Tips & Gratuities

As we head into the new tax year, 2023, there are many changes that are coming in to effect as a result of Budget 2023. It is important that, you as an employer be aware of these changes from a Revenue perspective and an employee rights perspective as a number of them will affect all employers in some way. Please familiarise yourself with the changes and contact us if you require more information. Below is a brief summary of some of the changes.

Tips & Gratuities:

  • Payment of Wages (Amendment) (Tips and Gratuities) Act 2022
  • Commenced 1 st December 2022

Main provisions

  • Amends the definition of wages to exclude tips, gratuities and service charges from the definition of wages.
  • Requires employers to distribute electronic tips or gratuities (and service charges) to employees in a fair manner. Service charges (whether paid by the customer electronically or in cash) will be treated as if they were an electronic tip or gratuity.

Prohibits employers from:

  • Using electronic tips and gratuities (or service charges) to make up part of an employee’s contractual wages,
  • Deducting electronic tips and gratuities (or service charges) from an employee’s contractual pay,
  • Requires employers to issue a statement to an employee within 10 days of any such distribution of tips or gratuities, outlining the total amount of tips or gratuities distributed by the employer for the period to which the statement relates, and the amount distributed to that employee.
  • Requires employers (or operators of websites or apps who engage contract workers) to clearly display a Tips and Gratuities Notice.

The Terms of Employment (Information) Act 1994 was amended so employers will have to provide information to employees on how tips, gratuities and service charges are distributed in the written statement of core terms of employment within 5 days of commencing work.

** Tips paid by employer are taxable – employees should declare tips received personally **

Contact Us:

To discuss in confidence what the measures mean for you or your business, please contact our team outlined below, or your usual RBK contact.

  • Mary Byrne, Payroll Manager (090) 6480600
  • Yvonne Clarke, HR Solutions Manager (090) 6480600

Return to Budget 2023 Update – Changes coming into effect for employers.

Team Members

Rose Bracken

Payroll Director

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Yvonne Clarke

HR Solutions Manager

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