Colorado · Wages · Updated April 2026

Tipped workers must always earn the full minimum wage.

Colorado allows employers to claim a tip credit — paying tipped workers $12.14 cash per hour and counting tips toward the $15.16 state minimum. But if tips fall short, the employer owes the difference. Local jurisdictions (Denver, Edgewater, Boulder County) layer their own rates on top.

State Tipped
$12.14
Max Tip Credit
$3.02
Authority
COMPS #40
Active

Tipped Wage Shortfall Reconciliation

Calculates whether each tipped worker's cash wage plus tips reaches the applicable minimum wage for every pay period. If short, automatically reconciles the difference on payroll close.

Surface shortfall on payroll close
Auto-add reconciling pay to bring to minimum
Always running

What those rules do when tips don't reach minimum.

The hero card configuration: Critical on payroll close shortfalls, Flag on the timesheet for the make-up pay. Here's what each does at runtime.

Critical · on payroll close shortfalls

When a tipped worker's cash wage plus reported tips falls below the applicable minimum, payroll close surfaces a Critical indicator. "Worker shortfall: $X owed to bring to minimum wage." Close requires acknowledgment.

Flag · on the make-up pay line

The reconciling amount auto-adds to the timesheet as a separate Flag-tagged line: "Tip credit make-up." Payroll runs the line at full minimum without manual input.

Skip the configuration

Deploy tip reconciliation in your Teambridge.

Tell us about your tipped workforce. We'll spin up tip credit reconciliation — alongside the other 17 Colorado policies — in a sandbox tenant.

Or book a 30-min walkthrough. We respond within 4 business hours.

The rule, plainly stated

Cash plus tips, every pay period, every worker.

The reconciliation must happen each pay period — not annually, not 'on average.' Each tipped worker's effective hourly rate must reach the applicable minimum.

7 CCR 1103-1, COMPS Order #40, Rule 3: An employer who customarily and regularly receives tips may pay a cash wage of the tipped minimum wage if the tips received plus the cash wage equal at least the full minimum wage. If tips received do not bring the cash wage to the full minimum, the employer shall pay the difference.

The reconciliation period

Each pay period stands alone for reconciliation. A worker who earned strong tips Saturday cannot use those to cover a shortfall on Wednesday's slow shift if those days are in different pay periods.

Local rate adjustments

Tip credit math changes by jurisdiction. Denver's tipped minimum is $16.27 (vs $19.29 minimum). Edgewater's is $13.50 (vs $18.17). Boulder County has its own rate. Each jurisdiction's reconciliation must use that jurisdiction's full minimum.

On autopilot

Teambridge reconciles tip credits per pay period, per jurisdiction, automatically.

Tip reconciliation is the kind of math nobody wants to do manually — and nobody does it correctly when they try.

01 · Tip declaration

Real-time tip totals tracked.

Tipped workers declare tips through the worker app at end of shift. The total combines with cash wage to compute effective hourly rate.

02 · Per-jurisdiction reconciliation

Local rate determines the floor.

If the shift was in Denver, reconciliation targets $19.29. If Edgewater, $18.17. If state-only, $15.16. The applicable floor is determined per shift segment.

03 · Pay-period close

Shortfalls surface as Critical.

On pay-period close, any worker whose cash + tips fell short surfaces with the exact dollar amount owed. The close report shows the reconciliation calculation.

04 · Auto make-up pay

Reconciling line added to the paycheck.

Teambridge adds a 'Tip credit make-up' line to the timesheet equal to the shortfall. Payroll processes it as standard wages on the regular paycheck.

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FAQ

People also ask.

What is Colorado's tip credit?
Colorado allows employers to pay tipped employees $12.14 cash per hour (state tipped minimum) and count up to $3.02 of tips toward the $15.16 state minimum. If tips don't bring total compensation to the full minimum, the employer pays the difference.
Does the tip credit apply in Denver?
Yes, but the math uses Denver's rates. Denver tipped minimum is $16.27 cash, with the same $3.02 tip credit cap (currently — HB 25-1208 may allow Denver to raise it). Reconciliation must reach Denver's $19.29 minimum.
How often must tip credits be reconciled?
Each pay period, separately. You cannot use a strong tip period to offset a weak one if they're in different pay periods. Each pay period stands alone.
What happens if my tip pool includes back-of-house workers?
Including non-tipped employees in a tip pool voids the entire tip credit. The employer then owes full minimum wage on every hour, not just the make-up amounts.
Did tip credit rules change in 2026?
Yes. Colorado HB 25-1208 (effective January 1, 2026) authorized local governments to set tip credit caps higher than the state's $3.02. Edgewater raised theirs to $4.67. Other municipalities may follow.
How does Teambridge handle tips that fall short?
On pay-period close, Teambridge calculates each tipped worker's effective hourly rate (cash + declared tips ÷ hours). Workers below the applicable minimum surface with the exact shortfall. Teambridge adds a make-up pay line automatically.