The planned new tip flat rate

The final enactment is still pending, but in sectors where tips are part of everyday practice it is important to start preparing for the planned changes now.

Tips are exempt from income tax, but they count as assessable earnings for statutory social security contributions. This is not intended to change in principle. However, nationwide uniform tip flat amounts are to be introduced for the purpose of calculating social security contributions. These flat amounts will be set for the individual occupational branches and raised gradually.

For the hotel and catering sector a proposal for a graduated monthly tip flat amount is already available, distinguishing between staff with collection duties and those without:

• 2026: EUR 65 (with collection duties), EUR 45 (without collection duties)
• 2027: EUR 85 (with collection duties), EUR 45 (without collection duties)
• 2028: EUR 100 (with collection duties), EUR 50 (without collection duties)

The flat amounts represent maximum amounts. If the actual tips paid are higher, no additional social security assessment base arises, and a subsequent contribution assessment is therefore excluded. If the tips are demonstrably lower, this lower amount may also be used as the contribution base.
The regulation applies only to sectors where tips are customarily paid. It does not apply to employees in businesses where tips are typically not incurred (such as fast‑food chains or nursing homes).

Information of the employee about the tip arrangement

Labour law aims to increase transparency. In the future, employers must inform their employees at the start of the employment relationship about the key of the tip arrangement. In addition, employees may request information about cash‑less tips received, provided these are not already distributed promptly or on the same day.

For the area of wage tax the Ministry of Finance has recently clarified the following:

• When assessing the customary level of tips, the focus must be on the amount of tip actually received by each individual employee, not on the total amount of tips given. The ratio of the monetary tip to the employee’s wage is not decisive.
• The tip must be handed to the employee by a third party. A tip from a third party also exists when tips are received from other employees (e.g. other waiters) or from the employer itself and passed on to the employees, for example when the employer forwards credit‑card tips to the employees. Tips collected in a tip‑distribution system (such as a tronc system) and distributed to employees according to a pre‑determined key, whether this key is agreed verbally or in writing (e.g. in the employment contract), also fall under the tax exemption.
• Tips received by the employer that are not passed on to employees are treated as business income for the employer.