Under the Swiss L-GAV (national collective bargaining agreement for the hospitality industry), tips are not part of the gross salary. But: whether they are subject to OASI does not primarily depend on who holds the money first — it depends on how material they are relative to the base salary. A distinction with major consequences for payroll and OASI contributions.
The basic rule: materiality counts
A tip is a gift from the guest to the employee. It is not part of the minimum wage under the L-GAV — the minimum wage must be fully guaranteed by the employer, regardless of tips.
The question of OASI liability, however, is not answered via the payment method but via materiality. Legal basis:
Art. 7 lit. e AHVV: "The determining salary includes in particular: tips, insofar as they represent a material part of the salary."
FSIO guidelines on the determining salary (WML), margin nos. 2042–2044: set out the materiality threshold. Administrative practice and specialist literature (including Prof. Thomas Geiser, HR Today 2024) assume a threshold of around 10% of the annual salary.
Since the "service-included" rule of 1974, FSIO practice has rebuttably assumed that tips in the hospitality industry are not "material". This presumption is not a blank cheque: where tips are regularly high, it is overturned — and the tip becomes salary subject to OASI, regardless of whether it was paid in cash or by card (BGE 137 V 321 E. 2.1).
As part of the OASI Reform 2030, the Federal Council has refrained from introducing social-security contributions on tips paid electronically. Social Affairs Minister Elisabeth Baume-Schneider withdrew the measure on her own initiative after political resistance from both the hospitality industry and the trade unions became too strong. The Council of States had previously adopted the motion "Voluntary tips are not part of the salary" by 42 votes to 1.
As a result, extending OASI liability to digital tips is likely to be off the table for some time. The current legal situation (Art. 7 lit. e AHVV, materiality threshold) remains unchanged — administrative practice and accounting firms continue to treat pool-distributed card tips as subject to OASI.
Card tips via the till
When a guest pays by card and adds a tip, it first lands in the restaurant's account. It is then passed on to the employees via the payroll run (either to one individual or to a pool).
Consequence for payroll:
- Subject to OASI under established practice — as soon as a card tip is distributed via the employer to the employees, administrative practice and the standard accounting-firm position treat it as subject to OASI/DI/EO/UI (Art. 7 lit. e AHVV). Strictly speaking, the materiality threshold also applies here — but in practice it rarely comes into play, because the tip is documented and paid out.
- To be declared in the wage statement in line 3 (other benefits).
- Subject to income tax and withholding tax.
- VAT implication: card tips must be booked as a pass-through item (see VAT section below).
Cash tips straight from the guest
When the guest pays in cash and the tip goes directly to the employee (not into the till), as a rule:
- Not subject to OASI on the employer side, because the money never passes through the business.
- Tax responsibility stays with the employee — they must declare it themselves in their personal tax return.
- Not included in the wage statement — the employer has no record of it.
Where there are regular, significant cash tips (rule of thumb: > approx. 10% of the annual salary), the materiality rule kicks in — the tip then becomes subject to OASI even without passing through the employer (Art. 7 lit. e AHVV). The employer is liable for the contribution accounting, even though they never held the money. Anyone running a service-heavy venue with a high tip share should actively review this — the FSIO presumption is rebuttable.
If cash tips first flow into a central tip box and are later distributed by the employer, they pass "through the employer" anyway and are, like card tips, subject to OASI.
Pooling models
Many restaurants pool tips and distribute them according to a defined key (e.g. by employment level or function). In that case:
All tips (card and cash) are collected in the pool. Responsibility lies with the employer.
Periodically (weekly or monthly), the pool is distributed according to a clearly defined key — e.g. by employment level, by function (service / kitchen), by points.
The tip shares enter the salary as a separate wage type and are fully subject to OASI.
The pool key must be defined in writing and accessible to all employees. Otherwise, conflicts will happen regularly.
Don't forget the VAT angle
Card tips are not only an OASI matter, but also a VAT matter — and that is often overlooked.
Card tips that are collected by the restaurant and passed on in full to the employees are a pass-through item — not VAT-taxable turnover. However, if the tip is not booked cleanly as a pass-through in the accounting system (e.g. posted to the regular sales account instead of a separate "pass-through items" account), it can be treated as taxable turnover — with corresponding VAT liability.
Legal basis: Art. 3 lit. f MWSTG (definition of consideration) and FTA VAT Industry Info 08 "Hospitality", section 8.3 (treatment of tips). Clean bookkeeping: record tips separately as a pass-through, not through the sales account. Otherwise there is an audit risk at the next VAT inspection.
Four common mistakes in tip payroll
1. Treating card tips as "irrelevant". Classic mistake — card tips run through the till and, under established administrative and accounting-firm practice, are treated as subject to OASI as soon as they are distributed to employees via the employer.
2. Pool key not in writing. In a dispute, you cannot prove who is entitled to which share. Write it down, once, clearly.
3. Paying out the pool as cash rather than as salary. When the pool passes through the employer, it must be shown as a wage type — not as a cash payout "on the side".
4. Declaring tips as part of the minimum wage. The L-GAV minimum wage is guaranteed by the employer — tips don't count towards it, no matter how tempting it might be.
A payroll platform for hospitality knows this tip logic natively: card tips are imported via the till and run as an OASI-liable wage type, the pool distribution follows the stored key, and materiality thresholds are tracked in monitoring. That saves the compliance discussion at every payroll run. More about the hospitality solution →