Tips at the card terminal: who they belong to, what they cost, who pays tax on them

The short answer

A card tip is authorised together with the bill amount in a single transaction and therefore lands first in the business's account, not in the hand of the service staff. For the staff it remains tax-free under section 3 no. 51 EStG, and for the business it is not turnover — but the percentage card fee is still charged on the total amount.

Two routes into the terminal, and one of them stops at girocard

There are technically two procedures, and the distinction decides how things run at the table.

Procedure	Tip is entered	Booking	Available with
Tip before authorisation	before the PIN or contactless authorisation	bill plus tip as one transaction	girocard and credit card
Subsequent adjustment (tip adjust)	after the payment, via the transaction number on the receipt	the original payment is increased by the tip amount	credit card only, device-specific

The subsequent adjustment is the restaurant workflow: the guest writes the tip and total amount on the receipt and signs, and staff later post the adjustment via the merchant function. REA Card expressly describes this route for its devices, with entry of the transaction number from the receipt (REA Card, Funktionsanleitung Trinkgeld T7, retrieved 10 September 2026). It does not apply to girocard: there the tip has to be requested before authorisation, otherwise the payment is complete.

So anyone whose business mostly sees girocard — and in German hospitality that is the normal case — needs a workflow in which the service staff asks the guest before the card is held to the reader. Anything else leads to tips in cash, or to no tip at all.

What the function costs in fees

A tip increases the transaction amount. The percentage merchant fee runs with it, the fixed per-transaction fee does not, because it is only incurred once per payment. A model calculation for a restaurant with 40 card payments a day, 300 opening days, a 60-euro average bill and an 8 per cent tip, that is 4.80 euros per bill and around 57,600 euros of tips a year:

Card type	Percentage (order of magnitude)	Fee on a 4.80-euro tip	Fee on 57,600 euros a year
girocard	0.3 %	1.4 cents	around 173 euros
Debit card (Visa/Mastercard)	0.9 %	4.3 cents	around 518 euros
Credit card	1.5 %	7.2 cents	around 864 euros

The percentages are orders of magnitude from published provider terms and from the interchange caps in Regulation (EU) 2015/751, not the terms of any particular contract; the volumes are freely chosen assumptions. The point behind them holds nonetheless: in a card-heavy business with a mixed card profile, the landlord pays a three-figure sum a year in fees on money that is not theirs. That is not an argument against the function — it is an argument for negotiating the percentage before activating tipping.

A second cost question that belongs on the table before signing: whether a subsequent adjustment is charged as a transaction of its own. That is in the price and services schedule, not in the brochure.

Tax: tax-free for the staff, not for the owner

The statutory text is short and clear-cut. Under section 3 no. 51 EStG, tips are tax-free if they are given to the employee “on the occasion of work performed, by third parties, voluntarily and without any legal entitlement to them, in addition to the amount payable for that work”. Three features have to come together: from a third party, voluntary, in addition.

From that follows the practice:

• Service staff: tax-free, with no upper limit. Because the income stays tax-free and flows in addition to wages, it is also exempt from social security contributions under section 1 (1) sentence 1 no. 1 SvEV.
• Business: not consideration. Section 10.1 (5) sentence 3 UStAE makes clear that voluntary tips paid to service staff do not count as consideration for the business owner's services. No VAT is due on them.
• Owner without staff: if the business owner keeps the tip themselves, sentence 1 of the same provision applies — amounts paid voluntarily to the business owner form part of the consideration where there is an inner link to the service. It is then business income with VAT.
• Service charge: a separately stated fixed service charge is not voluntary and is therefore neither tax-free nor outside the consideration.

The fact that the employer collects and distributes the money does not destroy the tax exemption — for pool models the BFH (Federal Fiscal Court) confirmed this for casino staff (judgment of 18 June 2015, VI R 37/14). The limit lies elsewhere: the Cologne tax court did not recognise payments of 50,000 euros and 1.3 million euros to authorised signatories as tips (judgments of 14 December 2022, 9 K 2507/20 and 9 K 2814/20). That is the legal position, not advice on an individual case; the distribution rule in your own business should be agreed with your tax adviser.

Till and accounting: the pass-through item

A card tip is money that runs through the business account and leaves the business again. Under section 146 (1) AO, cash receipts and cash payments have to be recorded daily, and the payout to staff is such a payment. In practice that means:

1. The receipt shows the tip amount separately, without VAT.
2. The end-of-day close shows the total of booked tips separately — REA Card prints this as a line of its own.
3. The pass-on to staff is documented, with date, amount and recipient or distribution key.

Without step three, a pass-through item quickly becomes untaxed business income in a tax audit.

What guests expect

The girocard study on outdoor hospitality provides solid figures on this: 64 per cent are already familiar with tipping functions at the terminal, 70 per cent prefer entering an individual amount over fixed percentage presets, and 30 per cent can imagine using it in future (girocard.eu, 11.05.2026). Fixed percentage buttons work through the anchoring effect, but they also create pressure. Offering both routes and leaving a visible option for no tip loses less in the end.

Action list

1. Check the card profile: if girocard predominates, the subsequent adjustment is not an option — the workflow has to come before authorisation.
2. Have the function enabled. It depends on the card acceptance contract, not on the device alone.
3. Look up the percentage and any cost of a subsequent adjustment in writing, in the price and services schedule.
4. Configure the terminal so that free entry of an amount is possible and declining works without an explanation.
5. Agree on one sentence for staff, said before the card is held to the reader, not after.
6. Check the end-of-day close: is the tip total shown separately? Without that line, reconciliation becomes manual work.
7. Record the distribution and payout rule in writing and agree it with your tax adviser — it is the evidence in an audit.

Product questions about enabling the function, terminal models and terms do not belong on this page: those are at SENZA.