Bartenders & Servers in Denver, CO: taxes and retirement for 2026

For bartenders, servers, baristas and other workers paid largely in tips in Denver, CO. Colorado has a flat 4.4% state income tax for 2026. Here are the 2026 rules, a worked example and the official sources.

What's different in Denver

Local income tax: No city income tax in Denver.
Denver Occupational Privilege Tax (OPT, 'head tax'): A sole proprietor or partnership with no employees pays only the Business OPT of $4.00 a month for each owner or partner ($48 a year for one self-employed person); the $500 earnings test does not apply to owners. Employees who earn at least $500 in a calendar month for work in Denver pay $5.75 a month, withheld by the employer. Individuals, sole proprietors and partnerships without employees may prepay the whole year, due Jan. 31.
Colorado business personal property declaration (Denver Assessor): For tax years 2025 and 2026, business personal property worth $56,000 or less per county in total is exempt. If it is worth more, the owner must file a declaration schedule with the county assessor by April 15; the late penalty is $50 or 15% of the tax due, whichever is less.
City business license: Depends on the business type: some businesses need a Denver business license (check the Denver Business Licensing Center's business index). If you do business from home and use your home address as the business address, you must get a zoning permit for a home occupation.
Colorado Delivery Network Company driver protections (HB24-1129, C.R.S. 8-4-126; state law): Since Jan. 1, 2025, delivery apps operating in Colorado must disclose what the consumer paid and what the driver is paid, keep a written deactivation policy with a challenge procedure, and meet other transparency and safety rules; drivers can file complaints with the state Division of Labor Standards.
Colorado Transportation Network Company driver protections (SB24-075, C.R.S. 8-4-127; state law): Rideshare companies operating in Colorado must make pay and trip disclosures to drivers, riders and the state, and since June 1, 2025 must follow deactivation and suspension policy rules; drivers can file complaints with the state Division of Labor Standards.
Also worth knowing: Denver has no city income tax; the OPT is a flat monthly tax, not a percentage of income (Colorado localities with wage taxes are listed only as payroll/flat-rate taxes; Tax Foundation 2026, secondary). No Denver-specific gig-worker pay ordinance was found; the two gig laws listed are Colorado state laws that apply in Denver and set disclosure and deactivation rules, not a minimum pay rate.

Colorado rules for bartenders & servers

State income tax (2026): Colorado has a flat 4.4% state income tax for 2026. The statutory rate is 4.40% (Proposition 121, starting tax year 2022), and the 2026 DR 0104EP worksheet figures estimated tax at 4.4%. Under SB24-228 (tax years 2024 through 2034), the rate can be temporarily lowered for a tax year when TABOR surplus revenue passes set thresholds. The 2026 estimated tax form does not reflect any reduction for 2026.
State estimated tax: You generally must pay estimated tax if you expect to owe more than $1,000 in net Colorado tax for 2026 after withholding and credits. The required annual payment is the smaller of 70% of your 2026 tax or 100% of your 2025 tax (110% if your 2025 federal AGI was over $150,000). Same dates as federal: April 15, June 15, and September 15, 2026, and January 15, 2027. Form DR 0104EP.
Minimum wage (2026): $15.16 an hour; tipped cash wage $12.14 an hour. The maximum tip credit is $3.02. Local 2026 minimums: Denver $19.29 ($16.27 tipped), Edgewater $18.17 ($13.50 tipped), City of Boulder $16.82 ($13.80 tipped), and unincorporated Boulder County $16.82. CDLE announced on August 13, 2026 that the state rate rises to $15.71 ($12.69 tipped) in 2027.
Unemployment insurance independent contractor test (C.R.S. 8-70-115): A worker is presumed to be in covered employment unless shown to be free from control and direction and customarily engaged in an independent trade or business related to the work. A signed written contract with the statutory clauses and a bold disclosure (no unemployment benefits; contractor pays own income taxes) creates a rebuttable presumption of independent contractor status.
Delivery network company driver protections (HB24-1129, C.R.S. 8-4-126): Since January 1, 2025, delivery apps must show drivers and customers what the customer paid and what the driver receives, along with delivery distances. They must pass through 100% of tips and cannot cut base pay because of a tip. They must also publish a written deactivation policy with a challenge process and give drivers at least 60 seconds to accept an offer.
Transportation network company transparency (SB24-075, C.R.S. 8-4-127): Rideshare companies must tell drivers and riders what the rider paid and what the driver was paid. Since June 1, 2025, they must follow a written deactivation and suspension policy with a reconsideration process, and starting October 1, 2025, a state-certified driver support organization can represent drivers in deactivation and suspension cases.
State retirement program: Colorado SecureSavings is live. It is built around W-2 employers and does not cover 1099 contractors through the employer mandate; self-employed residents can enroll on their own.

