I’m a busser or host living on tip-outs. What counts, and what do I report?
The short answer
Example math
You bus tables at a restaurant. In March, four servers tip you out after their shifts, and one regular hands you cash directly.
| From | Amount |
|---|---|
| Server A | $140 |
| Server B | $110 |
| Server C | $95 |
| Server D | $75 |
| Cash from a regular, handed to you | $30 |
| Total for March | $450 |
- You report $450 to the restaurant by April 10 (the next business day if the 10th falls on a weekend or holiday). One report can’t cover more than one month.
- You also work Sunday host shifts at a coffee shop. In March, your tip-outs there came to $15. That’s under $20 from that job for the month, so you don’t report it to that employer. It’s still income on your tax return.
- Say every month at the restaurant looks like March: $450 × 12 = $5,400 in reported tips on your W-2, well under the $25,000 cap.
- Say your marginal rate is 10% (illustrative; enter your own). Illustrative federal income-tax savings ≈ $5,400 × 0.10 = $540. Social Security and Medicare still apply to the $5,400.
Not tax or legal advice. The amounts are an example. Your servers’ tip-outs will be different.
Check your estimate
Enter the tip-outs you received and reported, plus any tips customers gave you directly.
Open the calculator
Plain English
Why you report money the servers handed you
For taxes, IRS Publication 531 tells servers to report only what they receive and keep, and tells everyone who gets tips from other employees to report those too. The IRS tip page says both directly and indirectly tipped employees must report tips to their employer. So the $420 from servers in March only gets reported once: by you. If you skip it, it never makes it onto your W-2, and the federal deduction counts only tips that show up on your W-2 (box 12, code TP, for 2026) or that you report on Form 4137.
A tip diary, a notes app, or your employer’s tip system all work for tracking. What matters is writing down each tip-out as you get it.
The busser’s wage-law trap: the house skimming your tip-out
Federal wage law says the tip-outs servers give you are your tips once you have them. Your employer can’t keep any part of them, whether it pays you the $2.13 federal tipped cash wage or at least $7.25. If you’re on the tipped cash wage and the house runs a required pool, DOL lists bussers among the jobs that can be in it.
If the house holds back part of your tip-outs for itself, an employer can be liable for tips it unlawfully kept plus an equal amount on top. The U.S. Department of Labor’s Wage and Hour Division takes complaints. Your state may have stricter rules. See What can I do if my employer keeps part of our tips?
The host’s wage-law and tax trap: when “host” means manager
Host staff (109) lists maître d’hôtel and dining room host as examples on the IRS list. If your host job also means running the floor, read this part. Federal wage law bars managers and supervisors from receiving tips from a pool. The test is duties, not job title or salary: your main job is managing, you regularly direct two or more full-time employees (or the equivalent), and you can hire or fire, or your say on it carries particular weight.
That carries over to taxes. Pool money a manager or supervisor receives isn’t qualified tips. Tips a manager gets directly from customers while working a listed job can still qualify. If you seat guests and also direct the floor staff, check your actual duties against that test before you count pool money.
Two jobs, two codes
If you bus some shifts and host others at the same restaurant, your 2026 W-2 can list up to two occupation codes in box 14b, here 104 and 109. The $20 test applies job by job, so the coffee shop is measured on its own. More on this: Which jobs qualify for the federal tip deduction?
Common mistakes
- Skipping your monthly tip report because the tip-outs came from servers, not customers.
- Reporting to your employer late. The deadline is the 10th of the next month.
- Treating the under-$20 rule as “not taxable.” It only means you don’t report it to that employer.
- A floor manager with a host title taking a share of the pool.
Official sources
- IRS Publication 531, Reporting Tip Income (tips from other employees; under-$20 rule; reporting by the 10th)irs.gov
- IRS: Tip recordkeeping and reporting (directly and indirectly tipped employees)irs.gov
- IRS: Occupations that customarily and regularly received tips (codes 104 and 109)irs.gov
- 2026 General Instructions for Forms W-2 and W-3 (box 12 code TP, box 14b)irs.gov
- U.S. Department of Labor, Fact Sheet #15B: Managers and Supervisors Under the FLSA and Tipsdol.gov
- U.S. Department of Labor, Fact Sheet #15: Tipped Employees Under the FLSAdol.gov
Last verified:
Checked IRS Publication 531 and the IRS tip reporting page on tips received from other employees, the under-$20 rule, and the 10th-of-the-month deadline; the IRS occupations list (codes 104 and 109); the 2026 W-2 instructions; the manager rule in 26 CFR 1.224-1; and DOL Fact Sheets #15 and #15B.
Still open: Whether small tips that fall under the $20 rule and never reach your employer can count toward the deduction. The guidance we checked says the deduction counts tips on your W-2 or Form 4137, and doesn’t address those amounts directly.