Stupid question for food service workers re:Tips

[ProudToBeBlueInRhody]

This has been bugging me for awhile, so I thought I'd ask to see if it's true.

If you take a tip in cash, is it true you aren't taxed on it, but if you are given the tip via credit card, because there is a documentation of it you are? I've gotten into the habit of leaving a cash tip even if paying for the bill on the card because someone said this was the case.

[dysfunctional press]

1. i like to give cash because the server gets it right away...

rather than having to wait until payday.

[Berry Cool]

26. Same here. That, and I've heard that some shady managers never pay the servers tips due

when they are included as part of a charge to a card. They just take the money themselves.

I read a newspaper article once written by a young journalist, in which she decided to become a waitress at a fairly low-end restaurant for a couple of weeks to see what it was really like, and talk to people for whom it was their only way to make a living. She pointed out that many servers are living hand to mouth, and may be counting on the cash tips they get to help them go food shopping or buy other essential things after their shift is over. If you don't give them a cash tip, they can't do that shopping, and they have to wait for that money, and depending on the behavior of the management, they may never even see it at all. Been there, done that myself (only in a different context. I know what it's like to wait to be paid and, in the meantime, feel damn desperate about how I'm going to make it.

Since reading that article, I don't go out to eat unless I know I (or my companions and I, collectively) have enough money in cash to cover the tip. And I don't get anal about tipping based on the bill without vs. with the tax.

[hellbound-liberal]

2. I'm not in foodservice anymore but when I was still working,

our servers were taxed on the assumption that they got 15% of their sales in tips.

[LakeSamish706]

11. Yep, and I believe that, that is the norm in Departments like Bellmen as well....

I used to do that job for a number of years and we based our reported tips on a basis similar to that...

[appleannie1]

3. Many restaurants figure 15% of your total receipts and deduct it from your pay check.

If you don't get a tip or just get a small tip, you pay taxes on money you did not earn. It does not matter whether it is cash or credit card or debit card. They go by receipts from your tables.

[Blue Diadem]

4. Don't know how it is now but in the mid 90's,

when I was cashiering at a travel plaza, the waitresses tallied up their daily tips and logged them. I remember one telling me she very seldom had a paycheck to cash because it all went to pay the taxes.

[Retrograde]

5. Tips are taxable income in the U.S.

and have been at least since I filled out my first tax return in the 70s. It doesn't matter to the IRS what form they're in: cash, charges - it's all the same as far as they're concerned. The IRS assumes servers take in about 10% of the restaurant charges as tips in the absence of any other documentation.

[Zywiec]

6. Another stupid question for food service workers

Do you tip just the cost of the food/drink, or food/drink + tax?

I was always told just the food and drink.


:hi:

[JerseygirlCT]

13. I'll be interested to read... but we always do on the total - including

tax.

In fact, when we use a coupon (more restaurants around here offering them), we tip based on what would have been the total w/o the discount.

[chemp]

14. again...depends

Having been in foodservice for 25 years, and dated my fair share of waitresses, Unless the service truly sucks I will tip like a motherfucker.
These ladies (and gents) are working their ass off for these tips. Their check barely covers tax deductions.

when I'm intentionally giving a poor tip, it doesn't matter what the bill is.

[HarukaTheTrophyWife]

24. Food/drink and tax

[Bill McBlueState]

31. It barely matters

If your meal before tax is $30, your tax is 5%, and you tip 15%, then the difference between including the tax in the calculation and not including it is 23 cents.

Most people probably round enough that a few cents' difference shouldn't matter.

[dysfunctional press]

32. i usually start with 20% of the total bill- tax included, and round up or add on.

a few extra bucks here and there gets you treated like royalty when you come back, especially if you're at least a semi-regular customer.

[chemp]

7. depends

The fed charges 8% of your total sales as tips. Waitstaff usually get more (15-20%). Credit can be given in paycheck or as cash after the shift, depends on the restaurant.

[LakeSamish706]

8. If you don't report it, your not taxed on it but you are supposed to report it...n/t

[Extend a Hand]

9. We use to have a restaurant

our software printed out the minimum that a server had to claim in order to make minimum wage for the hours worked any thing claimed over that was up to the servers.

[Tab]

10. Employers are obligated to make sure their workers pay taxes on tips

There is some formula of some "assumed tip" calculation. You can't just claim to work 40 hours a week as a waitron and get no tips.

The onus is on the employer. If they don't have you reporting the tips, then they are responsible for your taxes. Therefore they want you to report, at least pretty truthfully.

Also some places split tips among staff. As a former cook, it would piss me off that the waitresses made the big bucks while the cooks did the bulk of the work. I know there's more to it than that, now - waitering is not easy - but still, there's a lot more involved in making service happen than just the waiter themselves. I know they are the front face to the consumer, and take the heat if something is screwed up, but it's up to the cook to get the stuff out on time and properly cook. So, nothing against waitstaff, just that I believe tips should be shared. You can bias that in favor of the waitstaff, but I think it should also be shared with the rest of the people that make it successful.

Credit card records make it easier for the employer to prove that all tips are being properly reported and therefore taxed.

Granted, as a consumer, it's not really your problem to ensure that they report the tips, but behind the scenes they pretty much have to anyway.

