Tips to Add to an Employee's Salary or Wages

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Source deductions of income tax, QPP contributions and other employer contributions

In calculating an employee's source deductions of income tax, Québec Pension Plan (QPP) contributions, and the contribution to the health services fund and the contribution related to labour standards, you must add the following tips to the basic salary or wages:

  • tips that result from tippable sales and that are reported to you by the employee during the pay period on the Register and Statement of Tips (TP-1019.4-V) or an equivalent document;
  • tips that are unrelated to tippable sales (for example, tips the employee received as a hotel valet, porter, doorman or cloakroom attendant) and that are reported to you by the employee on the Register and Statement of Tips or an equivalent document;
  • tips that, because they constitute service charges added to a customer's bill, are distributed to the employee for the pay period and do not have to be reported on the Register and Statement of Tips or an equivalent document;
  • tips that you allocated to the employee for the pay period because the amount of tips reported was less than 8% of tippable sales (or was less than the percentage that we set further to a request for a reduction in the tip allocation rate).

QPIP premiums

In calculating an employee's eligible salary or wages under the Québec parental insurance plan (QPIP), you must add the following tips to the basic salary or wages:

  • tips that result from tippable sales and that are reported to you by the employee during the pay period on form TP-1019.4-V or on an equivalent document;
  • tips that are unrelated to tippable sales (for example, tips the employee received as a hotel valet, porter, doorman or cloakroom attendant) and that are reported to you by the employee on form TP-1019.4-V or an equivalent document;
  • tips that, because they constitute service charges added to a customer's bill, are distributed to the employee for the pay period and do not have to be reported on form TP-1019.4-V or an equivalent document.

You are not required to add tips that you allocated to the employee for the pay period because the amount of tips reported was less than 8% of tippable sales (or was less than the percentage that we set further to a request for a reduction in the tip allocation rate). These tips are not subject to QPIP premiums.

Important

When you cannot make all the source deductions because an employee's basic salary or wages (in cash) are insufficient, deduct amounts in the following order:

  • Employment Insurance premium;
  • federal income tax;
  • QPP contribution;
  • QPIP premium;
  • union dues; and
  • Québec income tax.

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