For a given pay period, you must allocate tips to your employees whose tips represent less than 8% of their tippable sales (or a rate we determined after receiving form TP-42.15-V, Request for a Reduction in the Allocation Rate).

You do not have to allocate any tips to employees who did not make any tippable sales during the pay period (valets, door attendants, porters, delivery people, etc.).
Likewise, you do not have to allocate tips to the following employees:

• employees who receive 90% or more of their tips through the redistribution of the tips received by other employees;
• cloakroom attendants;
• if your business is a corporation, employees who hold more than 40% of the voting shares at the end of the pay period (the same also applies if the employee's spouse holds the shares);
• if your business is a partnership, employees whose spouse would be entitled to more than 40% of the partnership's profits at the end of the pay period if, for the purpose of determining the spouse's percentage interest, it were assumed that the end of the partnership's fiscal period coincides with the end of the pay period and the partnership's income for the fiscal period is equal to $1 million;
• if you are the sole proprietor of your business, an employee who is your spouse;
• employees who receive 90% or more of their tips as mandatory service charges paid by customers (controlled tips), if the following conditions are met: 
  • service charges represent at least 10% of the tippable sales in all or nearly all cases,
  • customers are informed of the mandatory nature of the charges, and
  • you manage any tip-sharing plan in place.