National Insurance Contributions: Gratuities
The question
To ask the Chancellor of the Exchequer, whether her Department has made an assessment of the merits of exempting tips paid by card from National Insurance contributions.
Answered by James Murray
The method of payment of a tip does not determine whether National Insurance is due. National Insurance is not due on tips paid directly to the worker, or where the employer has no influence in the allocation of the tips. If an employer is involved in deciding how tips are shared out, then the payment may be liable for National Insurance. If it is not a voluntary payment, then National Insurance is due.
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