How do I keep track of my tips?
The short answer
Example math
Youâre a server. Here are three shifts from your log in one month (all amounts illustrative):
| Date | Cash tips | Card tips | Noncash | Paid out, to whom |
|---|---|---|---|---|
| Mar 3 | $85 | $140 | $25 to Sam (busser) | |
| Mar 6 | $120 | $260 | Concert tickets, $40 value | $45 to Sam, $20 to Ana (bar) |
| Mar 7 | $150 | $310 | $50 to Sam, $25 to Ana | |
| Total | $355 | $710 | $40 | $165 |
- Cash plus card: $355 + $710 = $1,065.
- Take out what you paid to other employees: $1,065 â $165 = $900. Thatâs the number you report to your employer for March.
- The $40 in tickets doesnât go on your report to your employer, but it still goes on your tax return.
- The report is due by April 10, or the next day that isnât a Saturday, Sunday, or legal holiday.
Not tax advice. Names and amounts are made up for the example.
Plain English
Why the IRS wants a daily record
Publication 531 gives three reasons: so you can report your tips correctly to your employer, report them correctly on your tax return, and prove your tip income if your return is ever questioned. A log you fill in each shift does all three. One rebuilt from memory in April does none of them well.
What to write down each workday
- The date.
- Cash tips you get directly from customers or from other employees (tip-outs and pool shares you receive count).
- Card tips from credit and debit card customers that your employer pays you.
- The value of noncash tips, like tickets or passes.
- What you paid out to other employees through tip pools, tip splitting, or other arrangements, and the names of the people you paid.
Put your name, your employerâs name, and the business name (if itâs different) at the top once.
What stays out of the log
A service charge your employer adds to the bill and pays you as wages is not a tip. Pub 531âs example is an automatic 18% charge on a large party. Leave that out. If the customer could write any amount on a blank tip line, or added extra on top of the service charge, that part is a tip and goes in.
Two ways to keep it
You can write your tips in a tip diary, or keep copies of documents that show them, like restaurant bills and card slips. A notebook, a phone app, or a printed sheet all work as a diary. If you use an electronic system your employer provides, the IRS says you must get and keep a paper copy of that record.
Print a blank log
This sheet has a column for each thing Publication 531 asks for. Print it, keep it with your apron, and fill in a row every shift.
Free printable tip log
One page, one row per shift, with the columns IRS Publication 531 lists for a daily tip record.
| Date | Cash tips from customers | Cash tips from coworkers (tip-outs received) | Card tips paid by employer | Noncash tips (value) | Tips paid out | Paid out to (names) |
|---|---|---|---|---|---|---|
| ⌠| ⌠| ⌠| ⌠| ⌠| ⌠| ⌠|
Report to your employer once a month
Give your employer the monthâs tips by the 10th of the next month. If your employer doesnât give you another way to report, a signed and dated statement works. It needs your name, address, and Social Security number; your employerâs name, address, and business name; the month; and the total. Keep a copy. Your employer can ask for reports more often, but one report canât cover more than one calendar month.
If your tips from one job add up to less than $20 in a month, you donât report that month to that employer. You still include those tips on your tax return. For what happens to tips you pass on or receive, see How do I keep a record of my tip-outs?
How long to keep it
Keep the log with your tax records for as long as it matters for your federal taxes. Publication 17 has the IRS rules on how long that is.
Common mistakes
- Writing down only the total you kept, with nothing about what you paid out or who got it.
- Leaving out tip-outs and pool shares you received from other employees.
- Counting an automatic service charge as a tip.
- Using your employerâs electronic tip system without keeping a paper copy.
- Skipping noncash tips because they donât go on the employer report.
Official sources
Last verified:
Checked IRS Publication 531 (what a daily tip record contains, the two ways to keep one, the paper copy of an electronic record, service charges, the monthly report and its due date, the under-$20 rule) and the IRS tip recordkeeping page.