The integration of POS systems with cash registers, along with a 2019 Supreme Court ruling that classifies tips as part of wages, brings the taxation of electronic tips into focus.
In recent years, tips have been given in cash, as was traditionally the case, and electronically, as the POS system prompts customers to leave a tip for employees. This amount is considered “part of the wage.”
The president of the Attica Restaurant Association, G. Deveronis, told fyi.news that a clarifying ministerial decision on the taxation of tips is still pending.
The Supreme Court decision says explicitly: “Tips voluntarily given to an employee by the employer’s customers for the service provided are considered part of the wage only when, based on an explicit or implicit agreement between the employer and employee, the employer allows the employee to receive the tips, and they are regularly collected, thereby increasing their earnings.”
The issue came up because, according to the Independent Authority for Public Revenue (AADE), restaurant revenues appear higher due to tips collected via POS systems, resulting in additional deductions for businesses.
Due to the Supreme Court decision, employees will receive a reduced tip amount as social security contributions will be deducted.
Business owners must record tips in the POS system; otherwise, their total income will appear higher than what has been issued in receipts, leading to penalties.
