Trump’s “no tax on tips and overtime” rule: A well-intended measure with unintended consequences

New tax deductions have left employers scrambling to re-engineer payroll systems, manage worker expectations, and brace for a surge in wage-hour litigation

Tipping
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President Donald Trump’s “no tax on tips and overtime” promise arrived as two targeted, temporary deductions in the One Big Beautiful Bill Act (OBBBA) enacted on 4 July 2025.