In a landmark move aimed at supporting workers across multiple industries, President Trump has signed the “One, Big, Beautiful Bill Act,” which includes a highly anticipated provision commonly referred to as the “no tax on tips” law. This new legislation exempts tips from federal taxation for more than 60 types of jobs, offering substantial financial relief to employees who rely heavily on gratuities as part of their income.
The law specifically targets positions in industries such as hospitality, food service, personal care, and other sectors where tipping constitutes a significant portion of compensation. Workers in these roles often face unpredictable income streams, and eliminating taxes on tips is expected to boost take-home pay considerably. For many, this could mean hundreds, or even thousands, of dollars in additional income each year.
“This is a win for hardworking Americans who depend on tips to make a living,” a White House spokesperson said. “By reducing their tax burden, we are putting more money directly into the pockets of those who serve our communities every day. It’s about fairness and recognizing the essential work these employees do.”
Industry leaders have also welcomed the law, citing it as a step toward fairer compensation for employees. Many restaurant owners, hotel managers, and salon operators have expressed optimism that this change will not only benefit employees but also improve morale and retention rates. Economists suggest that the policy could stimulate local economies, as workers with more disposable income are likely to spend more in their communities, creating a positive ripple effect across various sectors.
While implementation details are still being clarified, the “no tax on tips” provision represents a major policy shift, highlighting the administration’s focus on financial relief for service-sector employees. Workers and employers alike are eagerly awaiting the law’s rollout, anticipating the positive impact it could have on everyday earnings and quality of life.