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5610 Ward Road, Suite 300 Arvada, CO 80002

9200 E. Mineral Avenue Centennial, CO 80112

 

Phone:  303-252-0852

 

Website: www.walshfinancialsolutions.com

July/August 2022

Working For Tips

Under federal law, employers must pay at least $2.13 per hour, as long as the hourly wage combined with the tips received equals the federal minimum wage of $7.25 per hour or more. If not, employers must make up the difference. Keep in mind that many states require a higher hourly wage for tipped workers.


Community Tip Pool
Tip pooling is when the tips collected are put into a large “pool” and redistributed among a larger group of employees. Usually, a distribution rate is set by the employer and includes employees who don’t customarily receive tips like dishwashers, chefs, and cooks.

Employers, managers, and supervisors are prohibited from keeping employees’ tips. Like pay rates, states have their own rules for tip pooling that may go beyond the federal requirements.


Reporting
All cash tips are subject to Social Security, Medicare, and income tax. Employees are required to report monthly tip totals to the employer for tax reporting and withholding. Employers must retain tip reports, withhold taxes on the hourly wage and tip income, and deposit the tax with the IRS. In addition, employers are also responsible for paying the employer’s share of Social Security and Medicare taxes.


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Advisory Services offered through Walsh Financial Solutions or Vanderbilt Advisory Services. Securities offered through Vanderbilt Securities, LLC. Member FINRA, SIPC. Registered with MSRB. Walsh Financial Solutions and Vanderbilt Securities, LLC are separate and unaffiliated entities. Clearing agent: Fidelity Clearing & Custody Solutions. Insurance Services offered through Vanderbilt Insurance and other agencies. Supervising Office: 125 Froehlich Farm Blvd, Woodbury, NY 11797 631-845-5100
For additional information on services, disclosures, fees, and conflicts of interest, please visit www.vanderbiltfg.com/disclosures
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