Local guides / Virginia / Virginia Beach
Bartenders & Servers in Virginia Beach, VA: taxes and retirement for 2026
For bartenders, servers, baristas and other workers paid largely in tips in Virginia Beach, VA. Virginia has a graduated state income tax for 2026: 2% to 5.75% (top rate starts at $17,000 for single filers). Here are the 2026 rules, a worked example and the official sources.
What's different in Virginia Beach
- Local income tax
- No city income tax in Virginia Beach.
- Virginia Beach Business, Professional and Occupational License (BPOL) tax
- The license tax is based on gross receipts: $25 up to $25,000, $40 up to $100,000 and $50 up to $200,000. Above $200,000, a per-$100 rate applies by category: $0.36 for general/personal services, $0.58 for professional, financial and real estate services, $0.16 for contractors and $0.20 for retail. Licenses run Jan. 1-Dec. 31, and renewals are due March 1.
- Virginia Beach Business Tangible Personal Property Tax
- Business property such as furniture, fixtures, tools and equipment is assessed at 40% of original cost and taxed at $4.00 per $100 of assessed value. Returns are due March 1, bills go out in May, and tax is due June 5.
- City business license
- A Virginia Beach business license must be obtained before doing business, and home-based applicants must show proof of residency and sign a Restrictions for Home Use form.
- Virginia Beach business license for rideshare (TNC) drivers
- The Commissioner of the Revenue treats rideshare (TNC) drivers as independent contractors of the companies they drive for. Drivers must visit the office for a determination of business license liability, and failure to comply can result in a summons. The office also says independent contractors living in the city who commonly engage in business are subject to the business license tax.
- Also worth knowing
- Virginia Beach is an independent city, so city taxes take the place of county taxes. Virginia is not among the states with city- or county-level income or payroll taxes, per the Tax Foundation (secondary source; no official state statement found) (https://taxfoundation.org/data/all/state/state-income-tax-rates). The 40% assessment ratio comes from the City's business license guide (revised 12/29/2022; https://s3.us-east-1.amazonaws.com/virginia-beach-departments-docs/cor/Businesses/License/How-to-Start-a-Business-English.pdf); current BPOL and property tax rates come from the Commissioner of the Revenue's rates page.
Virginia rules for bartenders & servers
- State income tax (2026)
- Virginia has a graduated state income tax for 2026: 2% to 5.75% (top rate starts at $17,000 for single filers). Rates are percentages and brackets are the same for all filing statuses: 2% on the first $3,000, 3% from $3,000 to $5,000, 5% from $5,000 to $17,000, and 5.75% over $17,000.
- State estimated tax
- Starting with 2026, you must make estimated payments (or have more withheld) if your Virginia tax after withholding and credits is expected to be more than $1,000. Single filers with expected Virginia AGI under $11,950 are exempt. May 1, June 15 and September 15, 2026, and January 15, 2027; the first installment is due May 1, not April 15. Qualifying farmers, fishermen and merchant seamen can make a single payment by January 15, 2027, or skip estimates by filing and paying in full by March 1, 2027. Form 760ES.
- Local BPOL license tax (capped by Va. Code 58.1-3706)
- Many Virginia cities and counties tax business gross receipts under a BPOL license. State law bars the tax for businesses under $100,000 in gross receipts in localities over 50,000 people, or under $50,000 in localities of 25,000 to 50,000, although a license fee may still apply. Rates are generally capped at 58 cents per $100 for financial, real estate and professional services, 36 cents for repair, personal and business services, 20 cents for retail and 16 cents for contractors; some localities keep higher rates they had in 1978.
- Minimum wage (2026)
- $12.77 an hour; tipped cash wage $2.13 an hour. $12.77 from January 1 to December 31, 2026. 2026 amendments to Va. Code 40.1-28.10 raise it to $13.75 on January 1, 2027, and $15.00 on January 1, 2028, with yearly inflation adjustments from 2029. Tipped employees (more than $30 a month in tips, Va. Code 40.1-28.9) can be paid $2.13 an hour if tips bring them to the state minimum (U.S. DOL table, https://www.dol.gov/agencies/whd/state/minimum-wage/tipped).
- Presumption of employee status (Va. Code 58.1-1900)
- Someone paid to perform services is presumed to be an employee unless the worker or the business shows they are an independent contractor. Virginia Tax decides this using IRS guidelines.
- Private lawsuit for misclassification (Va. Code 40.1-28.7:7)
- A worker who was wrongly classified as a contractor can sue an employer that knew about the misclassification, within three years, for wage-law damages and other relief. Workers are presumed to be employees unless the employer shows contractor status under IRS guidelines.
