Social Security Tips | Meaning and Definition

What are Social Security Tips?

Social security tips are generally the discretionary tips that a customer offers an employee and are subjected to the various social-security taxes and reported on the W-2 of the employee’s reports. This is received by the employee working in the organization. The social security tips comprise non-cash tips, cash tips, credit tip charges, debit tip charges, etc. To withhold the taxes from the employees’ paychecks, the employer has to be informed about the tips.

W-2 meaning is the form that contains the report consisting of the salary paid to the employee working in the organization. The organization’s employer generally submits the taxes that are withheld during that particular year and this report.

Conditions that must be satisfied by the qualified tips: –

  •     They are not compulsorily or forcefully taken from the customers.
  •       The customer must know about receiving the payment and who receives it.
  •     The payment form is dependable on the choice of the customer.
  •     The customer has the full right to know about the amount.