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Tips

Excerpted from "Social Security Handbook". See the up-to-date, official Social Security Handbook at ssa.gov.

1329. Tips

1329.1 Do cash tips count as wages?

Cash tips you receive in the course of employment by any one employer are wages if the tips total $20 or more in a calendar month. This includes tips you receive:

  1. Directly from customers;

  2. From charge customers that are paid by your employer to you; and

  3. Under a tip-splitting arrangement.

1329.2 Do non-cash tips count as wages?

Non-cash tips, such as passes, tickets, or services, do not count as wages.

Note: A club, hotel, or restaurant may require customers who use its dining or banquet rooms to pay a service charge, that is given to the employees. The employee's share of this service charge is not a tip. It is part of wages paid to the employee by the employer.

(For special rules concerning employee tip reporting to employers and payment of FICA tax on tips, see §1408.)

Last Revised: March, 2001

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