Federal rules for 2026

No tax on tips (2025 to 2028)

Eligible workers in occupations that customarily receive tips can deduct up to $25,000 of qualified tips a year from federal taxable income, whether or not they itemize. The deduction shrinks for modified AGI over $150,000 ($300,000 joint). It is income tax only: Social Security and Medicare still apply to tips.

Tips must be reported

Employees must report cash tips of $20 or more in a month to their employer by the 10th of the next month. Tips you did not report go on Form 4137. Only reported tips count toward the deduction.

Overtime deduction

W-2 workers who are owed overtime under federal law can also deduct the overtime premium, up to $12,500 a year ($25,000 joint), with the same income phase-out.

Roth IRA

Without a workplace plan, a Roth IRA lets you save up to $7,500 in 2026 ($8,600 at 50 or older) and withdraw qualified money tax-free in retirement, subject to income limits.

A worked example

A bartender with $30,000 in wages and $15,000 in reported tips
Tips deduction	$15,000
Federal income tax without the deduction	$3,220
Federal income tax with it	$1,420
Federal income tax saved	$1,800

Single filer, standard deduction, 2026 brackets. Payroll taxes on tips are unchanged. Computed from 2026 IRS limits (Notice 2025-67, Rev. Proc. 2025-32) and the SSA wage base.

Free tools

Roth IRA growth calculator Quarterly tax calculator (for 1099 event work)

Guides by job and platform

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Questions

Is there a local income tax in Denver?

No city income tax applies in Denver. Colorado has a flat 4.4% state income tax for 2026.

What local business taxes apply to self-employed bartenders & servers in Denver?

Denver Occupational Privilege Tax (OPT, 'head tax'): A sole proprietor or partnership with no employees pays only the Business OPT of $4.00 a month for each owner or partner ($48 a year for one self-employed person); the $500 earnings test does not apply to owners. Employees who earn at least $500 in a calendar month for work in Denver pay $5.75 a month, withheld by the employer. Individuals, sole proprietors and partnerships without employees may prepay the whole year, due Jan. 31. Colorado business personal property declaration (Denver Assessor): For tax years 2025 and 2026, business personal property worth $56,000 or less per county in total is exempt. If it is worth more, the owner must file a declaration schedule with the county assessor by April 15; the late penalty is $50 or 15% of the tax due, whichever is less.

Do I need a business license to freelance from home in Denver?

Depends on the business type: some businesses need a Denver business license (check the Denver Business Licensing Center's business index). If you do business from home and use your home address as the business address, you must get a zoning permit for a home occupation.

What Denver rules protect gig workers and freelancers?

Colorado Delivery Network Company driver protections (HB24-1129, C.R.S. 8-4-126; state law): Since Jan. 1, 2025, delivery apps operating in Colorado must disclose what the consumer paid and what the driver is paid, keep a written deactivation policy with a challenge procedure, and meet other transparency and safety rules; drivers can file complaints with the state Division of Labor Standards. Colorado Transportation Network Company driver protections (SB24-075, C.R.S. 8-4-127; state law): Rideshare companies operating in Colorado must make pay and trip disclosures to drivers, riders and the state, and since June 1, 2025 must follow deactivation and suspension policy rules; drivers can file complaints with the state Division of Labor Standards.

Do bartenders & servers in Colorado pay state income tax?

Colorado has a flat 4.4% state income tax for 2026. The statutory rate is 4.40% (Proposition 121, starting tax year 2022), and the 2026 DR 0104EP worksheet figures estimated tax at 4.4%. Under SB24-228 (tax years 2024 through 2034), the rate can be temporarily lowered for a tax year when TABOR surplus revenue passes set thresholds. The 2026 estimated tax form does not reflect any reduction for 2026.

When are Colorado estimated tax payments due for 2026?

You generally must pay estimated tax if you expect to owe more than $1,000 in net Colorado tax for 2026 after withholding and credits. The required annual payment is the smaller of 70% of your 2026 tax or 100% of your 2025 tax (110% if your 2025 federal AGI was over $150,000). Same dates as federal: April 15, June 15, and September 15, 2026, and January 15, 2027. The state form is DR 0104EP.

What is the tipped minimum wage in Colorado in 2026?

Colorado's 2026 minimum wage is $15.16 an hour. Employers may pay tipped workers a cash wage of $12.14 an hour as long as tips bring them to the full minimum. The maximum tip credit is $3.02. Local 2026 minimums: Denver $19.29 ($16.27 tipped), Edgewater $18.17 ($13.50 tipped), City of Boulder $16.82 ($13.80 tipped), and unincorporated Boulder County $16.82. CDLE announced on August 13, 2026 that the state rate rises to $15.71 ($12.69 tipped) in 2027.

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Sources

State and local facts researched from official sources and independently re-checked; last verified October 2026, next scheduled review 2027-01-02. Educational information for 2026, not tax, legal or investment advice. Rules change; check the official sources listed and a tax professional for your situation. Gigaverse AI, Inc. is a financial technology company, not a bank, and not itself a registered investment adviser or broker-dealer.