U.S. · Payroll and employer forms
Form 4137 tip tax.
Social security and Medicare tax on tips you did not report to your employer (tax year 2025).
Form 4137 figures the social security and Medicare tax on tips you did not report to your employer. You owe 6.2% social security tax on unreported tips up to the 2025 limit of $176,100 in total wages and tips, plus 1.45% Medicare tax on all of them. Tips under $20 in a calendar month are left out.
Your 2025 tips
Result
The line-by-line math
The calculator follows lines 2 through 13 of the 2025 form. Line 4 is tips received minus tips reported; it also goes on Form 1040 line 1c as income. Line 5 removes tips under $20 in a month, leaving line 6, the amount subject to Medicare tax. Line 7 is the 2025 maximum of $176,100 subject to social security tax; line 8 is your social security wages and tips from Form W-2 boxes 3 and 7; line 9 is line 7 minus line 8 (never below zero). Line 10 is the smaller of line 6 or line 9. Line 11 is line 10 times 0.062 and line 12 is line 6 times 0.0145. Line 13, the total, goes on Schedule 2 (Form 1040), line 5.
Who has to file it
You must file Form 4137 if you received cash and charge tips of $20 or more in a calendar month and did not report all of them to your employer, or if your Form W-2 box 8 shows allocated tips you must report as income. You must report 100% of your tips to your employer in writing once they total $20 or more in a month, by the 10th day of the following month (the next business day if the 10th falls on a weekend or legal holiday). Cash tips include tips paid by cash, check, debit card and credit card. The $20 rule applies separately to each employer.
What is not on this form
Tips you reported to your employer are already taxed through your Form W-2. A 0.9% Additional Medicare Tax applies to Medicare wages and tips over a threshold that depends on filing status; that is figured on Form 8959 and is not part of this calculator. Railroad Retirement Tax Act tips do not use Form 4137, and if you believe you are an employee but received Form 1099-MISC or 1099-NEC, the instructions point you to Form 8919 instead.
Worked example
Dev received $10,000 in tips in 2025 and reported $4,000 to his employer. Of the unreported $6,000, $600 was in months where he took in under $20. His W-2 social security wages are $30,000. Line 4 is $6,000 and line 6 is $5,400. Room under the social security limit is $176,100 minus $30,000 = $146,100, so line 10 is $5,400. Social security tax is $5,400 times 0.062 = $334.80, Medicare is $5,400 times 0.0145 = $78.30, and line 13 is $413.10. The $6,000 also goes on Form 1040 line 1c as income. If his W-2 wages were $174,000, only $2,100 of room would remain, giving $130.20 social security tax and $208.50 in total.
Credit to your Social Security record
The instructions note that by filing the form, your social security and Medicare tips are credited to your Social Security record, which is used to figure your benefits. Form 4137 is not a substitute for Form W-2. For tax on wages and self-employment, see the FICA calculator and the self-employment tax calculator.
Sources
- Form 4137 (2025) with instructions: Lines 1 to 13, who must file, the $20 monthly rule, the 2025 social security limit of $176,100 and the 6.2% and 1.45% rates. Read November 2, 2026.
- About Form 4137: Form 4137 current revision and related items. Read November 2, 2026.
Figures are for tax year 2025, the edition read for this page.
Frequently asked questions
When do I have to file Form 4137?
When you received cash and charge tips of $20 or more in a calendar month and did not report all of them to your employer, or when your W-2 box 8 shows allocated tips you must report as income.
What rates does Form 4137 use?
Social security tax at 6.2% on unreported tips up to the wage base, and Medicare tax at 1.45% on all unreported tips. The 2025 social security limit is $176,100.
Are tips under $20 a month taxed on Form 4137?
No. Line 5 removes tips you were not required to report because they totaled less than $20 in a calendar month, so they are not subject to social security or Medicare tax on this form.
Where does the Form 4137 tax go on my return?
The total on line 13 goes on Schedule 2 (Form 1040), line 5, and the unreported tips on line 4 go on Form 1040 line 1c as income.
When must I report tips to my employer?
By the 10th day of the month after the month you received them, once you receive $20 or more in cash tips in the month. If the 10th is a weekend or legal holiday, give the report by the next business day.
Not tax or legal advice
This page summarizes IRS and USCIS instructions and is not tax, legal or financial advice. A payroll provider, CPA, enrolled agent or attorney can confirm what applies to your situation. Everything runs in your browser; nothing you enter is sent anywhere.