Employees Who Receive Tips

You must report your tips to your employer at the end of each pay period if you work in one of the following:

• an establishment that is specially laid out to ordinarily provide accommodation or food, or both, in return for remuneration (except establishments where payment is made on a weekly or monthly basis) 
• an establishment where alcoholic beverages are sold for consumption on the premises  
• bus, train or vessel on which meals and alcoholic beverages are served 
• a business (such as a caterer) that sells, delivers and serves meals for consumption elsewhere than on the premises

Note

Cafeterias, educational institutions, hospitals, shelters and charities that provide food and beverages on an irregular basis are not covered by the tax measures respecting tips as is the case with fast-food establishments where the employees do not ordinarily receive tips.

The advantages of reporting the full amount of your tips include:

• greater protection if you lose your job or have a work accident 
• an improved standing with financial institutions 
• a pension paid under the Québec Pension Plan during your retirement which is based on all your income 
• the possibility of having a higher RRSP contribution ceiling 

If your tips represent less than 8% of your sales, a measure known as the tip-allocation mechanism applies.