The Best and Worst States for Workers Who Depend On Tips To Make a Living

Tipping can be a source of consternation as proper etiquette surrounding the practice varies from culture to culture. However, in spite of this inconsistency, a large portion of American service workers are almost entirely dependent on tips for their livelihood. What’s more, many of these workers tend to be in vulnerable industries and earn low wages even after tips, so a week of unusually thrifty — or cheap, depending on your criterion — customers could mean being unable to pay rent.

That is why GOBankingRates dug into what places are the most receptive to people who depend on tips for a living. This new study focuses on the median income range for tip-dependent workers in each state, per the Bureau of Labor Statistics, as well as the average of those median incomes. The study also considers factors like median rent and the average cost of living in the state. This provides a clearer picture of just how affordable life in the state is for tip-dependent workers.

Last updated: June 12, 2020

• Annual total expenditures for necessities: $16,935
• Average median rent: $872
• April 2020 unemployment rate: 9.2%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $19,000-$37,650
  • Average of their median incomes: $26,850

• Annual total expenditures for necessities: $16,286
• Average median rent: $826
• April 2020 unemployment rate: 8.5%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $19,290-$36,360
  • Average of their median incomes: $25,670

• Annual total expenditures for necessities: $16,902
• Average median rent: $1,192
• April 2020 unemployment rate: 8.1%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $23,230-$36,190
  • Average of their median incomes: $27,060

• Annual total expenditures for necessities: $15,253
• Average median rent: $893
• April 2020 unemployment rate: 8.3%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $20,540-$30,170
  • Average of their median incomes: $23,909

• Annual total expenditures for necessities: $16,769
• Average median rent: $782
• April 2020 unemployment rate: 10.2%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $20,420-$29,650
  • Average of their median incomes: $24,271

• Annual total expenditures for necessities: $18,334
• Average median rent: $1,669
• April 2020 unemployment rate: 15.4%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $27,250-$41,330
  • Average of their median incomes: $33,192

• Annual total expenditures for necessities: $15,303
• Average median rent: $822
• April 2020 unemployment rate: 10.2%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $19,070-$33,770
  • Average of their median incomes: $23,409

• Annual total expenditures for necessities: $16,585
• Average median rent: $1,229
• April 2020 unemployment rate: 12.6%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $24,710-$30,710
  • Average of their median incomes: $27,400

• Annual total expenditures for necessities: $19,033
• Average median rent: $1,295
• April 2020 unemployment rate: 15.6%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $24,560-$36,710
  • Average of their median incomes: $30,260

• Annual total expenditures for necessities: $14,737
• Average median rent: $913
• April 2020 unemployment rate: 9.7%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $19,430-$27,200
  • Average of their median incomes: $22,701

• Annual total expenditures for necessities: $19,416
• Average median rent: $1,030
• April 2020 unemployment rate: 10.6%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $24,360-$34,430
  • Average of their median incomes: $26,237

• Annual total expenditures for necessities: $16,219
• Average median rent: $1,113
• April 2020 unemployment rate: 9.7%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $19,710-$36,440
  • Average of their median incomes: $24,563

• Annual total expenditures for necessities: $21,065
• Average median rent: $1,413
• April 2020 unemployment rate: 7.9%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $22,700-$36,710
  • Average of their median incomes: $27,889

• Annual total expenditures for necessities: $14,504
• Average median rent: $798
• April 2020 unemployment rate: 10.2%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $19,570-$28,930
  • Average of their median incomes: $21,388

• Annual total expenditures for necessities: $14,687
• Average median rent: $929
• April 2020 unemployment rate: 11.3%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $18,640-$29,330
  • Average of their median incomes: $22,278

• Annual total expenditures for necessities: $17,701
• Average median rent: $880
• April 2020 unemployment rate: 11.3%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $19,500-$30,950
  • Average of their median incomes: $23,380

• Annual total expenditures for necessities: $15,536
• Average median rent: $954
• April 2020 unemployment rate: 11.5%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $19,100-$28,990
  • Average of their median incomes: $22,810