- State retirement program
- RetirePath Virginia 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
| 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.
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Questions
Is there a local income tax in Virginia Beach?
No city income tax applies in Virginia Beach. Virginia has a graduated state income tax for 2026: 2% to 5.75% (top rate starts at $17,000 for single filers).
What local business taxes apply to self-employed bartenders & servers in Virginia Beach?
Virginia Beach Business, Professional and Occupational License (BPOL) tax: The license tax is based on gross receipts: $25 up to $25,000, $40 up to $100,000 and $50 up to $200,000. Above $200,000, a per-$100 rate applies by category: $0.36 for general/personal services, $0.58 for professional, financial and real estate services, $0.16 for contractors and $0.20 for retail. Licenses run Jan. 1-Dec. 31, and renewals are due March 1. Virginia Beach Business Tangible Personal Property Tax: Business property such as furniture, fixtures, tools and equipment is assessed at 40% of original cost and taxed at $4.00 per $100 of assessed value. Returns are due March 1, bills go out in May, and tax is due June 5.
Do I need a business license to freelance from home in Virginia Beach?
A Virginia Beach business license must be obtained before doing business, and home-based applicants must show proof of residency and sign a Restrictions for Home Use form.
What Virginia Beach rules protect gig workers and freelancers?
Virginia Beach business license for rideshare (TNC) drivers: The Commissioner of the Revenue treats rideshare (TNC) drivers as independent contractors of the companies they drive for. Drivers must visit the office for a determination of business license liability, and failure to comply can result in a summons. The office also says independent contractors living in the city who commonly engage in business are subject to the business license tax.
Do bartenders & servers in Virginia pay state income tax?
Virginia has a graduated state income tax for 2026: 2% to 5.75% (top rate starts at $17,000 for single filers). Rates are percentages and brackets are the same for all filing statuses: 2% on the first $3,000, 3% from $3,000 to $5,000, 5% from $5,000 to $17,000, and 5.75% over $17,000.
When are Virginia estimated tax payments due for 2026?
Starting with 2026, you must make estimated payments (or have more withheld) if your Virginia tax after withholding and credits is expected to be more than $1,000. Single filers with expected Virginia AGI under $11,950 are exempt. May 1, June 15 and September 15, 2026, and January 15, 2027; the first installment is due May 1, not April 15. Qualifying farmers, fishermen and merchant seamen can make a single payment by January 15, 2027, or skip estimates by filing and paying in full by March 1, 2027. The state form is 760ES.
Are there other Virginia taxes for self-employed bartenders & servers?
Local BPOL license tax (capped by Va. Code 58.1-3706): Many Virginia cities and counties tax business gross receipts under a BPOL license. State law bars the tax for businesses under $100,000 in gross receipts in localities over 50,000 people, or under $50,000 in localities of 25,000 to 50,000, although a license fee may still apply. Rates are generally capped at 58 cents per $100 for financial, real estate and professional services, 36 cents for repair, personal and business services, 20 cents for retail and 16 cents for contractors; some localities keep higher rates they had in 1978.
What is the tipped minimum wage in Virginia in 2026?
Virginia's 2026 minimum wage is $12.77 an hour. Employers may pay tipped workers a cash wage of $2.13 an hour as long as tips bring them to the full minimum. $12.77 from January 1 to December 31, 2026. 2026 amendments to Va. Code 40.1-28.10 raise it to $13.75 on January 1, 2027, and $15.00 on January 1, 2028, with yearly inflation adjustments from 2029. Tipped employees (more than $30 a month in tips, Va. Code 40.1-28.9) can be paid $2.13 an hour if tips bring them to the state minimum (U.S. DOL table, https://www.dol.gov/agencies/whd/state/minimum-wage/tipped).
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Sources
- www.tax.virginia.gov/sites/default/files/taxforms/individual-income-tax/2026/760es-2026.pdf
- law.lis.virginia.gov/vacode/title40.1/chapter3/section40.1-28.10/
- law.lis.virginia.gov/vacode/title58.1/chapter37/section58.1-3706/
- law.lis.virginia.gov/vacode/title58.1/chapter19/section58.1-1900/
- law.lis.virginia.gov/vacode/title40.1/chapter3/section40.1-28.7:7/
- cor.virginiabeach.gov/tax-rates-important-dates-deadlines
- s3.us-east-1.amazonaws.com/virginia-beach-departments-docs/cor/Businesses/License/How-to-Start-a-Business-English.pdf
- cor.virginiabeach.gov/businesses/tnc-partners
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.