Good news for restaurateurs: Simplification of the recording requirement for tips

In March 2025, the Federal Ministry of Finance published an important decision that should please many restaurateurs and hoteliers: the previous, fundamental requirement to record tips for employees has been reversed. This represents a bureaucratic relief for the hospitality industry, which is often the focus of tax audits, particularly with regard to cash management.

This article explains what this change means and how it will affect you in practice.

Tips in gastronomy: what has been the rule so far?

Tips for employees in the catering industry are a common subject of tax audits. Originally, the Federal Ministry of Finance had stipulated that tips for employees handed over in cash had to be recorded as business transactions. Tips given in cash had to be documented in particular as part of cash management in order to ensure a ‘cash check’. This means that the target and actual cash in hand must match at all times.

This regulation led to additional work in the catering industry, as tips are often given in cash and it is not always immediately clear whether they have been correctly recorded.

What has changed now?

In March 2025, there was an amendment to the German Fiscal Code (AEAO). The Federal Ministry of Finance has moved away from a general requirement to record tips to employees.

In practice, this means, above all, a relief in terms of cash management. Restaurateurs no longer have to keep detailed records of all tips paid in cash to employees if these are not mixed with business income.

When must a record still be kept?

Despite the simplification, there are still certain cases in which a record is required.

• This applies in particular to tips given to employees by debit or credit card. Since these are paid into the company’s business account and later paid out to the employees, the recording requirement remains. Here, restaurateurs must ensure that tips are correctly separated from business income and documented.
• However, it remains unclear whether the Federal Ministry of Finance will also refrain from the recording requirement in cases of cash tips paid to employees, where tips and business income are mixed in the cash register. Although this case in particular often provides material for discussion in tax audits, there is no reference to this in the Ministry’s publication. The background to this is the ability to do a cash balance, according to which it must be ensured that the nominal and actual cash balance match.

Our advice is therefore: If possible, store cash tips for employees separately from the company cash register.

What are the advantages of the change?

The time and effort required for cash management is significantly reduced because tips no longer have to be constantly recorded when they are given in cash and there is no mixing with the operating income.

This is a significant bureaucratic relief, especially for smaller businesses or those with many cash-intensive transactions.

Conclusion: a step in the right direction

The removal of the requirement to record tips given to employees is a step in the right direction and a reduction of bureaucracy for the hospitality industry. Restaurant owners can now focus on what is important – the satisfaction of their guests – without constantly worrying about complex record-keeping requirements.

Of course, it is still important to ensure that the cash office is handled correctly, especially when tips are mixed with company funds. But overall, this change should significantly reduce the administrative burden and make everyday life easier in many catering establishments.