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Not following. Don't tips go directly to the recipient without any reductions?
by waihtis 6y ago
Not following. Don't tips go directly to the recipient without any reductions?
- ornornor 6y agoDon't know about US, but in Canada you're supposed to report them as income and pay taxes on them.
- tyrust 6y agoThey do, but in many states it goes towards your minimum wage. https://en.wikipedia.org/wiki/Tipped_wage https://en.wikipedia.org/wiki/Tipped_wage The most extreme example is in a state like Alabama where the minimum wage is $7.25 and the minimum tipped wage is $2.13 (these are the federal minimums): +------------+----------+----------+ |Tips |Wage |Final | | | |Wage | +------------+----------+----------+ |0 |7.25 |7.25 | +------------+----------+----------+ |<5.12 |7.25-$tips|7.25 | | | | | +------------+----------+----------+ |>=5.12 |2.13 |2.13+$tips| | | | | +------------+----------+----------+ So your first 5.12 (=7.25-2.13) in tips are worth nothing. Of course, you can eventually earn more than the minimum wage, in which case the tips aren't exactly worth nothing, but they are worth the value of pushing your final wage above this threshold.
- waihtis 6y agoThanks! By the way, I don't think "tipped wage" is at all a known concept outside of the US (for instance, I didn't know it works this way.)