Starting November 1, Greece will make tips up to 300 euros per month tax-free for catering and personal care workers, with any amount above this threshold subject to tax. Tips paid electronically will be automatically reported by employers as additional income, exempt from insurance contributions, and taxed if they exceed the monthly limit.
Further clarifications on tip taxation in Greece
Public
Greece
Author: Tara Nedeljković
Category:
Fiscal subject related
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103
Content accuracy validation date:
06.11.2024
Content accuracy validation time:
07:59h
Recent clarifications on tip taxation in Greece have been published, detailing significant changes.
The expected effect starting from November 1st: Starting November 1st, the Ministry of National Economy and Finance announced that tips up to 300 euros per month will be tax-free for workers in catering and personal care services. However, those that exceed 300 euros a month will start to be taxed. Additionally, tips will be exempt from insurance contributions, regardless of the amount.
What is the way the tip will be declared by the employer, i.e., trader? Employers must record tips paid through electronic transactions (e.g., via EFT-POS) as additional remuneration and attribute them to employees. Tips paid via POS are automatically declared by the employer and included in the employee's total earnings, requiring no further action from the employee. Any tip amount exceeding 300 euros per month is taxable, similar to salary, with the employer ensuring the necessary taxes are withheld.
Handling cases that could occur, such as if an employee receives a tip of 200 euros one month and 350 euros the next: If an employee receives 200 euros as a tip in one month, it will not be taxed. However, if they receive 350 euros the next month, they will be taxed on the 50 euros exceeding the 300-euro threshold. The extra amount above 300 euros will be taxed along with the rest of the employee's taxable income, as tips are subject to the same income tax rates.
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