No Tax on Tips Calculator

Use this free No Tax on Tips calculator to estimate your qualified-tips deduction (up to $25,000) and potential federal income-tax savings under the 2025 law. It's an illustration, not tax advice.

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    No Tax on Tips: common questions

    Is there really no tax on tips?

    Not entirely. The 2025 “No Tax on Tips” provision (One Big Beautiful Bill Act) lets eligible workers deduct up to $25,000 of qualified tip income from federal income tax for 2025–2028. Social Security and Medicare (FICA) taxes still apply, and state income tax may too.

    How much can I deduct under No Tax on Tips?

    Up to $25,000 of qualified tips per year. The deduction phases out once modified adjusted gross income passes $150,000 (single) or $300,000 (married filing jointly).

    Who qualifies for the No Tax on Tips deduction?

    Workers in occupations that customarily and regularly received tips on or before December 31, 2024 — servers, bartenders, hairstylists, delivery drivers and similar tipped roles. Tips must be reported to your employer or the IRS.

    Do I still pay Social Security and Medicare on tips?

    Yes. The deduction only reduces federal income tax. FICA (7.65%) still applies to your tips, and your employer reports them on your W-2.

    Learn more: Who qualifies · Income limits · Employer guide