Minimum Wage for Tipped Employees in Illinois: Rates and Tip Credit

If you work for tips in Illinois, your employer must pay you at least $9.00 per hour in direct wages, and your tips must bring your total to at least $15.00 per hour. If they don’t, your employer owes you the difference for that pay period. That is the minimum wage for tipped employees in Illinois as of January 1, 2025, and it applies statewide unless a local ordinance sets something higher.¹ Chicago and parts of Cook County do exactly that, and Chicago is phasing tipped sub-minimum pay out entirely by 2028.

The Statewide Rates

Illinois finished its multi-year minimum wage climb on January 1, 2025. The rates now in force:

Standard minimum wage for workers 18 and older: $15.00 per hour
Tipped minimum wage for workers 18 and older: $9.00 per hour in direct cash, with tips expected to cover the remaining $6.00
Youth rate (under 18, fewer than 650 hours in the calendar year): $13.00 per hour

The $9.00 figure reflects a maximum 40% tip credit against the $15.00 floor.² Whether a worker qualifies as tipped depends on the occupation, not on hitting a monthly tip total. Illinois looks at whether tips have “customarily and usually constituted” part of the pay for that kind of work: servers, bartenders, valets, bellhops, hairdressers, and similar roles.

Training Wage for New Hires

Tipped workers 18 and older who are new to the job can be paid a training rate for their first 90 days. With the tip credit applied, the training rate is $9.00 per hour. Without the tip credit, it is $14.50 per hour. After 90 days, the full applicable rate kicks in.³

Workers Under 18

If you are under 18 and have worked fewer than 650 hours during the calendar year, your floor is $13.00 per hour. Cross that 650-hour line and the adult $15.00 rate takes over for the rest of the year. The 40% tip credit still applies to whichever rate governs.¹

Chicago Pays More, and Is Phasing the Tip Credit Out

Chicago sets its own minimum wage for employers with four or more workers, adjusting each July 1 based on the Consumer Price Index (capped at 2.5%). As of July 1, 2025, the tipped minimum wage in Chicago is $12.62 per hour, and the standard minimum is $16.60 per hour.⁴ Employers with fewer than four workers follow state rates.

Under the One Fair Wage Ordinance passed in October 2023, Chicago’s tip credit shrinks by 8 percentage points each year until it disappears:⁵

July 1, 2024: tip credit capped at 32%
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: no tip credit; tipped workers earn the full Chicago minimum

Once the phase-out finishes, every tipped worker in Chicago will receive the same base hourly rate as non-tipped workers, and tips will sit entirely on top.⁶

Cook County

Cook County has its own minimum wage ordinance. As of July 1, 2025, the tipped minimum wage in participating municipalities is $9.00 per hour.⁷ Some suburban municipalities have opted out and follow the state rates. If you’re not sure which applies to your workplace, check with your municipality or the Cook County Bureau of Economic Development.

How the Tip Credit Actually Works

The tip credit is what lets your employer pay less than the full minimum wage in cash. Under Illinois law it caps at 40% of the applicable minimum, which is where the $9.00 direct-wage figure comes from at the state level.

The rule that matters most on any given shift: your employer has to check every pay period that your tips actually filled the gap. Slow Tuesday, dead brunch, weather-killed patio night — whatever the reason, if your cash wage plus tips falls below $15.00 per hour (or the applicable local floor), the employer has to pay the shortfall.³ Make-up pay is required, not discretionary.

Illinois also requires the employer to produce “substantial evidence” that the claimed tips were actually received during the pay period.² An estimate based on typical receipts won’t satisfy the rule. If the employer can’t back up the number, the credit doesn’t apply and full minimum wage is owed.

Federal law adds a notice rule. Before applying any tip credit, your employer must tell you the direct cash wage they’ll pay, the credit amount they’re claiming, and that you keep all your tips except through a valid tip pool.⁸ Skip the notice, lose the credit.