[handmade34]

17. good places to work

are restaurants where there is real teamwork and everyone knows how to pull together and share both work and benefits... normally cooks get paid a regular wage(at least minimum wage +) and waitstaff only a few dollars an hour- with the assumption that tips will provide enough to bring in a decent wage. I have worked in places where we all looked out for each other (even the cooks and buspeople) and I have worked in places where the waitstaff were total bitches and looked out for no-one but themselves. Legal or not, moral or not, its pretty much an unspoken rule that waitstaff don't claim 100% of tips.

[NashVegas]

25. Wait Staff Gets Paid For Their Acting Ability

ie, their ability to make a customer feel welcome and create a good impression of the establishment, no matter how crappy they might be feeling, or how big an idiot the customer is. The cook never has to leave the safe confines of the kitchen, unless an eater is so impressed they want to meet the chef - in which case, that person is probably well-paid.

Wait staff also usually has a lower base wage / salary than kitchen staff.

[misanthrope]

29. I firmly stand by my belief that the dining experience...

...is dictated by the customer in the vast majority of cases. The more conscientious a person is, the easier they are to wait on and the better they tip. As a rule of thumb, the bigger a pain in the ass a patron was, the less they would tip and nothing the server did (beyond sheer catastrophe) was going to influence the gratuity.

[NashVegas]

35. If The Customer Is an Out and Out Ass, Sure

I like to think of myself as polite, though :)

65% of my dining experiences with wait-staff, over the course of more years than I want to say, have been adequate. Pleasant, but nothing more and easily replaceable. 15% well above average but not memorably so, 10% below par, similarly; 5% fantastic, and the other 5%, horrendous.

The fantastic 5% tend to be those who make a career of it, moving around with the seasons and they are characters. Having them wait on you isn't about being served as much as making a new friend for an evening; they become a huge part of your dining experience. If someone in your party is showing your server baby photos between dessert and coffee/aperitif, it's a safe bet that server is going to get a 25% tip, at least.

The 5% of horrific wait-staff-inspired dining experiences have happened when the server is either inexperienced, ill-trained (and that happens in places where you've got mad turnover/poor management), having a *very* rough day, or lacked intelligence in a huge way.

[misanthrope]

28. I worked in that industry for almost two decades...

...and have done everything imaginable in a bar/restaurant. I much preferred working in the back of the house. The stress was less, the pay was guaranteed and when it was busy, I was tipped out more by the front of the house.

Working the floor SUCKS!! When it's slow (enjoyable), you make no money and when it's busy, the crap you put up with never seems to equal what you make unless you have a couple of really good tables. You get to see what people are truly like by the way they treat food servers and it's mighty damn disheartening.

[handmade34]

12. not a stupid question...

it has been awhile since I waited tables but about 10 years ago, we were taxed at 8% of our sales unless we claimed a higher amount or credit cards slip showed differently. I eat out a lot(working on the road) and always tip 20% cash so that my server can make her/his own decision about what to claim.

[blaze]

15. When I waited tables

a long time ago.... 1980 or so... our wage was $2.01 an hour. We had to declare enough tips to match the minimum wage, which was $3.10 at the time. So we would all declare $1.09 an hour and that's all we would ever declare, unless it was put on a charge card. All those had to be declared.

[misanthrope]

30. It's still $2 an hour**nm

**

[lifesbeautifulmagic]

16. I recommend leaving cash always

for one, the server can tip her helpers, the busser, barbacks, dishwasher, and cooks, if that is the culture where the server works.

[Lex]

18. regardless of the monetary form of the tip, it should be reported as income

cash, check, credit card, it doesn't matter . . .

It's just that the cash is harder to trace if there is an IRS audit so more people get creative with its reporting.

[OffWithTheirHeads]

19. Fuck that! Our rulers regularly cheat on their taxes

Just ask the Moose turd from Wasilla or many of the folks who were nominated for Obama's cabinet. Fuck em! If the law doesn't apply to them, we shouldn't obey it either!

[Lex]

20. A careful reading shows I wasn't suggesting that you should

or shouldn't obey the law. Suit yourself.

[Stinky The Clown]

21. All tips are taxable

All tips are supposed to be reported as income.

All tipped employees are liars.

The feds have formulae to check if the amount reported is reasonable.

[handmade34]

22. tipped employees are survivors

[Stinky The Clown]

23. I'm proof of that

So are all three of my kids at one time or another (and in the case of one of them .... still).

[NashVegas]

27. False Info

There is a formula the IRS will use, lacking any clear evidence of tip income. It's been this way, I think, since Reagan was in office.

Reagan really hated working class people. My mom's best friend fed, clothed, housed, three kids on a waitress's income in the 1960s/1970s. I can't imagine how anyone could do that, in 2009.

[Kansas Wyatt]

33. I always pay by cash.

Whether the server wants to report it is their business, but I give them the option to correct what has been wrong in this country for years... Working people are taxed too much for what they get in return.

[KansDem]

34. When I was a bartender in 1996-97...

...the GOP Congress passed a law whereby my paycheck would have a certain percentage taken out to cover my "tips." I forgot what that amount was, but it irritated me as some nights I wouldn't make any tips at all but I would still get docked on my paycheck. My tips weren't that impressive since I worked at a family-oriented comedy club and we had more families on Thursday and Sunday night than Friday and Saturday. Families tended to not tip because they saw the "bar" as a concession stand--mainly soft drinks, popcorn, candy, etc.

Some Sundays I went home with no tips at all but still paid taxes as if I did.

More GOP war on the working class...