Info

VAT and Tax on Tips

VAT and Tax on Tips

From 1 December 2022, the Payment of Wages (Amendment) (Tips and Gratuities) Act 2022 introduces new rules as to how employers will have to distribute tips, gratuities and service charges amongst employees. Employers will be required to clearly display their policy on how tips, gratuities and services chargers are distributed.

Where a tip is included on the bill i.e. as a service charge, it is regarded as part of the consideration for the meal and is liable to VAT at the second reduced rate, currently 9%. However, voluntary payments (tips) made by customers and not appearing on the bill remain outside the scope of VAT.

Tips and gratuities are fully taxable and should be included by employees in their tax returns to the extent that the tips are voluntary payments by customers. However, if the tip appears on the bill, then these tips should be taxed through the PAYE system by the employer.

Contact Details

Book an appointment with a financial expert

 

Gannon Kirwan Somerville website

Unit 5, The Courtyard Business Centre,
Orchard Lane, Blackrock,
Co Dublin.

Eircode: A94 Y6C3

Phone: 01 284 2544
E-mail: post@gks.ie

GOOGLE MAPS

Contact Form

Please tell us which treatment that you are interested in.
Please type your full name.
Invalid phone number.
Invalid email address.
Invalid Input
Invalid Input

Phone/ Email
Office Address

Unit 5, The Courtyard Business Centre,
Orchard Lane, Blackrock, Co Dublin.
Eircode: A94 Y6C3 - GOOGLE MAPS

Pay Online

Invalid Input
Invalid Input
Invalid Input
Invalid Input
0.00 EUR

Note that fees apply when using Stripe's payment gateway (2.9% + €0.25 per transaction).
Image