Which Tipped Occupation Code Goes on Each Restaurant Employee's 2026 W-2?
For tax year 2026, box 12 code TP carries the total cash tips each employee reported to you, and box 14b carries up to two Treasury Tipped Occupation Codes. The ten food-service codes, a fictional roster coded role by role, and the payroll checks to finish before January.
Ryan Speier
Quick answer: the code follows the occupation the tips were earned in, not the job title on the schedule. For tax year 2026, the IRS General Instructions for Forms W-2 and W-3 add two things to a tipped employee's W-2. Box 12 code TP reports the total amount of cash tips reported to the employer for the year. Box 14b reports up to two three-digit Treasury Tipped Occupation Codes based on the occupation(s) those tips were received in, and if any tips were received in an occupation that is not on the IRS list, 000 must be one of the two codes. The food-service codes are 101 through 110. 2026 W-2s are due to employees and to the Social Security Administration by February 1, 2027. Your job is accurate reporting; the deduction itself is figured by the worker on their own return.
This is a federal payroll-reporting explainer for the first year these boxes exist, written from the IRS instructions, the IRS occupation list, the final regulations and a Department of Labor fact sheet as they read on September 22, 2026. It is not tax or legal advice, it does not cover state rules, and the roster below is invented. The deadline is months away, but the tips have been accumulating since January, so the setup is a now task.
One correction before anything else
Some vendor summaries say code TP reports the employee's qualified tips. The IRS instruction is simpler: code TP is the total cash tips reported to you, meaning cash, card and check tips including tip-pool shares. Which part of that total qualifies is decided under the regulations, not by you editing the box 12 amount. Report the total, code the occupation(s), and use 000 when it applies.
The ten food-service codes
These are the ten Beverage and Food Service rows of the IRS list, which include some non-restaurant servers, with the IRS descriptions shortened and its own illustrative examples. The IRS says the examples are illustrative, so read the description, not just the title.
| Code | IRS occupation | IRS illustrative examples |
|---|---|---|
| 101 | Bartenders: mix and serve drinks or other refreshments, directly or through waitstaff | Barkeep, mixologist, taproom attendant, sommelier |
| 102 | Wait staff: take orders and serve food and beverages at tables | Cocktail waitress, dining car server, banquet staff |
| 103 | Food or beverage servers, non-restaurant | Room service food server, boat hop, beer cart server |
| 104 | Dining room and cafeteria attendants and bartender helpers | Bar back, bar helper, busser |
| 105 | Chefs and cooks | Executive chef, sous chef, restaurant cook, fast food cook, food truck cook, banquet cook, caterer |
| 106 | Food preparation workers: prep duties other than cooking | Salad maker, sandwich maker, kitchen steward |
| 107 | Fast food and counter workers | Barista, ice cream server, cafeteria server |
| 108 | Dishwashers | Dish room worker, silverware cleaner |
| 109 | Host staff, restaurant, lounge and coffee shop | Maître d'hôtel, dining room host |
| 110 | Bakers | Bread baker, cake baker, bagel baker, pastry finisher |
There is no manager or supervisor code, and no restaurant delivery-driver code in the 100s; delivery drivers sit in the 800s transportation group as code 804. Tips received in a role that is not on the list are non-qualifying, which is what 000 is for.
A fictional roster, coded
Marisol's Taqueria is an invented 40-seat restaurant that takes a tip credit on servers and runs a traditional tip pool of servers, bartenders and bussers.
| Employee (fictional) | How they earned tips in 2026 | Box 14b |
|---|---|---|
| Dani, server all year | Direct card tips plus pool shares, all as wait staff | 102 |
| Luis, bartender, also serves brunch tables on Sundays | Tips as a bartender and as wait staff, both listed occupations | 101 and 102 |
| Priya, busser, moved to server in July | Pool shares as a busser through June, server tips after | 104 and 102 |
| Tomas, line cook | No tips: the pool is front of house only | Blank: no code TP, so no code |
| Ana, general manager | Waits tables when slammed and keeps only tips guests hand her directly for service she alone provided at those tables | 102 |
| Ana, same year, if a guest had also left her $5 specifically for resolving a complaint | That tip was received doing manager work, which is not a listed occupation | 000 and 102 |
Tomas gets no code even though cooks are on the list, because box 14b is used only when cash tips are reported with code TP. If Marisol's ran a lawful nontraditional pool that included the kitchen, which under federal law requires that everyone in the pool is paid the full applicable minimum wage in direct wages with no tip credit taken, and that state law allows it, his share would be reported as cash tips with code 105. The regulations say pool shares count for a worker in a listed occupation, but being in a pool does not by itself put a worker in a listed occupation.
