Illinois Tip Pooling Laws (2026)

Illinois allows tip pooling as federal law permits, says tips belong to employees, and requires them to be paid within 13 days of the end of the pay period. The tip credit is capped at 40%, so tipped staff get at least $9.00 an hour on the $15.00 minimum. Chicago sets higher rates: $17.05, and $12.96 for tipped workers, from July 1, 2026.

Last reviewed October 11, 2026.

At a glance

Minimum wage	$15.00 an hour
Tipped cash wage	$9.00 an hour (credit capped at 40%)
Chicago	$17.05; tipped $12.96 (from July 1, 2026, 4+ employees)
Cook County	$15.40; tipped $9.25 (from July 1, 2026, where it applies)
Required tip pools	Allowed as federal law permits
Back-of-house in a pool	Only where no tip credit is taken
Card fees taken from tips	Proportionate share allowed
Tip payment deadline	13 days after the end of the pay period

Tip credit and minimum wage

The Illinois minimum wage has been $15.00 an hour since January 1, 2025 (820 ILCS 105/4). Employers can count tips toward up to 40% of it, so the tipped cash wage is at least $9.00, and they must be able to show the employee actually received the tips claimed. An employee counts as tipped only with $20 or more a month in tips. The state law does not cover employers with fewer than 4 employees.

Who can share in a tip pool

Gratuities are the property of the employees and employers may not keep them, but the law does not prohibit tip pooling as permitted by law (820 ILCS 115/4.1). In practice that means the federal rules: with a tip credit, the pool is limited to employees who customarily and regularly receive tips, and managers, supervisors and owners cannot share. Tips must be paid no later than 13 days after the end of the pay period in which they were earned.

Credit card tips

An employer may withhold a proportionate share of card processing fees from card tips, as long as the amount withheld does not exceed the tip’s share of the whole bill (820 ILCS 115/4.1).

Chicago and Cook County

Chicago: $17.05 standard and $12.96 tipped from July 1, 2026, for employers with 4 or more employees. Chicago is phasing out its tip credit, but the phase-out was delayed: the credit stays at 24% for all employers through June 30, 2028, then falls in steps to zero from July 1, 2030, for employers with 21 or more employees and from July 1, 2033, for those with 4 to 20.

Cook County, outside Chicago and in municipalities that have not opted out: $15.40 standard and $9.25 tipped from July 1, 2026.

Records and notice

Employers taking a tip credit keep a daily tip report signed by the employee, the credit taken (no more than 40%) and tipped and non-tipped hours, and must tell the employee in writing each time the credit changes (56 Ill. Adm. Code 210.720). Records are kept for at least 3 years; Chicago requires five.

Illinois tip pooling FAQ

What is the tipped minimum wage in Illinois?

$9.00 an hour, because the tip credit is capped at 40% of the $15.00 minimum. In Chicago it is $12.96 from July 1, 2026.

Is tip pooling legal in Illinois?

Yes, as federal law permits. Tips belong to employees, and managers, supervisors and owners cannot share in a pool.

Can an Illinois employer deduct credit card fees from tips?

Yes, a proportionate share of the processing fee, no more than the tip’s share of the bill.

Is Chicago eliminating the tip credit?

Gradually. The credit stays at 24% through June 30, 2028, then reaches zero on July 1, 2030, for employers with 21 or more employees and on July 1, 2033, for employers with 4 to 20.

Official sources

This page summarizes the law for restaurant operators and staff; it is not legal advice. Wages and rules change, and cities can set their own minimums. Check the linked official sources, or ask an employment lawyer, before changing how you handle tips.