• Annual total expenditures for necessities: $14,737
• Average median rent: $925
• April 2020 unemployment rate: 11.2%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $18,810-$28,700
  • Average of their median incomes: $21,872

• Annual total expenditures for necessities: $21,365
• Average median rent: $1,337
• April 2020 unemployment rate: 12.9%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $23,620-$44,130
  • Average of their median incomes: $28,628

• Annual total expenditures for necessities: $14,404
• Average median rent: $838
• April 2020 unemployment rate: 13.7%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $18,630-$25,240
  • Average of their median incomes: $21,670

• Annual total expenditures for necessities: $16,053
• Average median rent: $921
• April 2020 unemployment rate: 14.1%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $19,500-$30,480
  • Average of their median incomes: $23,211

• Annual total expenditures for necessities: $15,503
• Average median rent: $838
• April 2020 unemployment rate: 15.4%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $18,760-$33,700
  • Average of their median incomes: $22,940

• Annual total expenditures for necessities: $17,451
• Average median rent: $1,477
• April 2020 unemployment rate: 11.3%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $22,120-$33,850
  • Average of their median incomes: $26,330

• Annual total expenditures for necessities: $21,664
• Average median rent: $1,690
• April 2020 unemployment rate: 15.1%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $27,820-$37,670
  • Average of their median incomes: $31,334

• Annual total expenditures for necessities: $14,854
• Average median rent: $910
• April 2020 unemployment rate: 12.9%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $18,520-$35,130
  • Average of their median incomes: $21,537

• Annual total expenditures for necessities: $22,863
• Average median rent: $1,634
• April 2020 unemployment rate: 14.5%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $26,630-$38,810
  • Average of their median incomes: $31,071

• Annual total expenditures for necessities: $16,885
• Average median rent: $1,422
• April 2020 unemployment rate: 10.6%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $23,200-$30,970
  • Average of their median incomes: $24,829

• Annual total expenditures for necessities: $19,766
• Average median rent: $1,264
• April 2020 unemployment rate: 17%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $22,895-$41,100
  • Average of their median incomes: $27,951

• Annual total expenditures for necessities: $15,137
• Average median rent: $793
• April 2020 unemployment rate: 15.2%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $20,150-$25,160
  • Average of their median incomes: $21,520

• Annual total expenditures for necessities: $15,819
• Average median rent: $1,031
• April 2020 unemployment rate: 12.2%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $19,000-$28,170
  • Average of their median incomes: $21,913

• Annual total expenditures for necessities: $15,803
• Average median rent: $1,177
• April 2020 unemployment rate: 16.4%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $19,470-$33,860
  • Average of their median incomes: $24,763

• Annual total expenditures for necessities: $22,314
• Average median rent: $1,385
• April 2020 unemployment rate: 14.2%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $25,380-$34,450
  • Average of their median incomes: $28,358

• Annual total expenditures for necessities: $14,854
• Average median rent: $1,160
• April 2020 unemployment rate: 11.9%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $18,740-$27,290
  • Average of their median incomes: $21,842

• Annual total expenditures for necessities: $15,503
• Average median rent: $889
• April 2020 unemployment rate: 14.5%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $18,330-$26,930
  • Average of their median incomes: $21,433

• Annual total expenditures for necessities: $14,754
• Average median rent: $953
• April 2020 unemployment rate: 14.7%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $18,500-$24,890
  • Average of their median incomes: $21,467

• Annual total expenditures for necessities: $17,052
• Average median rent: $1,064
• April 2020 unemployment rate: 15.1%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $20,390-$29,920
  • Average of their median incomes: $23,554

• Annual total expenditures for necessities: $15,303
• Average median rent: $1,175
• April 2020 unemployment rate: 12.8%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $18,800-$26,100
  • Average of their median incomes: $22,319

• Annual total expenditures for necessities: $17,968
• Average median rent: $1,347
• April 2020 unemployment rate: 14.3%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $19,870-$34,670
  • Average of their median incomes: $25,150

