“Gratuity”, “tip” or tip, however you call it, is a common practice in our country and is inextricably linked to our Greek culture. It has become established as a practical sign of gratitude towards a professional who served us with consistency and respect. Certain employee positions may even secure a second salary from these customer tips.
However, the economic crisis forced a sharp reduction in the generous gratuity we used to leave, and it now has a more realistic form.
Even if gratuities are paid voluntarily by the business’s customers, they may form part of the employee’s regular remuneration if they are paid on the basis of an express or implied agreement between employer and employee.
However, from the business’s side, “How are Gratuities treated in accounting with POS?”
The distribution of the collected gratuity is carried out in accordance with the prevailing in-house practices. Because these amounts are not fixed, if the total gratuities are ultimately distributed to the business’s staff, the institution of imputed daily wages applies and the relevant entry is as follows.
Cash payment
DEBIT 38 Cash/Monetary Assets (with the amount of the Invoice/Receipt and the amount of the gratuity)
CREDIT 53.00 (GCS) / 53.03 (ELP) Staff wages payable (with the amount of the gratuity )
71.01 Sales (with the net sales amount)
54.00 Sales VAT (with the amount of VAT 13%)
When payment to staff is made, the following debit-credit entry is recorded.
DEBIT 53.98 Miscellaneous creditors (with the amount of the gratuity)
DEBIT 38 Cash/Monetary Assets ( with the amount of the gratuity).
Card payment
In card payment the corresponding entry is made, placing the Credit Card account in the cash position.
If, according to business practice, the employer withholds part of the gratuities, then the entry must also include the credit of the REVENUE generated.
It is important that in the above entries there should also be the calculation of any social security deductions or VAT, as applicable and where required by the relevant legislation.