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March 1, 2024
Question

If I received controlled tips through my employer do I also have to claim them?

  • March 1, 2024
  • 1 reply
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- Tips are received from client
- Employer disperses tips amongst staff
- Tips are received on a private banking card (not cash)

    1 reply

    March 1, 2024

    Gratuities reported by the employer do not need to be tracked or claimed elsewhere on the tax return.

     

    As seen in our TurboTax article: Things to Know if You Work in a Restaurant or Pub

    • Controlled Tips: As the name suggests, these are the tips that are “controlled” by the owner of the business you are working for. The establishment collects all tips as income for the business and then distributes them to the staff as a part of their employment earnings, whether as part of a tip pool or to specific individual employees.  These tips are remuneration (earnings) to the employee and as such there are deductions to be made from the tip earnings just as would be from the hourly wage earnings. These tips, along with your hourly wages, will be paid on your pay cheque and are reported on the T4 slip you get in February. We go into further detail on the specifics in our Do I Need to Claim My Tips blog article.

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