10. Tax credit for the reporting of tips (Line 462)
If you or a partnership of which you were a member carried on a business in the restaurant and hotel sector in Québec, you may be entitled to a refundable tax credit for the employer contributions that you or the partnership paid to the governments of Québec and Canada on:
- tips received by or allocated to employees; and
- the tip-related portion of your employees' indemnities (vacation pay and indemnities for statutory holidays, for family or parental leave and for leave taken to fulfill family obligations or for health reasons).
The credit can also apply to the employer contributions paid on an employee's tips if you control substantially all of the employee's tips because service charges are added to the bill. In such a case, the following conditions must be met:
- The required tip is almost always at least 10% of the tippable sales.
- Customers are informed of the compulsory tip and the percentage charged.
- You administer any tip-sharing arrangement in effect.