As an employer in the restaurant and hotel industry in Québec, you can claim a refundable tax credit on the employer contributions you’ve paid on tips received by your employees and any compensation earned by your employees (like vacation pay, statutory holidays and parental leave) that’s related to these tips.
Where you control your employees’ tips because service charges are added to the customer bills, you can claim the employer contributions you paid on these tips. In this case, the following requirements must be met in order for you to be able to claim the tax credit:
- The customer must pay a minimum of 10% of the billed amount in tip
- The customer is informed of the compulsory tip and of the percentage charged
- Any tip-sharing arrangement must be overseen by you
The contributions that qualify for this tax credit can be paid under several laws (such as the Act respecting Québec pension plan or the Act respecting parental insurance). Check the Revenu Québec website to see if your contributions qualify for the tax credit for the reporting of tips.
Where do I claim this?
Follow these steps in H&R Block's tax software to file your 2016 taxes:
Before you start, make sure you’ve told us that you lived in Québec on December 31, 2016.
- Under the PREPARE tab, click the OTHER icon. You'll find yourself here:
- Under the OTHER DEDUCTIONS heading, select the checkbox labelled Other Québec tax credits.
- When you arrive at the page for Other Québec tax credits, enter your information in the field labelled Tax credit for the reporting of tips.
Where can I learn more ?
- Tax Credit for the Reporting of Tips – Citizens (Revenu Québec website)
- Questions About Tips: Employers (Revenu Québec website)