Tipped Employees

State Technical College of Missouri defines tipped employees as an employee engaged in an occupation in which he or she customarily and regularly receives more than $30 a month in tips.  Employees who receive $20 a month or more in tips from customers are required to report this income to State Tech and on their tax returns. Tips are reported to State Tech payroll on a monthly pay period basis.

For the purpose of this policy, tips are defined as discretionary (optional or extra) payments determined by a customer that employees receive from customers and include:

• Cash tips received directly from customers.
• Tips from customers who leave a tip through electronic settlement or payment. This includes a credit card, debit card, gift card or any other electronic payment method.
• Non-Cash tips, such as tickets or other items of value.

The value of any noncash tips, such as tickets or other items of value, must be reported as income on the employee’s tax return but do not have to be reported to the employer.

Employee Reporting

Tipped employees retain the tips they earn and keep a daily record of all tips received and report weekly to their supervisor. Employees complete a monthly summary of tips and submit, through their supervisor, to State Tech payroll no later than the 1st day of the following month. Employees are not required to report service charges added to the customer’s check by the employer. Employees are not required to report tips if tips received are less than $20 in that month.

Tax Withholding

State Tech claims tip credit as part of the tipped employee salary. Tip credit will not exceed 50% of the state minimum wage nor the amount of tips received by the tipped employee.  Employees earning less than minimum wage, after wages and tips, will have their wage increased for that week to meet state minimum wage requirements. State Tech occupations that are included in tip credit are waiters, waitresses, and bartenders. State Tech withholds income taxes and the employee’s share of Social Security tax and Medicare tax based on the wages and tips reported by the employee. Reported tips will be included as wages in Box 1 of the employee’s W-2 as taxable income.

LINE OF AUTHORITY

Responsible administrator or office: Human Resources

Contact person in that office: Amy Ames

EFFECTIVE DATE: August 16, 2023

Approved by President: August 16, 2023