Tips and gratuities are top of mind for many of our members. The recent Federal Court of Appeal ruling which concluded that businesses who operate under a Controlled Tip Model will be required to deduct CPP and EI premiums from the tip amounts. A Controlled Tip model will cost your business more than $30,000 per $1,000,000 in sales.
Under a Controlled Tip model, an employer is required to withhold source deductions, meaning:
Employer must deduct 7.58% (CPP and EI) from the tips
Employer must contribute an equal amount on their own
CRA can audit can go back up to three years and hold the employer responsible for both portions, for a total of 15.16% on tips
There is a solution. Employees and employers can be exempt from having to pay CPP and EI if they operate under a Direct Tip Model.
ORHMA has partnered with Atlas to provide a tax compliant solution for the industry.
Atlas, a Toronto-based restaurant technology company, is building "Atlas Direct Tips" – an automated tip division and distribution tool designed to meet all the requirements of the Direct Tip model. ORHMA has partnered with Atlas to bring this impactful solution to the hospitality industry.
Participate in our focus group and get three months of free service.
In order to make a scalable solution, Atlas and ORHMA are inviting operators to participate in a focus group where they can provide user feedback on the current tool and its future features and functionality. In exchange for your feedback, your operation will receive the tool free for three months.
ORHMA understands your concerns and we are pleased to take the lead on offering the hospitality industry the support that you need.
To help serve you and answer any of your questions, please call us at (905) 361-0268 or (800) 668-8906 or by email at info@orhma.com.
*CPP and EI rates change annually. The 2023 CPP rate of 5.95% and EI of 1.63% = 7.58%.