South Dakota tipped wage ($5.925) and tips calculator
South Dakota has no income tax — “one of seven states that does not impose a state income tax” — and pays tipped workers at least $5.925 an hour, half the $11.85 minimum.
What the Department of Labor says
The Department’s FAQ sets the tipped cash wage at no less than 50% of the minimum and defines a tipped employee as one who “customarily and regularly receives more than $35 a month in tips.” If tips plus cash wage fall short of the minimum, the employer makes up the difference as additional wages each regular pay period. The minimum is adjusted every January by CPI, rounded up to the nearest five cents; the 2027 rate had not been posted when we verified.
South Dakota figures
| Cash wage / minimum | $5.925 / $11.85 |
|---|---|
| In force | July 1, 2026 – December 31, 2026 |
| Next change | after December 31, 2026 — not yet published |
| Tipped threshold | More than $35 a month in tips |
| Tips on the 2025 return | no state income tax on wages. “South Dakota is one of seven states that does not impose a state income tax.” Source: South Dakota Department of Revenue |
| Tips on the 2026 return | no state income tax on wages. Unchanged. Source: South Dakota Department of Revenue |
Tax
With no state income tax, the federal qualified-tips deduction is the only income-tax benefit for South Dakota workers.
A Rapid City server
A $15,000 deduction saves $1,650 — the entire benefit. Thirty hours at $5.925 pay $178; with $110 of tips the worker clears $356, so the make-up owed is $68.
Check a South Dakota workweek
Where these figures come from
- South Dakota Department of Revenue · South Dakota Department of Labor and Regulation
- Individuals — Taxes (2026)
- Minimum Wages for Tipped Employees (table by state) (2026-07-01)
- Minimum Wage (2026)
Federal rules: how the deduction works. Nearby: North Dakota, Minnesota, Iowa, Nebraska, Wyoming, Montana.
Figures verified against primary sources on