They overlap heavily but the current 2026 usage distinction is worth knowing because Material Design 3 and iOS Human Interface Guidelines both codify it, and tier-1 SaaS design systems (Vercel, Linear, Notion, Stripe, Shopify Polaris, Airbnb DLS) follow the convention.
Chip — an interactive element the user can click, dismiss, or toggle. Material Design 3 defines four chip variants (assist, filter, input, suggestion) and every one has a hit target, not just a visual. Filter chips (Demo 01), tag input chips (Demo 02), dismissible chips (Demo 05, 19), and drag-to-reorder chips (Demo 17) all belong here.
Tag — a label attached to content, usually clickable to filter or navigate, but sometimes purely informational. Blog post tags, LinkedIn skills, Notion database tags, Shopify product tags. Overlaps ~90% with 'chip' in practice; use the term your users know from the product they're modelling.
Pill — the visual shape (fully-rounded rectangle, border-radius: 999px), independent of function. A chip can be pill-shaped or square; a badge can be pill-shaped or circular.
Badge — a small non-interactive indicator attached to another element. Notification counts on app icons (Demo 20), status dots on avatars (Demo 03), workflow state indicators (Demo 24). Badges rarely have hit targets. See our sibling
30 CSS Badges collection for badge-only patterns. Rule of thumb: if a user clicks it, it's a chip. If it just tells the user something, it's a badge. If it's a link with a filter action, it's a tag. If it's pill-shaped and interactive, it's all three.