this post was submitted on 27 Jun 2026
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For servers in the US specifically it's not true that it's something extra, it's become an expected part of their compensation structure. They have a special, lower minimum wage they're allowed to be paid. (If tips don't cover the difference between that and minimum wage, they still have to be paid minimum wage.)
Sorry, on this parenthetical, for non-Americans, can you clarify?
Servers are paid less than minimum wage, but if they don’t get tips enough to cover the delta, they are paid minimum wage?
So does it go to the employer to cover your wage, address tips reported for tax, etc? Are there any repercussions if a server is consistently not tipped? Can they fire you?
It varies by state, some do require servers to be paid minimum wage and don't have this weird exception. The ones day do allow them to be paid something like $2 an hour instead of $7.25 (I forget the exact numbers). Then if they don't make enough in tips so their "effective" hourly pay for the day is minimum wage, then the employer had to cover the difference.
Tips are reported as taxable income. I'm sure many servers take cash tips and don't, but that's between them and the IRS. Assuming everyone is behaving, yes, tips are taxable income just like "normal" income. (Even income from illegal activities is considered taxable.)
Repercussions for not getting tips? Maybe. I haven't been a server. I'm sure it can happen, I'm not sure how often it does. As for can they fire you? Yeah, most likely. Every state but one has what's called "at will employment" which gives workers the "benefit" (lol) of being able to quit whenever, but also let's employers fire you for any reason (apart from a very small number of things like discrimination).
Basically, say you work one hour. Minimum wage is $7.25. The server minimum is $2. You make $3 in tips. Your employer would need to cover the additional $2.25.
A lot of this is effectively moot since minimum wage has stagnated so far behind inflation. I think a lot of places are already offering above minimum wage for their lowest paid workers, but I'm not sure if that includes servers.