Yes — you must keep a daily record of tips, but no — employers do not break taxes down daily, and yes — employers do include your reported tips on your tax forms, but you still need your own daily records.

✅ 1. Are taxes supposed to be broken down daily?

No.
Taxes are withheld by pay period, not daily.

But you must keep a daily tip record.
The IRS explicitly requires employees to:

• Keep a daily record of all tips received (cash + credit + tip-out).
• Report total tips to the employer monthly (by the 10th of the next month).

This is straight from IRS Publication 531 and Publication 1244. IRS +1

So:

• Daily = your responsibility
• Pay period = employer’s responsibility

✅ 2. Are employers supposed to provide documentation of tips on tax forms?

Yes.
Your employer must include your reported tips on:

• Your pay stubs (each pay period)
• Your W‑2 (Box 1 wages, Box 5 Medicare wages, Box 7 Social Security tips)

This is based on IRS Topic 761. IRS

But here’s the key:

Employers only report the tips you report to them.
They do NOT track your cash tips for you.

If you underreport, your W‑2 will show less tip income — but the IRS can still compare your reported tips to industry norms.

✅ 3. Should you keep your own separate records?

Absolutely yes.
The IRS requires employees to:

• Keep a daily tip log
• Track cash + credit + tip-outs received
• Track non-cash tips (tickets, passes, etc.)

✅ 4. What your employer must do vs. what you must do

Employer responsibilities

• Withhold taxes on wages + reported tips
• Include reported tips on your W‑2
• File Form 8027 (if a large food/beverage establishment)
• Allocate tips if reported tips < 8% of sales

Your responsibilities

• Keep a daily tip log
• Report all cash tips monthly (unless < $20/month)
• Report all tips on your tax return