Dáil Éireann Debate, Tuesday - 14 July 2026
218. Deputy Ryan O'Meara asked the Tánaiste and Minister for Finance if he will consider a no-tax policy on customer tips and gratuities, allowing hospitality workers to retain 100% of tips voluntarily given to them, whether paid by cash or electronically; and if he will make a statement on the matter. [53514/26]
View answerIt is a general principle of taxation that all income, from whatever source, is income for tax purposes, unless specifically exempted by legislation.
Section 19 of the Taxes Consolidation Act (TCA) 1997, provides that income from every public office or employment is within the charge to tax under Schedule E. Section 112 of the TCA 1997 brings into charge all salaries, fees, wages, perquisites or profits of any kind arising from an office or employment. Therefore, the long-standing position is that all tips, gratuities and service charges arising from an office or employment are chargeable to income tax under Schedule E in accordance with section 112.
Tips and gratuities from customers, for example service charges in hotels or tips in restaurants, paid to the employer and subsequently paid out to an employee should be included in pay for the income tax week or month in which they are paid out. These tips constitute pay for the purposes of the PAYE system.
Where an employee receives tips directly from customers, the employer is not obliged to operate PAYE. The tips and gratuities are subject to tax and should be included by the employee in his or her income tax return.
