Ontario Tip Pooling Laws (2026)
In Ontario, employers may not keep, deduct from or take back employees’ tips, but they can require a tip pool and decide who shares. Owners, directors and shareholders can share in the pool only if they regularly do substantially the same work as the staff in it; managers who are employees can share if the employer’s policy allows. There is no lower wage for tipped staff: everyone gets the $17.95 minimum.
Last reviewed October 11, 2026.
At a glance
| Minimum wage | $17.95 an hour from October 1, 2026 (next change October 1, 2027) |
|---|---|
| Liquor server rate | None since January 1, 2022 |
| Tips count toward minimum wage | No |
| Required tip pools | Allowed; the employer sets the terms |
| Owners, directors, shareholders | Only if they regularly do substantially the same work |
| Managers | May share if the employer’s policy allows |
| Card fees taken from tips | Credit card fee share only (card rate or 1.5%, whichever is greater) |
| Breakage and walkouts | Cannot come out of tips |
Minimum wage
Ontario’s general minimum wage is $17.95 an hour from October 1, 2026, to September 30, 2027, and the student rate is $16.90. Rates change every October 1 with Ontario’s consumer price index, and the October 2027 rates must be published by April 1, 2027 (Employment Standards Act, s. 23.1). Ontario abolished its lower liquor server rate on January 1, 2022, so servers and bartenders get the same minimum as everyone else, plus tips. Tips do not count toward minimum wage, vacation pay, public holiday pay or overtime.
Who owns tips
An employer may not withhold an employee’s tips, deduct from them, or make the employee return or hand them over, except as the Act allows (s. 14.2). Tips taken in breach are a debt owed to the employee, enforceable like unpaid wages, and employees cannot sign this right away; the ministry’s example is agreeing to tip out to the house in exchange for a higher wage. The only deductions allowed are those required by law or a court order, such as income tax, and redistribution through a tip pool. An employer may keep tips that customers give to the employer personally.
Tip pools
The employer may collect tips and redistribute them among some or all of its employees (s. 14.4). According to the ministry, the employer decides who takes part, how shares are set and how often they are paid; the terms can be oral or written; employees do not have to agree; and taking part can be a condition of employment. Contributions can come only from tips: a tip-out set as a percentage of sales cannot be more than the tips the employee actually received.
Owners, directors, shareholders and managers
Owners (sole proprietors and partners), directors and shareholders may not share in a pool unless they regularly perform, to a substantial degree, the same work as employees in the pool or as tipped employees of other employers in the same industry (s. 14.4). The ministry’s policy manual gives examples: waiting tables for 5 of 8 hours every day qualifies; bartending for 1 hour of a 10-hour day, or only during unexpected rushes, may not. If the employer or a director or shareholder shares in the pool, the policy must be posted in the workplace and kept for three years.
The restriction does not apply to managers who are employees: the ministry says they may keep tips they receive and may join a pool if the employer’s policy allows.
Credit card fees, breakage and losses
The employer may keep the part of a credit card tip that covers the card fee: the tip multiplied by the card company’s rate or 1.5%, whichever is greater (O. Reg. 125/16). Debit card fees and other processing fees cannot be deducted, and neither can breakage, spills, losses or walkouts.
Service charges
A service charge counts as a tip when a reasonable person would assume it goes to employees (s. 1(1)), so the same rules apply to it. The ministry gives banquet hall gratuities and service charges as examples, depending on the circumstances.
How tips must be paid
Since June 21, 2024, tips must be paid in cash, by cheque payable only to the employee, or by direct deposit into an account the employee chooses, in their name; the ministry says Interac e-Transfer counts as direct deposit (s. 14.1). There is no fixed payout schedule, but an unreasonable delay can count as withholding.
Ontario tip FAQ
Can an Ontario employer keep tips?
No. An employer may not withhold, deduct from or take back employees’ tips, apart from deductions required by law and redistribution through a tip pool. It may keep tips customers give to the employer personally.
Can managers share in a tip pool in Ontario?
Yes, if the employer’s policy allows. The same-work restriction applies to owners, directors and shareholders, not to managers who are employees.
Can an Ontario employer take credit card fees out of tips?
Only the credit card fee share: the tip times the card rate or 1.5%, whichever is greater. Debit and other processing fees cannot be deducted.
Is there a liquor server minimum wage in Ontario?
No. It was abolished on January 1, 2022; servers get the general minimum, $17.95 from October 1, 2026, plus tips.
Can my employer make me tip out a percentage of sales in Ontario?
A tip-out can be required as part of a tip pool, but contributions can only come from tips: a percentage of sales cannot take more than the tips you actually received.
Official sources
- Employment Standards Act, 2000 (e-Laws)
- O. Reg. 125/16: Tips and other gratuities
- Ontario: Your guide to the ESA, Minimum wage
- Ontario: Your guide to the ESA, Tips and other gratuities
- ESA Policy and Interpretation Manual, Part V.1
- ESA Policy and Interpretation Manual, Part IX
This page summarizes the law for restaurant operators and staff; it is not legal advice. Wages and rules change, and cities can set their own minimums. Check the linked official sources, or ask an employment lawyer, before changing how you handle tips.