Are tips considered black money?

Are tips considered black money?

If you have ever worked in catering, either as a waiter or as the owner of a bar or restaurant, it is possible that a customer, due to the good treatment you have given them, left you a tip. But have you considered whether tips are considered black money?

The quick, easy and direct answer is yes. But the truth is that there is much more behind this topic. And that's exactly what we want to talk to you about next. Go for it?

What are tips

stack of coins

Tips according to the RAE (Royal Spanish Academy) are:

«A gift that exceeds the agreed price and as a sign of satisfaction is given for some service. "Small gratuity with which eventual service is rewarded."

In other words, Tips are a financial gratitude that some people may have with others for the service provided over a period of time.

These tips are optional in Spain, although in other countries they are regulated and a minimum is established depending on the type of consumption or the establishment in which the services are performed.

As for the amount, it can be from a few cents to several euros or more, it will depend on the person who wants to reward the worker for their attention. The problem is that that amount of money is not reflected anywhere.

Let's take an example. Imagine that you are a waiter and you have served diners at a wedding. They are very happy with your attention and in the end they reward you with a tip of 50 euros. However, in the receipt for that wedding, the tip is not reflected, but that money goes separately.

How tips are considered: black or white money


At the beginning, we told you that, if we had to tell you directly and without going into details, whether tips are black or white money, we would say black. But something else must be taken into account.

And is that The person who gives you the money has regulated it, because it can be from your salary, from help, from a loan... In other words: it is white, clean money.

Now, when that person gives that tip to another, the money, since it does not have a record (the worker does not give you an acknowledgment of receipt, or an invoice... none of that), then it is as if it becomes black money. Because in the end this will not be registered nor will it be taxed to the Treasury, which implies that taxes will not be applied nor can the State come in to demand tips.

Then, Is it black money? Yes, but it comes from white money.

Now, for many workers, those tips are the difference between not making ends meet despite a salary, and doing so, even if it's barely. It must be remembered that the salaries of waiters and other workers in the service sector are not very high and tips help. That is why they try to offer the best possible service to achieve a greater amount of tips.

Each of them belongs to the worker who has performed the service, although in many cases all the workers pool those tips and also divide them with the cooks and assistants since, without them, the work would not go ahead. They thus form a group in which they can distribute tips equally, as long as everyone works equally, of course.

What does the Treasury say about tips being black money?

As you may have read, for the Treasury, tips should be taxed. They are considered income from work and are based on the fact that it is a deduction from the personal income tax law and the regulations. It is the businessman who would have to collect all the tips and retain the percentage of these to pay taxes on them.

Now, the reality is that this does not happen. And the Tax Agency is not going to campaign for businessmen to include tips in their income tax.

It must be taken into account that we are talking about an amount that is usually small and that is very difficult to control, both by the businessman and by the Treasury, because these do not leave a trace, unless they are paid through a credit or debit card (in whose case can be traced back to the person who did it).

Are tips really small amounts?

box with coins

We do not have exact data, but According to several newspapers, in Spain it is estimated that there are around five billion in tips that are not being controlled. And many times we think that these tips are the ones we leave for waiters, masseuses or those who provide services. But, in reality, there is much more.

Let's give a clear example. Have you ever been to a private doctor? We are talking about without insurance, about those who have to pay for that consultation. If you have done it in cash and the doctor or nurse has not given you an invoice, how do you know that that money will be invoiced to the Treasury? Another thing would be if you paid by card, where then you may have more problems. But, do you understand that this can also be a “tip” for that service that really turns your white or clean money into black money?

It is true that In many sectors, tips are only a few cents, which, accumulated by the number of clients and days per month, makes it a larger amount. (but almost never equal to or greater than a salary), but there are other cases in which these “tips” can be quite high (for example 150 euros for a consultation).

What will happen to tips then?

Taking into account that tips also evolve (a few years ago “mandatory” tips arrived in the American style) it may be the case that, at some point, it is the businessmen themselves who decide to take care of the tips and then distribute them with the employees. employees, in such a way that they are deductible as expenses but, at the same time, they would be regularized through the Treasury.

However, It would be necessary to know if it is really worth the effort to get this to see the light.

Now it's your turn. What do you think, are tips considered black money? And in that case, do you think they should be regulated in some way? We read you in comments.

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