Illinois Minimum Wage for Tipped Employees: Rates, Makeup Pay, and Overtime

In Illinois, the minimum wage for tipped employees is $9.00 per hour in direct cash wages as of January 1, 2025, which is 60% of the state’s $15.00 minimum wage.¹ Chicago is higher and climbing: $12.62 per hour as of July 1, 2025, on its way to the full city minimum wage by 2028.² Whatever cash wage your employer pays, your tips plus that wage have to add up to at least the full minimum wage for every hour worked. If they don’t, your employer owes the difference.

The Statewide $9.00 Rate

Illinois sets the tipped minimum through a formula, not a fixed dollar figure. Employers can claim a tip credit of up to 40% of the applicable minimum wage, leaving 60% as the mandatory cash wage.³ With the overall minimum now at $15.00 for workers 18 and older, that works out to $9.00 per hour in direct wages and $6.00 in tip credit.⁴ If the legislature raises the overall minimum wage in the future, the tipped rate moves with it automatically.

The $15.00 figure was the last step in a schedule of increases that began in 2020. There is no scheduled statewide increase beyond that at the moment, so $9.00 is the number to work with until the legislature acts again.

Workers Under 18

Minors who have not yet worked 650 hours for the same employer in a calendar year have their own base rate of $13.00 per hour.¹ Applying the same 40% tip credit produces a tipped cash wage of $7.80 per hour for those workers. Once the minor crosses 650 hours with that employer in the calendar year, the adult rate kicks in.

The First 90 Days

Any new adult employee can be paid up to $0.50 less than the standard minimum during the first 90 calendar days of employment.¹ For a tipped worker, that means the cash wage floor can drop to 60% of $14.50, or $8.70 per hour, for the introductory period. Day laborers and temporary workers are excluded from this reduced rate.

Chicago Is Higher — and Rising

Chicago is phasing out its tipped subminimum wage entirely under the city’s “One Fair Wage” ordinance. Every July 1, the tip credit shrinks, and in July 2028 it disappears. All employers with four or more workers follow the same schedule; the old split between large and small employers ended on July 1, 2024.⁵

July 1, 2024: tip credit capped at 32% of the Chicago minimum wage
July 1, 2025: tip credit capped at 24%
July 1, 2026: tip credit capped at 16%
July 1, 2027: tip credit capped at 8%
July 1, 2028: tip credit eliminated; tipped workers earn the full Chicago minimum

As of July 1, 2025, the Chicago tipped minimum wage is $12.62 per hour.² The full Chicago minimum wage adjusts each year with the Consumer Price Index, so the exact tipped dollar amount for 2026 and later depends on that annual calculation. The percentage structure is fixed by ordinance, though: starting July 1, 2026, tipped workers in Chicago must receive at least 84% of the city’s prevailing minimum wage.⁵

Cook County

Cook County’s tipped minimum wage currently matches the statewide floor at $9.00 per hour.⁶ The county ordinance covers unincorporated areas and municipalities that have not opted out, and many Cook County suburbs have opted out. The county recommends checking with your local city, township, or village government to confirm whether the ordinance applies at your workplace.⁷ If your municipality has opted out, the statewide $9.00 rate still applies.

Makeup Pay When Tips Fall Short

The reduced cash wage is only lawful if your tips bring you up to the full minimum wage for every hour on the clock. Every pay period, your employer has to add your actual tips to the cash wage it paid you and compare the total to the full minimum wage for the hours you worked. If the total falls short, the employer owes you the difference out of its own pocket.³

Here’s how the math works at the statewide rate. Say you worked 30 hours at the $9.00 tipped wage and received $140 in tips over that pay period. Your cash wages come to $270, and total compensation is $410. At $15.00 per hour, you were entitled to at least $450 for those 30 hours. Your employer owes you the $40 shortfall on your next paycheck.

An employer that wants to use the tip credit at all has to be able to show the Illinois Director of Labor “substantial evidence” of the tips the employee actually received during the pay period, and proof that none of those tips were returned to the employer.¹ That means real recordkeeping: daily tip reports, POS data, or signed tip declarations. Estimates don’t count.

When an employer skips the reconciliation and underpays, the Illinois Wage Payment and Collection Act adds damages of 5% of the underpayment for every month the money remains unpaid, with no cap on how long those damages run.⁸ An employee who sues can also recover attorney’s fees. A lot of wage theft claims start right here, with an employer who never bothered to run the numbers.

Overtime for Tipped Workers

Tipped workers get overtime at 1.5 times the full minimum wage, not 1.5 times the reduced tipped rate.⁹ Statewide, the overtime rate is $22.50 per hour. The employer can still take the tip credit during overtime hours, so the cash wage obligation per overtime hour is $22.50 minus the $6.00 credit, or $16.50. Tips still have to bring total compensation up to $22.50 per hour; if they don’t, the same reconciliation rule applies.

In Chicago, the credit is smaller, so the employer’s direct cash share during overtime is correspondingly higher. An employer that applies the statewide 40% credit to a Chicago overtime calculation is underpaying, and the 5% monthly penalty starts accruing on the shortfall from that pay period forward.

Who Counts as a Tipped Employee

Illinois law doesn’t set a specific dollar threshold. The statute reaches workers “engaged in an occupation in which gratuities have customarily and usually constituted and have been recognized as part of the remuneration.”¹ In practice, that covers servers, bartenders, valets, delivery drivers, baristas at tip-accepting counters, and similar roles. If tips are only occasional in your job, your employer cannot use the tipped rate at all and owes the full minimum wage.

Federal law adds a dollar benchmark: an employee who “customarily and regularly receives more than $30 a month” in tips.¹⁰ Because federal law is a floor, that $30 figure is a useful reference point in Illinois too.

Under federal law your employer also has to tell you, before taking the credit, that it is doing so, how much it is claiming, and that you keep all your tips beyond any lawful pooling arrangement. Skip the notice and the employer forfeits the credit entirely, which means it owes the full minimum wage for every hour worked.

If You’re Being Paid Less

If your paycheck isn’t adding up to at least the full minimum wage for every hour worked, you have two options. You can file a wage claim with the Illinois Department of Labor through its online portal at labor.illinois.gov/unpaidwages; online claims move faster than paper filings.¹¹ You will need to set up an Illinois Public ID account first. Pull together your pay stubs, schedules, and any tip records you kept, whether that’s daily tip-out sheets, POS receipts, or a personal log.

The other route is a private civil lawsuit, which lets you recover attorney’s fees along with the unpaid wages and the 5% monthly penalty.⁸ Many employment attorneys take wage cases on contingency because of the fee-shifting provision. You can’t pursue both the Department of Labor claim and a lawsuit for the same unpaid wages, so pick one path and commit to it.

1
Illinois General Assembly. Illinois Compiled Statutes 820 ILCS 105/4
2
City of Chicago. Minimum Wage
3
Illinois Department of Labor. Minimum Wage Law
4
Justia Law. Illinois Code 820 ILCS 105 – Minimum Wage Law
5
City of Chicago. Chicago Office of Labor Standards Minimum Wage Fact Sheet
6
Cook County. Cook County Issues Notice to Minimum Wage Ordinance
7
Cook County. Minimum Wage Ordinance and Regulations
8
Illinois Department of Labor. Wage Payment and Collection Act Penalties
9
U.S. Department of Labor. Fact Sheet 15 – Tipped Employees Under the Fair Labor Standards Act
10
U.S. Department of Labor. Minimum Wages for Tipped Employees
11
Illinois Department of Labor. Unpaid Wages