Managers: two rules that get mixed up
The first is labor law. The Fair Labor Standards Act bars employers, managers and supervisors from keeping any part of employees' tips or taking from a tip pool, whether or not you take a tip credit. The Department of Labor fact sheet says a manager may keep only tips received directly from a customer for service the manager alone provided, such as serving their own tables.
The second is tax, and the final regulations follow the same line: a manager's tip-pool share is not a qualified tip, while a tip a manager receives directly for work in a listed occupation can qualify if every other requirement in the regulations is met. The regulation's own examples are a restaurant manager tipped $5 for smoothing over a complaint (not qualified, because restaurant manager is not a listed occupation) and the same manager tipped directly by a table they waited on, with no tip pool at that restaurant (qualified, because it was received doing wait-staff work). These are eligibility examples, not a blanket rule. That is why Ana is 102 for her serving tips with 000 added for the complaint tip. Code the work, not the title, and record which shifts produced the tips.
Service charges are not tips
The IRS instructions say mandatory service charges added to the bill are not qualified tips, and the regulation's preamble repeats the long-standing IRS position that an 18% charge automatically added for a large party is a service charge because the employer dictated it. The IRS news release gives the restaurant case: an automatic 18% large-party charge shared with servers, bussers and kitchen staff, with no option for the guest to change it, does not produce qualified tips. The Labor Department says the same for wage purposes. Keep auto-gratuity and service-charge payouts in a separate POS and payroll bucket from declared tips, and ask your payroll provider where each bucket lands on the W-2.
Pre-year-end checklist
- Build a role-to-code sheet for every employee who reports tips: each occupation they earned tips in, dates of any role change, and the resulting one or two codes. For three or more occupations, the instructions allow any two codes, but 000 must be one of them if any tips came from a nonqualifying occupation.
- Check tip-pool membership against the FLSA rules: no managers or supervisors, and kitchen staff only when nobody in the pool is paid below the full applicable minimum wage in direct wages and no tip credit is taken. State rules can be stricter.
- Separate declared tips from auto-gratuities and service charges in the POS and in payroll, and confirm which W-2 box each reaches.
- Ask your payroll provider in writing whether its 2026 W-2 output supports code TP and two codes in box 14b, how 000 is entered, and when the codes must be loaded. Their answer, not this article, is what you rely on.
- Reconcile what employees reported to you during the year against what will print in code TP before February 1, 2027.
- Tell staff in December what the two new boxes mean, so January is not a flood of questions at the pass.
What this does not cover
State tax boxes, allocated tips and Form 8027, the $25,000 deduction cap and its income phase-out, the worker's Schedule 1-A math, and W-2c corrections. Those belong with your accountant. To check the pay rates behind these roles, start with how much to pay restaurant employees per hour; Florida operators should also read the September 30 wage change.
Sources
- IRS, General Instructions for Forms W-2 and W-3 (2026): What's New, Code TP, Box 14b, due dates. Read September 22, 2026.
- IRS, Occupations that customarily and regularly received tips on or before Dec. 31, 2024, page last reviewed June 28, 2026. Read September 22, 2026.
- IRS news release IR-2026-49, Treasury, IRS issue final regulations listing occupations, April 10, 2026. Read September 22, 2026.
- Treasury and IRS, TD 10044, Occupations That Customarily and Regularly Received Tips; Definition of Qualified Tips, Federal Register April 13, 2026, effective June 12, 2026: section 1.224-1(c)(10) and Examples 4, 5, 13 and 14. Read September 22, 2026.
- U.S. Department of Labor, Fact Sheet #15: Tipped Employees Under the FLSA. Read September 22, 2026.