As someone that does both tour guiding and hotel check-ins, I'd love to be PunishedEdmontonian's client

Now, I don't know for other provinces but in Québec, tip-earners are taxed on their tips. Waiters have to report them and the tax agency has access to cash registers to make sure there's no fraud. When you tip under 15%, the waiter effectively pays it from his/her pocket.

This awful fiscal rule has made tipping pretty much mandatory, though of course nobody is allowed to tell clients!

Looks like the Quebec tax authorities are following the line of the U.S. I.R.S. where servers are presumed to have been tipped and are subsequently taxed on 15% unless they can prove otherwise.

In restaurants where tips are shared between all staff, how are calculations from CRA done there?

I'm just not seeing CRA going into every single cash register receipt roll and figuring out the 15%...

That was my thought. When I used to work in restaurants, the tips were pooled and distributed based on your position (host, waiter, bus). If its 15% of total receipts, then I know a lot of people who were owing a lot, and a lot of people who were under-reporting. In fact, I thought that tips were calculated by CRA as a minimum percentage of income as an hourly wage.

I'm pretty sure CRA does some kind of auditing of gratuity income at restaurants because I recall my dad reading an article in the Sun about a couple of former coworkers at a restaurant he used to work at getting nailed for under-reporting gratuity income. I don't recall if the article mentioned how these guys got on the radar of CRA though.

Well that's not quite right. i think the government and whatever trade organization represented the unions negotiated a settlement where the gov't taxed a presumed amount -- but it's not 15% it's somewhat lower. Actually I think it's not based on the receipt amounts at all. I think it's a percentage increase on their salary so it's hard to figure exactly what it comes to.

But it's more complicated than that too. The salaries are set based on the expectation of a certain amount of tips. Even the minimum wage is lower for jobs where tips are normal.

If you were negotiating a contract with a client or choosing between jobs at different employers you're certainly going to take into account any benefits you get whether they're health benefits, bonuses, or tips.

It's probably those fools reported zero tips (or close to it) for multiple years. CRA auditors have better things to do than running through cash register rolls.

In Ontario, the lower minimum wage is for "liquor servers", and it's $8.90 compared to the general $10.25 minimum wage. I assume this refers to the wait staff as well as bartenders in a licensed restaurant.

Agreed. I think the advice here is generally consistent with the discussion and advice in this thread. YMMV.

CRA? They are the nice guys. Nothing compared to Ministčre du Revenu. Those are the ones checking out cash registers to make sure they don't miss a penny.

I see you mean, though I can assure you it was decided unilaterally by the government.

In any case, YVR Cockroach used the right wording: you are presumed to have been tipped and taxed on the 15%.

Tipping is 10%-20%, and is OPTIONAL, not mandatory.

One should not feel bad for tipping, or tipping well for good service. One should not feel bad for not tipping, for any reason. It's your perogative.

In Canada, tips are subject to voluntary delarations of tip income. Most just declare that they are bad servers I would guess that the average server declares 1/10th or less of thier tips. Most pay no tax.

It's basically a tax free income. I have personal knowlegde of this. CRA has no interest in clamping down & politicians have no motivation to change it.

TIPS should be held and then distributed on an employess paycheck where tax and other deductions are properly deducted.

I would guess it's harder to not declare your tips if you are a server in a restuarant compared to being a bartender at a local pub. I rarely see people around me in a restaurant paying cash anymore, where in the local pub, most people pay cash as they get each drink.

It makes no difference. I worked at one of the bigest employers in town, where we would get hundreds of dollars of charge tips everyday (credit card and room charges combined). But at the end of the year, most of us would still claim zero on our income taxes. What makes you think this is hard to do?

Thanks, Sean.

Good to hear from someone with first-hand experience.

Tipping guidelines in Canada are similar to those in the USA.. One exception, is the Province of Quebec, where (for the most part) tip will be included as part of the bill.. (Similar to dining 8+ people elsewhere).