Are you a Canadian employee who receives tips as part of your job? You may be wondering whether your tips are taxable or not. The answer is yes, your tips are taxable income.

The Canada Revenue Agency (CRA) defines tips as money that customers voluntarily give to employees in exchange for service. This includes tips received in cash, on a credit or debit card, or through a tip pool shared among employees.

When it comes to reporting your tips, you must keep track of all tips received, including those that were not reported on your paycheque. You must report all tips you receive on your tax return and pay taxes on them. Failure to report your tips could result in penalties and interest charges from the CRA.

It’s important to note that your employer is responsible for withholding taxes on your tips and including them in your T4 slip. If your employer does not withhold taxes on your tips, you are still responsible for reporting them and paying taxes on them.

You may be able to deduct certain expenses related to earning tips, such as uniforms, tools, and supplies. However, you must keep detailed records and receipts to support your claims.

If you have any doubts or questions about how to report your tips, it’s always a good idea to consult with a tax professional or the CRA.

In summary, if you are an employee who receives tips, it’s important to understand that your tips are taxable income and must be reported on your tax return. Keep detailed records of all tips received and consult with a tax professional or the CRA if you have any questions.