A new survey on tipping in Canada suggests many consumers are done with the idea of tipping for services that weren’t previously expected.
The study, conducted by H&R Block Canada, found that 94 per cent of Canadians are annoyed when they’re presented with a tip request on card payment machines for purchases that didn’t traditionally garner them.
However, 57 per cent feel guilty when they skip past the tipping option, the survey said.
“The vast majority appear to have extreme tip fatigue – both with expectations around gratuity amounts and with the extent of services that now prompt for a gratuity,” officials said in a news release.
“This is despite nearly one-in-three Canadians (31 per cent) that have directly worked in a gratuity-based job at some point.”
The study also found that more than half of Canadians are “frugal tippers,” providing gratuities for exceptional service and/or always option for the lowest option provided on a prompt.
Tips are taxable
H&R Block says if you receive tips, it’s important to understand that all that extra income isn’t tax-free. Some Canadians aren’t aware of this, the poll found.
“Overall, 84 per cent of Canadians recognize that tips must be declared for tax purposes (whether they are cash, credit or via other payment methods). However, 47 per cent assume that the recipients aren’t declaring their tips when filing their taxes.
“Conversely, 16 per cent didn’t realize that tips must be declared as taxable income.”
“It’s important to emphasize that tips are considered taxable income, by law, even if your employer does not include any tip amount on your T4 slip. But the good news is there are many ways to make your tips work in your favour when it comes to filing your taxes,” said Yannick Lemay, tax expert at H&R Block Canada.
“Not only are there numerous deductions, benefits and credits you can leverage, there are tax-friendly ways to use your tips to invest in your professional growth and well-being and bolster your savings.”
Canadians are also stuck on a few other ideas when it comes to tipping, the company says, such as whether workers get to keep their tips and their impact on an employee’s hourly wage.
“While around half of Canadians believe the individual person they’re tipping receives the money, the other half believe it goes into the employer’s pocket,” H&R Block said.
“Overall, 88 per cent feel that tipping culture has become a means for employers to pay their staff less.
“Furthermore, 91 per cent believe that Canada should have less of a tipping and gratuity culture as employers should cover their employees’ full wages.”
