Section 31.3401(f)-1 - Tips(a)Tips considered wages. Tips received after 1965 by an employee in the course of his employment are considered to be wages, and thus subject to withholding of income tax at source. For an exception to the rule that tips constitute wages, see §§ 31.3401(a)(16) and 31.3401(a)(16) -1, relating to tips paid in a medium other than cash and cash tips of less than $20. For definition of the term "employee," see §§ 31.3401(c) and 31.3401(c)-1 .(b)When tips deemed paid. Tips reported by an employee to his employer in a written statement furnished to the employer pursuant to section 6053(a) (see § 31.6053-1 ) shall be deemed to be paid to the employee at the time the written statement is furnished to the employer. Tips received by an employee which are not reported to his employer in a written statement furnished pursuant to section 6053(a) shall be deemed to be paid to the employee at the time the tips are actually received by the employee.T.D. 7001, 34 FR 1001, Jan. 23, 1969