>>>I'm not sure about Canada but here waiters and waitresses have a percentage of their bills, I believe 7.5%, withheld as taxes. So if you tip them less than 7.5% they are paying to wait on you.
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>>I checked with Lynn and she is unaware of any such system in Canada. She also says that with the types of tax evasions they see, worrying about a waiter who makes peanuts not reporting all his tips is waaaaaaayyyyy down the list of priorities.
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>Looks like the percentage here is actually 8% --
>
>http://www.nysscpa.org/cpajournal/old/10428232.htm

I've learned that in the Province of Quebec, the employer is required to withhold federal tax on 'tippable sales' (whatever those are, but they include restaurants, hotel valet service, busboys etc) . The amount is based on allocated tips (by the employer) and on tips as reported by the employee on a form submitted to the employer. The act seems overly complicated to me and is not that easy to figure out, but it seems that if the amount of allocated tips is less than 8% of 'tippable sales', then no tax needs to be withheld.