Ryan O'Meara
Question:467. Deputy Ryan O'Meara asked the Minister for Social Protection if he has given consideration to removing employer PRSI on customer tips and gratuities; and if he will make a statement on the matter. [53515/26]
View answerTuesday, 14 July 2026
Questions (467)
Written answers
Tips and gratuities received by employees from either routed through the employer or from the customer directly are liable for PRSI. There is no exemption from PRSI for such payments.
When tips or gratuities are routed through the employer, the employer must process these amounts through standard payroll. They must be included in the payroll submission for the period they are distributed and are subject to statutory deductions, including PAYE, USC, and both employee and employer PRSI.
When a customer hands a tip or gratuity directly to an employee with no employer involvement, the employer has no obligation to operate PAYE or PRSI. However, the employee is obligated to declare this supplementary income on their annual tax return.
I have no plans to remove employer PRSI liability on tips and gratuities. Any changes to exempt such payments from PRSI would have to be considered in a budgetary context, taking account of the economic circumstances and with a view to the sustainability of the Social Insurance Fund.
I trust this clarifies the matter for the Deputy.