Couriers are amazing. They brave all types of weather – cold, rain, heatwaves… all to ensure the customer receives their food, fresh and warm. To say thank you, our consumers often show their appreciation in monetary form, with a tip.
While consumers can pay tips in cash, they now have the option to pay tips online via our platform. This is part of our contactless delivery initiative to help limit contact between courier and customer.
Did you know that in many European countries, employers are required to report and withhold the taxes on tips earned by their couriers?
Check out our flowchart below to discover if and when you have reporting and withholding obligations for the tips received by your couriers.
How are courier tips reporting and withholding obligations determined?
Is the courier your employee? Do you use the Takeaway.com delivery service? Or maybe you use an external contractor for deliveries? The relationship the courier has to your restaurant influences your employment tax obligations.
How the tip is given.
Your customer may give a tip digitally or in cash. How the customer tips also has an effect on your employment tax obligations.
I use the Takeaway.com delivery service. Do I still need to report and withhold taxes for these tips?
In short, no. Takeaway.com couriers can receive tips when delivering food from your restaurant. You only make use of our delivery service but you don’t have a relationship with the couriers. This means you don’t have an employment tax reporting and withholding obligations on any tips they earn. We take care of it.
The Takeaway
Your employment tax reporting and withholding obligations on tips come down to three main factors – the relationship between the courier and the restaurant (employee, self-employed or other), how the tip was given (cash or digital), and local tax legislation. Do you see that you have a reporting and withholding obligation in relation to the tip, based on the flowchart? Then you should withhold tax and/or social security contributions, for the tip, through your local payroll.
