(a) Tip offset is the amount of money by which an employer, in meeting the legal minimum wage standard, may reduce a tipped employee's wage in consideration of the receipt of tips.

What is tip credit offset?

Tip credits affect minimum wage calculations. They allow an employer to credit some of the employees' tips toward the employer's obligation to pay minimum wage. Tip credit are not deducted from pay, but show as a line item on a pay stub.

Why are tips deducted from paycheck?

If your employer pays out tips or service charges on a nightly basis, they sometimes add them to your paycheck in order to withhold taxes. This amount is shown as an addition and a deduction since the money was already paid.