How much should you save for taxes on tips?

A safe rule of thumb is to set aside 20% to 30% of your tips for taxes. This calculator gets you a closer estimate using your state and income. It is a rough estimate to help you save, not tax advice.

Tips per week

$

Your stateHow you are paid

Set aside

Per week

$0

Per year (at this rate)

$0

Federal income (est.): 0%
FICA: 0%
State income (est.): 0%
Total rate: 0%

Estimate only. Consult a tax professional. Card tips are often reported through your employer; cash tips are the part people most forget to save for.

Tip: Tipfolio does this automatically from your logged shifts, tracks the running total to set aside, and exports a clean file at tax time.

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Do you pay taxes on tips?

Yes. Tips are taxable income, including cash tips. Card tips are usually reported to your employer and show up on your paycheck, but cash tips are your responsibility to track and report. Setting money aside as you go means no surprise bill later.

How the estimate works

This tool adds a rough federal income rate for your bracket, the FICA rate (the employee share for W-2 workers, or the full self-employment rate for gig workers), and an approximate effective state income-tax rate. It assumes your tips are your main income; if you also earn significant base wages, your real bracket could be higher. Your real rate depends on your full situation, so treat this as a savings guide.