Yes. Tips are taxable income in Canada, whether they come as cash, on a card or through a tip pool.
How do you report tips?
- Employees: tips your employer pays you or reports show up on your T4. Tips you keep that are not on the slip still count, so add them to your employment income.
- Self-employed: tips are part of your business income, with your other sales.
Do tips affect CPP and EI?
Tips your employer controls, such as tips pooled and paid out through payroll, are usually pensionable and insurable. Direct cash tips normally are not, but they are still taxed. If you are unsure which applies to you, ask your employer or the CRA.
What should you keep?
Write down your tips each shift, and keep any tip-out records. If the CRA asks, a simple log works.
For other payments, see the table on Is it taxable? and the income tax calculator.
Where does this information come from?
The rule comes from the Canada Revenue Agency guidance on employment income. Check the CRA page for your case. Checked in October 2026. This is an independent information site: we provide no services, we do not represent the CRA or any organization, and we do not guarantee that anything here is accurate or current. We accept no liability for decisions based on it. Check the official source before you rely on it. See the full disclaimer.