New Data Highlights How Tip Tax Relief Could Provide More Financial Stability
ATLANTA, June 17, 2025 /PRNewswire-PRWeb/ -- As bipartisan support grows for a federal "No Tax on Tips" proposal, a new report from Instant Financial offers critical insight into how the policy could directly affect the lives of frontline workers across the country. The findings, based on a nationwide survey of 571 workers who use the Instant app to access digital tips and earned wages, highlight overwhelming support for the proposed legislation—83% of respondents said they want to see the policy pass.
"Too often, the debate around tipping and wage reform focuses on lawmakers and economists," said Tal Clark, CEO of Instant Financial. "Instead, we should be seeking the opinions of workers, and their message is clear: this policy is an opportunity for financial relief."
Key findings from the report include:
- 83% of respondents support a No Tax on Tips policy. Just 4% opposed it, and 12% said they were unsure or indifferent. Support was strong across demographics and job types, reflecting widespread desire for tipped income to be treated as untaxed take-home pay.
- 70% of workers are worried about inflation and rising costs. Respondents cited economic anxiety driven by tariffs, higher grocery and gas prices, and unstable housing costs—making tip tax relief feel especially urgent.
- Over 80% use their earned wages and tips to cover essential needs. These include rent, utilities, groceries, and transportation. Far from being extra income, on-demand wages and tips are core to meeting day-to-day financial obligations. With 65% of Americans living paycheck to paycheck, this should come as no surprise.
- 70% said they would be financially unstable without access to wages and tips before payday. This underscores the critical role of earned wage access (EWA) in helping workers manage cash flow and avoid overdraft fees, late bills, or high-interest debt.
- The median reported weekly take-home pay is $400. While averages ranged widely—from below $300 to over $1,000—the vast majority of respondents described their income as inconsistent or unpredictable, with variability tied to hours, shifts, or delivery volume.
The survey also found that while 63% prefer direct deposit, a meaningful number of workers favor cash, checks, or paycards, underscoring the need for payment flexibility for those who may be underbanked. The key takeaway: workers value choice, and policies or payroll systems should reflect that. According to a 2024 report from Instant, 86% of employees want same-day pay.
Instant Financial conducted the survey from May 29 to June 3, 2025, collecting responses from a diverse set of hourly workers using the Instant app. Participants came primarily from the food service, hospitality, and retail industries, and included servers, bartenders, delivery drivers, stylists, cashiers, and support staff. The median age of respondents was 41. Since 2016, Instant Financial has issued more than $7.5 billion in wage payments, including $4.5 billion in digital tips.
To access the full report for free, visit: instant.co.
About Instant
Instant Financial is a fintech company modernizing payments and earned wage access for hourly workers and their employers. We provide earned wage access, digital tips, and instant payments via banks, mobile wallets, or paycards, along with financial wellness services—giving frontline workers control over how and when they get paid. As the first company to offer earned wage access through a paycard, Instant has helped workers in restaurants, retail, hospitality, and beyond access over $7.5 billion in earnings at no or low cost. With 86% of employees wanting same-day pay, our award-winning solutions turn every workday into payday, helping employers improve recruitment and retention. Learn more at instant.co.
Media Contact
Hela Sheth, Instant Financial, 1 6789381318, [email protected], instant.co
SOURCE Instant Financial
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