Hi all,

Quick question, my daughter has a job in a restaurant and has just been promoted to a server/waitress for some shifts. What happens at tax time? Should she be keeping a note of her tips? I have suggested she saves some for tax time, but would like to have an idea how much she will likely to have to part with.
TIA

By the book? She should keep a record of all the tips she gets to keep and put them on line 104 of her tax return. If her total income for the year is less than $11,000 then she will not pay any tax. Between $11,000 and $16,000 15%, greater than that 25%.

Common practice is that many people declare 10% of their T4 income as tips. I don't recommend this as it likely understates most server's income but is better than putting nothing - the CRA know perfectly well they are earning tips.

Thank you for that, I'll get a book for her to keep a record.

Remind her to grin like an idiot as she presents the bill

My friend says that she declares 25% (been doing it 15 years) and never had any grief off of the revenue

Drawing a smiley face or a heart on the bill is a good way to manipulate people into giving more tips.

What's the going rate for leaving tips - 10%? 15%? I assume the same for the pizza delivery guy etc too?

Writing your name upside down on the paper tablecloth is a sure-fire hit with customers too.

I'm surprised that the CRA lets people away with 10% declared as tips. I knew a Calgary barman who said he made $11/hour basic, and "at least that again" in tips.

Assuming the service and food is at least satisfactory I leave 15%, excluding the taxes of course. For a pizza delivery person I give him/her a flat $2.

She is regretting doing her best to lose her English accent, she is trying to reclaim it though

' server/waitress for some shifts.'

Off the record, don't bother. Don't pay any of the tips into her bank account in case she is audited. A waitress wage is so low I doubt it would be a fuss.

haha seen this, they get a shock when I have paid lol

Jack Astors?

When I speak to Canadian co workers, I am still amazed that they leave tips when they have had crappy service, I know it is an entirely different culture here for tips from restaurant to cab drivers to hair dressers to even someone at work who makes cakes for fun!, but they still tip regardless of the service!

That is really not a good idea. People in hospitality earn tips. The CRA knows that. Declaring no tips can raise a red flag.

You are right. But I used to run a bar, so my advice is only based upon my own experience.

Many of the waitresses we hired were from out of province and it was entry level job to get to other levels. To be honest there is by the book and then how it is really done. By all means, declare tips.

But they(waitresses) earn so low and the hours are horrible. Investigating them for tax evasion, its miniscule in comparison to what I have seen some people dodge.

I leave 15% if the service is acceptable or better.... and zero if it's crap.

Talking to a dental hygienist yesterday, who worked as a waitress for a year only declared 10% of her tips, 8 years on she is investigated still every year - I want my daughter to avoid this. BTW Canadian restaurant staff don't seem to work the atrocious hours that UK restaurant staff work.