• Annual total expenditures for necessities: $15,137
• Average median rent: $880
• April 2020 unemployment rate: 16.9%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $19,250-$27,830
  • Average of their median incomes: $21,653

• Annual total expenditures for necessities: $16,069
• Average median rent: $1,027
• April 2020 unemployment rate: 12.1%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $18,660- $25,700
  • Average of their median incomes: $20,706

• Annual total expenditures for necessities: $15,453
• Average median rent: $903
• April 2020 unemployment rate: 16.8%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $19,660-$26,280
  • Average of their median incomes: $21,590

• Annual total expenditures for necessities: $14,121
• Average median rent: $867
• April 2020 unemployment rate: 15.4%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $18,640-$24,110
  • Average of their median incomes: $19,993

• Annual total expenditures for necessities: $14,953
• Average median rent: $975
• April 2020 unemployment rate: 22.7%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $21,340-$33,750
  • Average of their median incomes: $24,396

• Annual total expenditures for necessities: $16,352
• Average median rent: $1,339
• April 2020 unemployment rate: 12.9%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $19,850-$28,200
  • Average of their median incomes: $23,079

• Annual total expenditures for necessities: $21,248
• Average median rent: $1,659
• April 2020 unemployment rate: 9.9%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $21,530-$35,300
  • Average of their median incomes: $26,349

• Annual total expenditures for necessities: $20,599
• Average median rent: $1,642
• April 2020 unemployment rate: 15.3%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $22,520-$35,820
  • Average of their median incomes: $28,060

• Annual total expenditures for necessities: $18,067
• Average median rent: $1,413
• April 2020 unemployment rate: 16.3%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $19,500-$30,720
  • Average of their median incomes: $24,361

• Annual total expenditures for necessities: $22,930
• Average median rent: $2,017
• April 2020 unemployment rate: 15.5%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $26,060-$35,900
  • Average of their median incomes: $29,923

• Annual total expenditures for necessities: $31,939
• Average median rent: $2,127
• April 2020 unemployment rate: 22.3%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $29,340-$58,480
  • Average of their median incomes: $38,141

• Annual total expenditures for necessities: $18,051
• Average median rent: $1,278
• April 2020 unemployment rate: 28.2%
• Tip-dependent workers GOBankingRates assessed:
  • Median income range: $19,480-$33,440
  • Average of their median incomes: $25,839

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Methodology: To find the best and worst states for tip-dependent workers, GOBankingRates first found the sum of the annual cost of “food at home,” “rented dwellings,” “utilities, gas, and other public services,” “healthcare,” “gas and other fuels,” and “public transportation” for a single person as sourced from the Bureau of Labor Statistics’ 2018 Consumer Expenditure Survey. This sum was then factored out by each state’s overall cost of living index, as sourced from the Missouri Economic and Information Center’s 2019 state cost of living data, which provided the (1) annual cost of necessities in each state. GOBankingRates then found the (2) median rent as sourced from Apartment List’s May 2020 rent summary data and (3) April 2020 unemployment rates sourced from the Bureau of Labor Statistics. Finally, GOBankingRates found the median incomes by state for the following tip-based/heavy occupations: “bartenders,” “hairdressers, hairstylists and cosmetologist,” “waiters and waitresses,” “tour and travel guides, driver/sales workers,” “passenger vehicle drivers, except bus drivers,” “transit and intercity,” “baggage porters, bellhops, and concierges,” “maids and housekeeping cleaners” and “hosts and hostesses, restaurant, lounge, and coffee.” The (4) average of these median incomes was then found for each state.

These four factors were scored and combined with the lowest score being the best. In the final calculations, factor No. 4 was weighted 2x. GOBankingRates also found each state’s median household income from the U.S. Census Bureau’s 2018 American Community Survey and a New York Times report detailing all 50 states’ reopening plans. All data was collected and is up to date as of June 3, 2020.