In the hospitality industry, it is customary for guests to give tips. A tip is an additional payment as a reward for the quality of service. De Horecabond believes that tips are intended for everyone who has contributed or has been involved in the product.
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Distribution of tips in hospitality
The distribution of tips should be organised among the staff themselves. The employer does not typically share in the tips and also does not determine their distribution. Only if the employer genuinely works on the floor can they potentially share in the tips. Tips are increasingly being paid by card, which makes distributing them more challenging. It is therefore advisable to appoint someone to manage the tip pool.
Tax authorities
Tips are not subject to payroll tax as they do not constitute wages, but they are considered taxable income for income tax purposes. Therefore, you must declare your received tips as income when you file your tax return.
Employer must never withhold tips
In CLAs, such as in the CLA hospitality, nothing is specified about tips. There are also no legal provisions. However, there are rulings from the Supreme Court, known as case law, which establish that tips received by employees also belong to the employees. Therefore, the employer must never withhold tips.
Practical tips for determining tips
Nowadays, most cash register systems allow you to register tips separately. Below are some practical tips to easily calculate and distribute tips:
- Print out the total daily turnover
- Subtract all digital payments (debit/credit card/online/gift card)
- The remaining amount should be topped up to € 0 with cash in the till
- Count the remaining cash in the till and deduct the starting amount (the starting amount is the cash that was in the till at the beginning of the shift)
- The cash that is now left over is the tip
For example: turnover is € 1,500. A total of € 1,325 was paid by card. Therefore, € 175 must be handed in as cash. You have € 300 in cash. The starting amount was € 100. Your tip is then € 300 - € 175 (to top up turnover) - € 100 (starting amount) = € 25.
It may occur that less cash is received than the amount given as tips, especially now that less is paid in cash. This does not mean that the tip is not there. Therefore, it is important to keep track of this daily. Any shortfall in tips due to a lack of cash can then be settled on a day when more cash is received. You can also, in consultation, ask the employer to allow the tip to be paid by card and transferred to the responsible employee or have it transferred to a third-party account. It is a misconception that an employer must always pay tax on tips; this only applies to turnover, not to tips.