Texas tipped workers earn $2.13 cash — but cash + tips must reach $7.25.
Texas adopts the federal tip credit structure: $2.13 cash wage, with tips counted up to $5.12 toward the $7.25 floor. If tips fall short of bringing total compensation to $7.25, the employer owes the difference. Get the reconciliation wrong and a single shortfall can void the entire tip credit for that worker.
Tipped Wage Shortfall Reconciliation
Calculates whether each tipped worker's cash wage plus declared tips reaches $7.25 each workweek. If short, automatically adds make-up pay to the next paycheck. Logs tip-pool composition for audit.
What those rules do when tips don't reach the floor.
The hero card configuration: Critical on shortfalls, Flag on the make-up line, Block on illegal tip-pool composition.
When a tipped worker's cash wage plus reported tips falls below $7.25 for the workweek, payroll close surfaces a Critical indicator with the exact dollar shortfall. Close requires acknowledgment.
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.
Federal law (and TX adoption) prohibits managers and supervisors from participating in tip pools. When an admin tries to add a manager-tagged worker to a tip pool, the action is blocked at the source.
Deploy tip reconciliation in your Teambridge.
Tell us about your tipped Texas workforce. We'll spin up tip-credit reconciliation alongside the other 13 Texas policies in a sandbox tenant.
Cash plus tips, every workweek, every worker.
The reconciliation must happen each workweek — not biweekly, not monthly, not 'on average.' Each tipped worker's effective hourly rate must reach $7.25 for the workweek as a whole.
Workweek-level reconciliation
Tip credit math is calculated per workweek, not per shift or per pay period. A worker who earned strong tips on Saturday cannot use those to cover a slow Wednesday in the same workweek — that math works automatically since they're in the same week. But across two workweeks (which can fall in one biweekly pay period), each week stands alone.
Manager/supervisor exclusion
Managers and supervisors cannot participate in tip pools or retain any portion of employee tips, regardless of whether a tip credit is claimed. Including a manager in a tip pool voids the entire tip credit and exposes the employer to back-wage claims plus liquidated damages under federal law.
Teambridge reconciles every tipped worker, every workweek.
Tip-credit reconciliation is the kind of math nobody wants to do manually — and few payroll systems do correctly without prompting.
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 the effective hourly rate for the workweek.
Cash + tips ≥ $7.25 verified.
At end of each workweek, Teambridge verifies cash wage + declared tips reaches the $7.25 floor for total hours worked. Shortfalls surface as Critical.
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.
Manager exclusion enforced at source.
Tip pools route through Teambridge with role-based eligibility. A worker tagged as manager or supervisor cannot be added — the system blocks the action and explains why.
Still evaluating? Get a free Texas compliance audit.
Send us your existing Texas scheduling and pay configuration. Our compliance team returns a written audit within 5 business days — every Texas-specific exposure ranked by risk and back-pay liability.