What It Means for Cleaners and the Cleaning Industry

On May 20, 2025, the U.S. Senate unanimously passed the No Tax on Tips Act, a bipartisan bill that would exempt up to $25,000 in annual tips from federal income tax for tipped workers earning under $160,000 a year. While the legislation was designed with hospitality and food service workers in mind, it could soon create new income opportunities for professionals in the cleaning industry—especially those who regularly receive tips.

At The CoBuilders, where client satisfaction drives performance and pay, this development could be a game-changer for our workforce.

Understanding the No Tax on Tips Act

This legislation allows eligible employees to exclude up to $25,000 in reported tips from federal income tax, provided they:

Work in an occupation traditionally recognized as tipped
Earn less than $160,000 annually
Accurately report their tips through employer payroll systems

The U.S. Department of the Treasury will soon release an official list of recognized tipped professions. If residential cleaners, janitorial workers, and facility maintenance pros are included, this could unlock real savings and more take-home pay for thousands of workers.

Read the full Senate announcement →

Why This Matters to the Cleaning Industry

Cleaners Already Earn Tips—And At The CoBuilders, They Add Up

At The CoBuilders, many of our professional cleaners receive tips as high as 35%, driven by:

Our client satisfaction guarantee
Personalized service and high standards
Real-time communication and accountability

This shows just how valued cleaners are—and why tip-based income is a meaningful part of their compensation.

Tipping Culture Could Grow with This Incentive

Knowing that tips are now federally tax-free, clients may be more inclined to tip generously and consistently. That’s a win for cleaners and for the industry’s push toward fair, performance-based recognition.

Tech-Enabled Tip Support Coming Soon

To streamline and boost tip collection, The CoBuilders is building tipping features directly into our mobile platform. Cleaners will soon be able to receive, report, and track tips via the CoBuilders app, helping:

Increase tip visibility
Simplify record-keeping for tax exemption
Reduce missed or forgotten gratuities

This enhancement is designed with both transparency and income growth in mind.

What Cleaners Should Know Now

If you're a cleaner or run a cleaning business, here are the next steps:

1. Stay Informed About Eligibility

The final list of “traditionally tipped occupations” is expected soon. Cleaners, housekeepers, and janitorial pros should keep an eye on updates from the Department of the Treasury.

2. Start Reporting Tips (If You Aren’t Already)

To qualify for the tax exemption, all tips must be reported through payroll. That means no more off-the-books cash tips—accuracy and transparency matter now more than ever.

3. Talk to a Tax Advisor

Cleaners earning significant tip income (or who expect to) should consult a professional to plan for next year’s taxes, deductions, and compliance.

Industry-Wide Considerations

While the act is a step forward, experts note some concerns:

Only federal income tax is waived—payroll taxes still apply.
Employers may misclassify wages as tips to reduce tax obligations.
Non-tipped workers may feel excluded, which could add tension if not addressed by broader wage reform.

That’s why organizations like The CoBuilders remain committed to fair wages, equitable compensation structures, and scalable earning opportunities for all.

The CoBuilders' Commitment

We’re not just watching this legislation—we’re acting on it.

As a company that:

Serves residential, commercial, and government clients
Employs a nationwide network of professional cleaners
Invests in AI tools like SCRUBGPT to grow cleaner income and reduce admin strain

...we’re ready to help our workers make the most of this opportunity.

Whether through technology, transparent tipping practices, or advocacy, The CoBuilders continues to lead with one mission: empowering the people who keep America clean.

Final Takeaway

If passed into law, the No Tax on Tips Act could represent the largest income boost for cleaners in decades—without increasing client costs. It’s one more step toward recognizing cleaning as essential, skilled, and deserving of full economic dignity.

Stay tuned. Stay transparent. And stay ready to earn more.

Learn more or join The CoBuilders network today

Frequently Asked Questions

1. What is the No Tax on Tips Act and how does it affect cleaners?

The No Tax on Tips Act provides a federal income tax deduction for eligible tip income, subject to specific requirements and limits. For cleaners who regularly receive tips, the law could reduce federal income tax on qualifying tips if their occupation and income meet the eligibility requirements.

2. Are cleaning service tips tax-free under the No Tax on Tips Act?

Cleaning service tips may qualify for the federal income tax deduction if the cleaner's occupation is included in the Treasury Department's list of qualifying tipped occupations and all other eligibility requirements are met. Cleaners should accurately report their tips and consult a tax professional about their individual situation.

3. How much can cleaners deduct from their tips under the No Tax on Tips Act?

Eligible workers may be able to deduct up to $25,000 of qualified tips from federal taxable income, subject to the law's income limits and other requirements. The deduction applies to qualifying tips rather than regular wages, and payroll taxes may still apply.

4. Do house cleaners have to report cash tips?

Yes. Cleaners should report their tips accurately, including qualifying cash tips, rather than treating them as off-the-books income. Proper tip reporting can help workers maintain accurate records and determine whether they qualify for available federal tax benefits.

5. How can cleaners track and manage tips from cleaning services?

Cleaners can use digital tipping and payment tools to make it easier to receive, document, and track gratuities. The CoBuilders is developing app-based tipping features designed to give cleaners greater visibility into their tip income while supporting more transparent record-keeping.

6. Can I tip a cleaner after using a residential or commercial cleaning service?

Yes. Clients can tip cleaners when they feel the service deserves additional recognition. A tip can be given after residential cleaning, deep cleaning, move-out cleaning, commercial cleaning, or other eligible cleaning services. The CoBuilders is also working to make digital tipping more convenient through its platform.