Reported Tips Definition

Term Definition
Employees working in service-based industries like food and beverage, where tips are customary, are required to report their tip income. These tips are known as reported tips.

Extended Definition
In service-based food and beverage establishments, tips are a major part of employee compensation. Tip income refers to earnings received in addition to hourly wages or salary. They may be offered in the form of check, credit card or cash. Tips are a part of an employee’s overall income and need to be reported to the employer as well as the IRS (Internal Revenue Service). These tips are called reported tips.

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