Originally Presented: October 6, 2022
Join Restaurants Canada and James Rhodes, BSc, LLB, of Taxation Lawyers for a conversation, on tip-out systems that protect your business from this liability!
The Federal Court of Appeal ruling recently upheld a lower court’s decision regarding a Halifax restaurant’s obligation to submit income tax, Employment Insurance, and Canada Pension Plan contributions on employee gratuities. This case relates to electronic tipping in the restaurant and how those tips were handled and distributed among employees. Restaurants must now submit approximately $100,000 in source deductions on electronic tips to the Canada Revenue Agency (CRA).
As this decision is not the first time our tax courts have ruled on this issue, the case illustrates the need for restaurateurs to ensure their tip-out systems protect their business from liability. To help you understand the liability and avoid a similar situation, James Rhodes, BSc, LLB, of Taxation Lawyers will join us to discuss:
- How gratuities should be kept separate from sales revenue and payroll in a separate non-business-related account that is managed and dispersed by employees
- How the tip-out system is voluntary and what this means
- How to protect yourself and your business from tip-out liabilities
James Rhodes, BSc, LLB, has been helping restaurants implement tip-out systems that make gratuity distribution as easy as possible for employees while protecting restaurants from potential liabilities associated with EI and CPP.
Speakers
James Rhodes
BSc, LLB
Taxation Lawyers
Richard Alexander
Vice President, Atlantic Canada
Restaurants Canada
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