No Tax on Tips Calculator for Pennsylvania (2026)
Calculate how much Pennsylvania workers save now that tips are exempt from federal income tax under the OBBBA.
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Your Annual Tax Savings in Pennsylvania
Tips Tax Exemption in Pennsylvania
Under the One Big Beautiful Bill Act (OBBBA), workers in Pennsylvania who earn tips can deduct 100% of their tip income from federal income tax for tax years 2025 through 2028.
Pennsylvania Minimum Wage for Tipped Workers
The minimum wage in Pennsylvania is $7.25/hour. Tipped workers may be paid a lower base wage of $2.83/hour, with tips expected to make up the difference. This makes the federal tip tax exemption especially valuable for Pennsylvania workers.
Top Tipped Industries in Pennsylvania
- Restaurant servers
- Bartenders
- Hotel staff
- Casino dealers
State Income Tax Applies
Pennsylvania has a state income tax rate of 3.1%. While the OBBBA exempts tips from federal income tax, Pennsylvania may still tax tip income at the state level. Check with a local tax professional for details.
How the No Tax on Tips Law Works
What Qualifies
- Cash tips received directly from customers
- Credit/debit card tips
- Tips from tip pools or tip sharing
- Service charges distributed as tips
What Doesn't Change
- FICA taxes still apply: You still pay 6.2% Social Security + 1.45% Medicare on tip income
- Tips must still be reported: Report all tips to your employer and on your tax return
- Income limit: The exemption applies to workers earning less than $160,000 per year
Federal Calculators
Compare with the federal-level tools: Tip Tax Savings (Federal) | Overtime Tax Savings (Federal)