Workplace Tippers: What Guidelines Are in Place?
In Germany, tips, often referred to as Trinkgeld, are voluntary extra payments from customers and are not legally mandated wages. They are generally regarded as the employee’s property if explicitly given as a tip.
The handling of tips often depends on collective agreements (Tarifverträge), company policies, or contracts between employers and employees or employee representatives (Betriebsrat). These agreements may regulate tip pooling, sharing among staff, or distribution.
In the hospitality sector (restaurants, bars, etc.), tips are commonly pooled and distributed among front-of-house staff (waiters, bartenders) and sometimes kitchen staff, based on internal agreements. Employers usually do not claim tips as income or include them in wages but must comply with tax reporting obligations.
German tax law treats tips differently from wages: tips given voluntarily by customers do not have social security contributions deducted, and usually are tax-free for employees if received directly from customers, not through the employer. Mandatory service charges are considered wages.
For other sectors with tipped employees, such as beauty or personal services, the rules are similar. However, it's essential to note that there are no specific German labor laws mandating how tips must be shared unless covered by collective agreements or internal company rules.
Employers tracking tips for tasks like payroll must distinguish voluntary tips from wages. The employer cannot collect tips for everyone, and the distribution of tips is not determined by the employer. Employees can keep the tips they have earned, but there can be labor or company regulations that allow for collection, such as a tronc system.
In package and delivery services, cash payment is recommended for tips, as electronic payment may not always reach the employees. The employer is not allowed to decide on the distribution of tips alone; the distribution must be traceable, for example, according to function, deployment time, or turnover participation.
Unlike tips, a service charge is a component of the stated price and must be paid by the customer.
It's also worth noting that there are no unified nationwide laws specifically regulating tip distribution rules across all professions in Germany. The presence of false self-employment concerns in gig work and freelancing in Germany means that tip arrangements in such contexts may be less formalized and depend on contractual terms.
In sum, while tips are common in many German professions such as hospitality and personal services, stipulations for distribution mostly depend on collective agreements and employer-employee arrangements rather than explicit laws. Tips given voluntarily to employees by customers are usually the employee’s income and are treated separately from wages, exempt from some social taxes. For precise rules, one must review professional collective agreements or internal workplace policies.
- In the business sector, employers tracking tips must distinguish them from wages, as tips given voluntarily by customers are not considered income and are exempt from certain social taxes.
- When it comes to finance and lifestyle, especially in sectors like hospitality and personal services, the distribution of tips often depends on collective agreements or employer-employee arrangements, rather than explicit laws.
