It's well known that restaurant workers like waitstaff and bartenders often rely on tips to make a living.
That's because the minimum wage for workers who are expected to earn tips is significantly lower than the regular minimum wage. The federal minimum wage is $7.15 an hour, while the minimum tipped workers can be paid hourly is $2.13.
Employers must make up the difference if your tips don't bring your hourly wage up to at least the minimum, but nationally, tips make up an average of about 23% of restaurant workers' total income, according to newly released Square data.
Here's the average percentage of restaurant workers' incomes from tips in every U.S. state as of September 2024, according to Square:
It's important to note that minimum wage varies by state, and five states — Alabama, Louisiana, Mississippi, South Carolina and Tennessee — have no minimum. Georgia and Wyoming both have minimum wages lower than the federal minimum, so the federal minimum applies to workers in these states.
It makes sense, then, that the state where tips make up the highest share of restaurant workers' incomes is Wyoming, with an average of 33%, according to Square.
Money Report
Restaurant workers in Wyoming earn an average of $11.09 per hour, plus $5.34 in tips, according to Square data. And as of 2024, customers tip an average of 16%, which is slightly lower than last year's average.
Workers earn a few more dollars per hour on average in South Dakota, Alaska and Kansas, but those are the only other states where tips make up at least 30% of their incomes.
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Tipping has become somewhat of a controversial topic in recent years, with 35% of Americans saying tipping culture has gotten out of hand, according to a recent Bankrate survey.
Consumers feel like they're faced with the question of whether to tip more frequently, and often on electronic screens with pre-determined amounts, Bankrate found. While many Americans are used to tipping on their bill at sit-down restaurants, there seems to be less of a consensus on tipping for services like food delivery, hotel housekeeping and rideshares.
Still, it can be incredibly difficult for individuals like restaurant workers to get by on minimum wage.
In Wyoming, for example, a single person with no children would need to earn about $21 an hour to be able to afford basic necessities like housing, food and transportation, according to MIT's living wage calculator. The minimum wage in Wyoming is even lower than the federal rate at $5.15 an hour, but workers there are required to earn at least the federal wage of $7.25.
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