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Marsha411JD
Marsha411JD, Lawyer
Category: Employment Law
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Experience:  Licensed Attorney with 29 yrs. exp in Employment Law
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If I have an employee that I am paying well above minimum wage

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If I have an employee that I am paying well above minimum wage and they periodically receive tips, do they have to report those tips to me as the employer? I am in Michigan at a Golf Course.
Hello,

Thank you for the information and your question. Technically, under IRS regulations, any employee who receives $20 or more in tips per month is supposed to inform the employer, so that the employer may take the proper withholding from their paycheck. Of course, even if they do not report to you, they must report the tips on their taxes and pay the IRS and State on that income. You can see a summary by the IRS of the tip rules at: http://www.irs.gov/taxtopics/tc761.html

Please let me know if you need any clarification. I would be glad to assist you further if I can.
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Customer: replied 3 years ago.


So if I pay more then minimum wage, it has no effect on if they have to report tips to me or not. No matter what, if they make more then $20 a month, they must report it to me. Correct?

Yes, that is correct. It has to do with taxes and not minimum wage, so they are supposed to report it to you.