FICA Tip Credit Calculator for Salons, Barbershops & Spas
Turn the tips your stylists and technicians report into a tax credit. Beauty and personal-care businesses became eligible for the §45B credit starting with the 2025 tax year.
New for 2025: salons are now eligible
OBBBA extended the §45B credit to beauty and personal-care employers for tax years beginning after Dec 31, 2024. 2025 is your first claimable year — earlier years remain ineligible for this category.
Until recently the §45B credit was effectively a restaurant benefit. Under the One Big Beautiful Bill Act (OBBBA), beauty and personal-care businesses are eligible for tax years beginning after December 31, 2024 — so 2025 is the first year salons, barbershops, nail salons, and spas can claim it.
For beauty and personal care, the threshold is the federal $7.25. If your stylists' or technicians' cash wage already meets or exceeds $7.25/hour, their reported tips are generally fully creditable. The calculator handles the eligibility year automatically — prior years show as not eligible rather than a misleading number.
Beauty and personal-care eligibility under the 2025 law change is limited to covered services where tipping is customary, and the employer must have paid or incurred Social Security and Medicare taxes on those tips. This tool does not independently verify every condition; confirm with your CPA before relying on this estimate.
Threshold for this category: $7.25/hour — the current federal rate (not frozen).
Examples
Hair salon with 8 stylists
With stylists reporting tips and a cash wage at or above $7.25, a salon can turn reported tips into a credit at 7.65% — real dollars on the 2025 return.
Nail salon technicians
Technicians who report tips count the same way. Enter each chair's cash wage and tips to see the creditable share.
Spa with mixed roles
Tipped massage therapists and estheticians belong in the worksheet; non-tipped front-desk staff do not.
Frequently asked questions
When can salons first claim the credit?+
For tax years beginning after December 31, 2024 — so the 2025 tax year is the first eligible year for beauty and personal-care businesses under OBBBA.
Can we claim 2024 or earlier?+
No. Beauty/personal-care eligibility begins with 2025. The calculator marks prior years as not eligible for this category.
What threshold applies to salons?+
The federal $7.25 rate. If a worker's cash wage is at or above $7.25/hour, their reported tips are generally fully creditable.