Tips paid by credit card in cafes and restaurants will be tax-exempt. Emmanuel Macron made the announcement Monday, September 27 in Lyon, to professionals gathered at the International Catering, Hotel and Food Fair (Sirha), which opened in Lyon. “We have decided that tips paid by credit card would be free of charge for employers and tax-free for employees”, with an implementation ” in the coming months “, he said.
Today, unlike tips paid in cash, card transactions are automatically reported and taxed. But thanks to this announcement, an employee in the restaurant or hotel industry who receives a tip by credit card will no longer need to report it to taxes. These transactions will therefore escape income tax and contributions.
“This will add to purchasing power” employees in the sector, argued the president. Accused by the opposition of taking out the checkbook seven months before the presidential election, Emmanuel Macron’s entourage defends themselves from any electoralism by saying that the measure has no additional cost for the state: the tips paid in cash are currently very little declared, and therefore taxed. This measure “Does not cost anything, because today it does not work”, he added, “Because we saw it at the end of the crisis, our compatriots use less and less liquid”.
A measure welcomed by the profession
This measure was applauded by the profession Monday morning. “This is excellent news, because tips are part of the attractiveness of our businesses. But now that everyone pays by credit card or via applications, very often we no longer have money to add 3 to 5 euros for the service. When we have the possibility to leave a tip on the bill, it will be much easier “, welcomed in advance Monday morning Didier Chenet, president of GNI, union of independent hotel and catering.
The president of Medef, Geoffroy Roux de Bézieux, also spoke on Monday morning in favor of this measure, so that tips can be added directly to the bill paid by bank card without being taxed.
This measure is intended to be a boost given to employees, but also to bosses who have difficulty in recruiting. “This will allow you to attract more young and old to tell them: you can earn more than the salary and the bonus that I pay you”, concluded the Head of State.
Emmanuel Macron had wanted in June a resumption of hiring, saying that 110,000 jobs are to be filled in the catering industry, a sector which has been hit hard by the Covid-19 health crisis and the various confinements. The commercial catering market saw its turnover almost halved in the first seven months of the year, compared to 2019, according to a study by NPD Group. From January to July, compared to the activity before the Covid-19, the turnover fell by 45%, and the attendance, by 39%, explains the specialist in market studies, in a point on the activity of a sector which in 2019 represented 57 billion euros in France.
Commercial catering “Out of home” includes catering with table service (cafes, bars, brasseries, cafeterias), fast food (fast food restaurants, take-out or delivered sales, sandwich shops, bakeries, caterers), catering in transport and leisure places (museums ), in companies and by vending machines.
It is table catering that has suffered the most: with “Five months of closure due to Covid-19, it has lost two-thirds of its turnover, ie – 68% “ at the end of July, against ” – 17% for fast food “, says Maria Bertoch, industry expert for NPD Group, who is counting on a “Return to normal within two years”. In 2022 “The global market will resume its growth”, with an increase in turnover of 21% compared to 2021, anticipates the market research specialist, while the level of 2019 should be found in 2023.
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