 2026)
$9.25 Cash Floor
Full Min: $15.40 • Max Credit: $6.15
The Mandatory Employer Top-Up Obligation
Under both 820 ILCS 105/4(c) and 29 C.F.R. § 531.59, if an employee’s combined cash wages and actual retained tips do not equal at least the full applicable minimum wage for all hours worked during the workweek, the employer must pay the difference directly in cash. Customer tips cannot be averaged across pay periods to conceal single-week deficits.
Tipped Overtime Rate Calculation
A common payroll violation is multiplying the tipped cash wage by 1.5 (e.g. $9.00 × 1.5 = $13.50). This violates federal and state law. Under 29 C.F.R. § 531.60 and Cook County guidance, overtime is calculated on the full statutory regular rate minus the allowable tip credit. In Cook County, official guidance publishes an exact statutory minimum overtime cash rate of $16.94 per hour ($15.40 × 1.5 = $23.10; $23.10 − $6.15 credit = $16.94).