Can My Employer Take Away My Tips in Ontario?

If you work in a job where customers leave tips — like a restaurant server, hair stylist, delivery driver, or nail technician — you might be wondering: Do I get to keep my tips?

In most cases, yes. Ontario’s Employment Standards Act (ESA) says that tips and gratuities belong to the worker who receives them. But there are a few exceptions and important rules to know. This article will help you understand your rights and what to do if your employer isn’t playing fair.

✅ The General Rule: You Keep Your Tips

According to the ESA, your employer cannot take your tips or share them with people who don’t normally receive them. Tips are not wages, and you’re still entitled to minimum wage even if you earn a lot in tips.

⚖️ When Tip Pooling Is Allowed

Some employers set up a tip pool, where all or some of the tips are combined and shared among employees. This is legal as long as the employer follows the rules.

• Your employer can require tips to be pooled and shared among staff.

• They can decide how the tips are divided, as long as it's reasonable.

• Owners or managers generally cannot take part in the tip pool — unless they:

  • Own part or all of the business and

  • Regularly do the same work as other staff who typically earn tips (e.g., serving food, cutting hair)

Example:

A restaurant owner who spends most of their time helping on the floor and serving food can legally take a portion of the tip pool. But a manager who only supervises staff cannot take tips unless they meet the criteria above.

📃 Employment Contracts and Tip Policies

If you have a written employment contract, check whether it explains the rules about tips and tip sharing. Many workplaces also have written policies about how tips are collected and distributed.

Even if you agreed to share tips or join a tip pool, your employer must still comply with ESA rules.

What If You’re Federally Regulated?

Some jobs in Canada are covered by federal law instead of Ontario’s ESA. This includes:

• Banks

• Airlines

• Interprovincial trucking

• Broadcasting companies

These jobs fall under the Canada Labour Code, which does not have specific rules about tips. That means your employer may have more flexibility in deciding how tips are handled — unless your employment contract or company policy says otherwise.

💸 Minimum Wage and Tips Are Separate

Remember, tips are not considered wages under either Ontario or federal law. That means your employer must pay you at least the minimum wage, even if you receive tips.

• Ontario has different minimum wage rates, including a general minimum wage and special rates for students, homeworkers, and liquor servers.

🧾 Keep Records and Report Your Tips

Tips are considered income, and you’re legally required to report them when you file your income tax return.

• If tips are shared through a pool and paid to you by your employer, they must be included on your T4 slip.

• If you keep your own tips directly from customers, you are responsible for reporting them yourself.

It’s smart to keep a daily record of all the tips you receive, in case there’s ever a dispute or for accurate tax reporting.

🚫 What If Your Employer Keeps Your Tips?

If your employer illegally withholds your tips or violates ESA rules, you can file a claim with the Ontario Ministry of Labour.

• You have up to 2 years from the date the money was owed to you to make a claim.

• The Ministry can investigate, order repayment, and penalize employers who break the law.

📞 Get Help

If you’re not sure whether your employer is following the law, or if you need help making a claim:

• Speak with a licensed paralegal or employment law professional

• Situ Legal Services can help you:

  • Understand your rights

  • Review your employment contract or tip policies

  • File a claim for unpaid tips or other violations

✅ Conclusion

In Ontario, you have the right to keep the tips you earn. Employers can set up fair tip pools, but they can’t take your tips unless the law allows it — and they must always follow minimum wage laws. Whether you're working in hospitality, beauty, or retail, understanding your rights ensures you get the pay you deserve.

👉 Contact Situ Legal Services today for trusted legal guidance on workplace rights, wage disputes, and ESA claims.