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Submitted 189 days ago...

M-1993

M-1993

New User (1)

Can an employer take your tips away from you and use them as part of your payroll hours after he has taxed them?

On my check stub you have your hourly pay, your product pay, and your tips. I get $8 per hour and 10% for products and then any tips that have been logged in by credit card. They each get taxed and them my tips are subtracted from the total.

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Answer 1 / 1 - Submitted 189 days ago...

Reader

Reader

Expert (707)

That's a pretty close description of how tipped occupations are handled.
According to tax law, tips are part of your income for both income tax and FICA purposes.
The IRS has a good idea of how much tipped staff receive, they have charts and schedules that tell them by percentage, and if you and your employer aren't reporting enough tips received, they will require the employer to presume you received them anyway. That's why the employer has to track the tips, add them in and then subtract them back out.

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Can an employer take your tips away from you and use them as part of your payroll hours after he has taxed them?

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