Australian Tax Paper

In: Business and Management

Submitted By Durreadan
Words 508
Pages 3
Question: Rebecca is a waitress in a busy restaurant. It is policy of the restaurant that the business and not the person who receives them own tips. However, tips are later shared in full between the staff. Rebecca's tips handed to her by diners during the year were $1050, but the restaurant manager only gave her $230. As this was cash, she does not believe any of it is required to be disclosed on her tax return.

Is that correct? If not, how much should she declare her income in tax return in regards to the tips she received?
Answer: Usually, Australian employment laws do not treat tips from customers as part of your employee’s salary or wages. However, any tips they obtain and retain, either straight from customers or distributed by employers, must be stated as a taxable income if they need to file an income tax return.
If employees pay their tips to employer’s, they only need to report as income the amount of tips they keep and that employers distribute tips back to their employees .However under income tax law Rebecca needs to report their tips as income from working under the “Allowances, earnings, tips, director's fees, etc.”, on their income tax return.
There may be different types of expenditures of income from working as waitress for Rebeca in a busy restaurant. These may include: * Allowances payments from which tax was not withheld, including salary, wages, commissions, bonuses, income earned from part-time and casual jobs, and income from income protection, sickness and accident insurance policies. * tips, gratuities and payments for your services. * Consultation fees and honoraria (payments for voluntary services).
Rebeca will need her payment summaries or comparable statements to be revealed (and details of the payments that you received if they are not shown on a payment summary or comparable statement).
If Tax authorities have do…...

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