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What Is The FICA Tax Tip Credit?

In 1993, Congress created the 45B FICA tax tip credit, allowing restaurants to claim a dollar-for-dollar credit on the employer-paid portion of FICA taxes for tips employees earn directly from customers.

Since 2001, the beauty industry has fought to extend that same benefit to our small-business owners. As the second-most tipped industry in the country, it was only fair that beauty professionals receive equal treatment under the tax code.

The Professional Beauty Association is proud to share that, as of July 4, 2025, our industry finally has access to this long-overdue credit—and the recognition it deserves.

Who this affects

Hair salons, barbershops, spas, and other beauty service establishments owners are mostly comprised of middle class women and minorities, employing more than 2x the national average.

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14% African Americans

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23% Asians

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83% Women

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60% women-owned salons

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Alliance for
Tax Equity

  • International Franchise Association
  • National Association of Barber Boards of America
  • National Association of Women Business Owners
  • National Interstate Council of State Boards
  • Personal Care Products Council
  • Professional Beauty Association
  • Professional Beauty Employment Coalition
  • The Esthetics Council
  • Associated Skin Care Professionals
  • Associated Hair Professionals
  • Associated Nail Professionals
  • Intercoiffure America Canada
  • International Salon Spa Business Network
  • International Spa Association
  • Cosmetologists Chicago

Protect Your Industry

Our members power our Advocacy campaigns to help elevate and protect our professional industry from deregulation. Join today and support our Government Affairs team to help them continue their essential work.