Tip Pools and Service Charges

Illinois employers can require tipped workers to share tips through a pool. Participation is limited to employees who regularly receive tips, meaning servers, bartenders, bussers, and other front-of-house staff. Managers, supervisors, and owners cannot take a cut of the pool, even if they worked a section during the shift. A manager who personally and solely served a customer may keep a tip left specifically for them, but that money stays out of the pool.⁹ Employers must notify workers of the pool arrangement and the required contribution amount. Diverting pooled tips to ineligible staff, or failing to give notice, forfeits the tip credit.

Service charges are a separate category. That automatic 18% gratuity on a large party, banquet fees, bottle service charges, and hotel room service fees are not tips under IRS rules — they belong to the employer.¹⁰ If the employer chooses to pass some along to you, that money counts as regular wages. It cannot be used to satisfy the tip credit, and it has to be included in your overtime rate calculation.

Overtime for Tipped Workers

Any hours over 40 in a workweek must be paid at one and a half times your regular rate.³ The overtime calculation starts from the full minimum wage, not the tipped cash wage. At the state level: $15.00 times 1.5 equals $22.50; subtract the $6.00 tip credit and the employer’s direct cash obligation per overtime hour is $16.50. Your tips are still expected to cover the credit portion, and the same shortfall rule applies if they don’t.

Uniform and Equipment Deductions

Illinois bars employers from deducting the cost of a required uniform (or cleaning it) from your wages without your express written consent, given freely at the time of the deduction.¹¹ “Uniform” covers any distinctive outfit or accessory tied to a specific employer: branded shirts, logoed aprons, and the like. General clothing requirements (black pants, white shirt) don’t count as a uniform, unless the employer forces you to buy them from a designated vendor, which turns them back into a uniform for deduction purposes. Federal law separately bars any deduction for register shortages, walkouts, or breakage that would drop your effective pay below minimum wage.

If You’re Being Underpaid

File a wage claim with the Illinois Department of Labor. The fastest route is the department’s online portal, which requires an Illinois Public ID account. Mail and fax submissions are accepted but take substantially longer.¹² Pull together your pay stubs, time records, and any documentation of your tips before you file.

The financial exposure for employers is real. An underpaid worker can sue for triple the unpaid wages, plus attorney’s fees and court costs.¹³ An employer who shorted you $2,000 could owe $6,000 plus legal fees. Under the Wage Payment and Collection Act, employers who fail to pay after a Department order face an added 20% penalty to the state and 1% per day of the underpayment owed to you until the balance clears.¹⁴ Retaliation against a worker who files a complaint or testifies in a wage investigation is prohibited.

1
Illinois Department of Labor. Minimum Wage Law
2
Illinois General Assembly. Illinois Compiled Statutes 820 ILCS 105/4
3
Illinois Department of Labor. Minimum Wage/Overtime FAQ
4
City of Chicago. Minimum Wage
5
City of Chicago. Mayor Brandon Johnson’s Historic Paid Time Off, One Fair Wage Ordinance
6
City of Chicago. Chicago Office of Labor Standards – Minimum Wage Fact Sheet
7
Cook County Government. Minimum Wage Ordinance and Regulations
8
U.S. Department of Labor. Fact Sheet 15 – Tipped Employees Under the Fair Labor Standards Act
9
U.S. Department of Labor. Fact Sheet 15 – Tipped Employees Under the Fair Labor Standards Act – Section: Employers, Including Managers and Supervisors, May Not Keep Tips
10
Internal Revenue Service. Tips Versus Service Charges – How to Report
11
Legal Information Institute. Illinois Admin Code Title 56, Section 300.840 – Uniforms Required by an Employer
12
Illinois Department of Labor. Unpaid Wages
13
Illinois General Assembly. Illinois Compiled Statutes 820 ILCS 105/12
14
Illinois Department of Labor. Wage Payment and Collection Act Penalties