No Tax on Tips for Hairstylists and Cosmetologists (2026)
Yes. Hairstylists and Cosmetologists are on the IRS tipped jobs list (code 603), so you can deduct up to $25,000 of tips from federal income tax for 2026. It works whether you’re on salon payroll (W-2) or rent a booth (1099).
- IRS code 603
- Cap $25,000
- W-2 or 1099
Tips calculator for hairstylists and cosmetologists
Private: runs in your browserEstimate of federal income tax only. Not tax advice.
Example: hairstylist
- Booth renter, $9,000 of tips, $41,000 net profit, singleQualified tips $9,000.Deduct $9,000 · save about $1,080 in federal tax
What hairstylists should know
- On payroll, look for box 12 code TP on your W-2. Self-employed, use your own records; tips are capped at your net profit.
- Salon employees: tips show on your W-2 as code TP.
- Booth renters: tips are part of your business income. You can’t deduct more tips than your net profit.
- If you work for yourself, tips earned in a “specified service trade or business” (fields like health or performing arts) have extra limits. Check the Schedule 1-A instructions; this site doesn’t decide that for you.
Your IRS code
603 Barbers, hairdressers, hairstylists, and cosmetologists. Not your exact job? See the full list of 71 tipped jobs.
Hairstylists and Cosmetologists: FAQ
Can hairstylists deduct tips?
Yes. Hairstylists and cosmetologists are code 603 on the IRS list.
I rent a booth. Do I qualify?
Yes, as a self-employed worker. Your tip deduction can’t be more than the profit from your booth business.
Do tips paid through Square or Venmo count?
Yes, if clients chose to give them. Keep the payout records.
How much can hairstylists deduct?
Up to $25,000 of qualified tips per tax return, for 2025 through 2028. It shrinks by $100 for each full $1,000 of income over $150,000 ($300,000 joint).
Do I still pay Social Security and Medicare on tips?
Yes. The deduction only lowers federal income tax. Payroll or self-employment tax and state tax don’t change.
Related tools and guides
- BarbersCode 603. W-2 or 1099.
- Nail TechniciansCode 605. W-2 or 1099.
- Massage TherapistsCode 602. W-2 or 1099.
- No tax on tips calculatorW-2 code TP, box 14b and 1099 tips, with the net-profit limit.
- IRS tipped occupations listAll 71 Treasury Tipped Occupation Codes, searchable.
- W-2 code TP and box 14bCash tips reported to your employer and your occupation code.
- No tax on tips by jobBartenders, servers, stylists, drivers and more.