In Ukraine, tips that employees receive from customers in cash, via QR codes or payment terminals are subject to taxation. At the same time, the procedure for paying taxes depends on who exactly receives the money – directly the employee or the establishment.

The State Tax Service of Ukraine reported this on November 4, explaining the current rules for taxing tips.

If the QR code leads directly to the employee's bank card, the tips received are considered their personal income. From these funds, it is necessary to pay 18% personal income tax (PIT) and 5% military levy.

Since the employer in this case does not withhold taxes, the employee must independently declare the income received and transfer the corresponding amounts to the budget.

For example, if a customer transfers UAH 1000 in tips to an employee, the tax liabilities will be UAH 180 PIT and UAH 50 military levy. After paying taxes, UAH 770 will remain.

A different procedure applies when tips are first received by the establishment. If a customer leaves them through a payment terminal, along with the bill payment, or transfers them to the account of a company or individual entrepreneur, the received funds must be reflected in accounting.

When the establishment pays this money to the employee, it withholds PIT and military levy itself and transfers them to the budget as a tax agent. The employee does not need to separately declare such tips if the taxes have already been paid by the employer.

The STS also emphasized that regular tips for services rendered cannot be considered non-taxable gifts. Even if the customer indicated in the payment purpose “thanks” or “for coffee”, this does not exempt the recipient from tax liabilities.

There is no need to declare tips after each transfer. If an employee receives them directly to their own card, they must file one annual declaration with the total amount of such income.

For tips received during 2026, the STS has defined the following deadlines:

  • by May 1, 2027 – filing a declaration of property status and income;
  • by August 1, 2027 – payment of PIT and military levy.

The declaration can be filed remotely through the Electronic Taxpayer Cabinet.

The tax service recommends that employees during the year keep bank statements or keep their own records of tips received. This will help correctly determine the amount of income and separate it from other receipts on the card, in particular transfers from relatives or debt repayments.

However, keeping a special tips accounting journal is not required by law.

Based on materials from: State Tax Service of Ukraine