Can the 8% – normally used for allocated tips – be a matter agreed upon as reported tips between the employer and employees, so that the employees do not have to report the exact amount of their tips?
No. The law requires that the employee who receives tips must report the actual tip amount to his or her employer if the amount is $20 or more for that calendar month. The 8% figure is not a simplified reporting method. The employee should keep a tip record of his or her daily tips. A daily tip record can relieve the employee from having to include allocated tips in income by documenting that the amount of tips the employee reported were the actual amount received.
