Does the employer have to pay health and social insurance contributions from employees tips if they are registered? The Ministry of Finance explains the issue of the tax on tips.
The company operated casinos in accordance with the Gambling Act. It had it’s own inner principle that anyone who got a tip could keep it to themselves. This form of gratitude for the benefits was recorded. (…) Is the employer then obliged to pay contributions to ZUS from tips? – writes MP Adam Ołdakowski in a question to the Ministry of Finance.
The Ministry of Finance, in answer to the Member’s question, leaves no doubt that a tip is also earnings, although according to the case law – it is not salary. The PIT Act distinguishes several sources of income that are taxable. It is about those sources that result from the employment relationship, i.e. all kinds of cash payments and the monetary value of benefits in kind or their equivalents, regardless of the source of funding for these payments and benefits.
This means that even considering that the source of the tips is the generosity of casino players, the fact of working in the casino is an objective circumstance (necessary) to receive this payment – we read in the reply of the Ministry of Finance.
It is common practice to divide the tips between employees by the employer. In casinos, a tipping record is a legal obligation of the taxpayer. Thus, if the tips were paid by the employer – they are income from the employment relationship and constitute the basis for the assessment of contributions for pension and disability insurance and for health insurance. The employer will also not avoid the obligation to pay tax on such tips. The issue of tax qualification of income from tips obtained by casino employees has been repeatedly discussed in case law.