--- title: "Can My Employer Take Card Fees Out of My Tips?" description: "DOL guidance says your employer can take the card company’s actual fee out of a card tip, and no more. The fee can’t push you below minimum wage." url: https://www.tipmaxapp.com/us/answers/credit-card-fees-taken-from-tips language: en publisher: TipMax (Entermaurs Incorporated) date_published: 2026-09-23 last_verified: 2026-09-23 --- # Can my employer take the credit card fee out of my tips? **Short answer:** **Yes, but only the actual fee.** DOL guidance says that when a customer tips on a card, your employer can take out the percentage the card company charges on that sale, and no more. Taking more than the fee counts as the employer keeping your tips. The fee also can’t push your pay below minimum wage. The trap: a mandatory service charge isn’t a tip, so none of this covers it. ## Example math Say the card company charges your employer **3%** on card sales (illustrative; the real rate is whatever your employer actually pays). A customer leaves you a **$200** tip on a card. 1. Fee the employer can take out of that tip: $200 × 0.03 = **$6**. 2. What you get: $200 − $6 = **$194**. 3. Now say the house takes a flat **5%** instead: $200 × 0.05 = $10. That’s **$4** more than the fee, and DOL guidance says the employer can’t reduce your tip by more than the fee. **Not tax or legal advice.** Both percentages are made up for the example. ## Plain English ### What DOL guidance allows Federal wage law, as DOL explains it, lets an employer that pays a card company a percentage on card sales pass that same percentage through on card tips. DOL’s own example: if the card company charges 3%, the employer may pay you 97% of the card tips. ### Where the line is DOL guidance says the employer can’t cut your tips by more than the actual transaction fee, whether or not it counts your tips toward your wage. Going past the fee counts as keeping your tips, which federal wage law bars. The fee also can’t bring your pay below the minimum wage. See [What can I do if my employer keeps part of our tips?](https://www.tipmaxapp.com/us/answers/employer-keeping-tips) ### This rule comes from guidance The card-fee rule is in DOL’s Fact Sheet #15, not in the tip regulation itself. DOL says its fact sheets are general information and not official statements of position. ### Service charges are a different thing Federal wage law says a compulsory service charge, like 15% of the bill, isn’t a tip, even if the house passes some of it to staff. It can count as wages instead. So the card-fee rule doesn’t apply to it. For how that plays out on your taxes, see [Does an auto-gratuity count as a tip?](https://www.tipmaxapp.com/us/answers/qualified-tips-vs-service-charges) Your state may have stricter rules. ## Common mistakes - Accepting a flat percentage that’s higher than what the card company actually charges. - Assuming the fee can come out of cash tips too. The guidance is about tips charged on cards. - Treating an auto-gratuity or service charge as a card tip. - Not checking your pay stub or tip report to see what was taken out. ## Official sources - [U.S. Department of Labor, Fact Sheet #15: Tipped Employees Under the FLSA (credit cards; service charges)](https://www.dol.gov/agencies/whd/fact-sheets/15-tipped-employees-flsa) - [29 CFR Part 531, Subpart D (531.55, service charges)](https://www.ecfr.gov/current/title-29/subtitle-B/chapter-V/subchapter-A/part-531/subpart-D) - [29 U.S.C. 203(m)(2)(B)](https://www.govinfo.gov/content/pkg/USCODE-2023-title29/html/USCODE-2023-title29-chap8-sec203.htm) ## Last verified September 23, 2026. Checked the credit card and service charge sections of DOL Fact Sheet #15, and 29 CFR 531.55. **Still open:** The federal tip regulation doesn’t address card fees directly, so this page rests on DOL’s fact sheet. ## Related - [What can I do if my employer keeps part of our tips?](https://www.tipmaxapp.com/us/answers/employer-keeping-tips) - [Can my manager or the owner take money from the tip pool?](https://www.tipmaxapp.com/us/answers/can-managers-take-from-tip-pool) - [Can my employer make me tip out or join a tip pool?](https://www.tipmaxapp.com/us/answers/can-my-employer-require-a-tip-pool) - [Does an auto-gratuity count as a tip?](https://www.tipmaxapp.com/us/answers/qualified-tips-vs-service-charges) ## How TipMax helps with this Card tips and cash tips should be logged separately. TipMax is an iPhone app for servers and bartenders that tracks tips and tip-outs and turns a restaurant menu into study flashcards. - Log cash and card tips per shift in seconds. Download TipMax free: https://apps.apple.com/us/app/tipmax-study-track-earn/id6744850146 --- TipMax Answers explains public IRS and U.S. Department of Labor guidance in plain English for tipped workers. It is **not tax, legal, or accounting advice**. Federal rules are a floor; your state may add its own tip rules. Confirm with IRS.gov, DOL.gov, your state labor agency, or a qualified professional. TipMax the app helps you track tips and tip-outs; it does not file your taxes or decide tip-pool disputes.