Tipping: Do you agree with the practice?

[Queen Margo]

Like every restaurant is jacking up their prices anyways, just jack it up a bit more and pay employees a real wage.

If you are going to pay them a "real" wage then you better offer health insurance, and a retirement package. Sheesh, this job is not meant to be a career. When you are a server, there is NO benefits. Same with fast food, so STOP this living wage nonsense. A GOOD server can make a decent amount, believe it or not. What they don't get is any retirement, health, vacation, etc. benefits. Plus, their social security would be low if they remained in this position. Offering a "living wage" is what?

 

[Carjosse]

Lots of restaurants do this. Especially the 'mom and pops'.

Thankfully here that is very illegal and would get you a very unfriendly visit from the Ministry of Labour. Again sure in some states it is completely legal.

 

[ttwtt78640]

OK, I am not sure what you are getting at. Maybe I am a bit slow this morning.

How much of your tip income did you report for (federal and/or state) income taxation purposes? I work as a self-employed handyman and only my commercial customers report my income to IRS (for which I receive a 1099 and they write it off as business expense). I don’t report other cash/check income or accept credit/debit card payments.

 

[reinaert]

Thankfully here that is very illegal and would get you a very unfriendly visit from the Ministry of Labour. Again sure in some states it is completely legal.

Several small chains in my area are facing repercussions for wage and tip theft right now. But not because NH has a robust enforcement environment or is labor friendly (neither are true). It's because staff became relentless. Sadness, thus is another form of unpaid labor.

 

[Queen Margo]

How much of your tip income did you report for (federal and/or state) income taxation purposes? I work as a self-employed handyman and only my commercial customers report my income to IRS (for which I receive a 1099 and they write it off as business expense). I don’t report other cash/check income or accept credit/debit card payments.

As little as I could.

 

[Helix]

I thought you meant like the owner taking a portion of the tips directly for themselves.

Yes, that's exactly what's happening.

 

[Helix]

Also, since this is a thread about tipping I have to post this :

 

[ttwtt78640]

The POS system reports for you. Also, most service are 1040a or easy.

How? The IRS doesn’t know which owner, server, bartender, prep cook or buss person accepted a (portion of a) given tip or how much of it. The federal tax law says that employees must report tips to their employer (monthly?), yet if that employer reports some other (lesser) amount to the IRS then who is going to complain?

 

[ttwtt78640]

As little as I could.

Yep, as do I.

 

[DrewPaul]

I prefer to give cash tips directly to whoever is providing personal service such as bringing food, cutting hair or massage and so forth. I like giving a buck or two at the drive through window. In my mind, if you can't afford to tip, you can't afford the service. Stiffing someone for poor service is acceptable.

 

[ttwtt78640]

If you are going to pay them a "real" wage then you better offer health insurance, and a retirement package. Sheesh, this job is not meant to be a career. When you are a server, there is NO benefits. Same with fast food, so STOP this living wage nonsense. A GOOD server can make a decent amount, believe it or not. What they don't get is any retirement, health, vacation, etc. benefits. Plus, their social security would be low if they remained in this position. Offering a "living wage" is what?

The term “living wage” is often used, but is highly debatable and very hard to define. You made a good point about Social Security.

 

[TheParser]

Grubhub and the like really eat into their bottom line.

When I use Grubhub, a few restaurants deliver the food themselves.

I guess that they save from having to pay certain fees to Grubhub.

Those few restaurants are upfront about the tip. For example, it will say $6.75. Presumably, it will not accept the order if one refuses to agree to that tip.

 

[ttwtt78640]

When I use Grubhub, a few restaurants deliver the food themselves.

I guess that they save from having to pay certain fees to Grubhub.

Those few restaurants are upfront about the tip. For example, it will say $6.75. Presumably, it will not accept the order if one refuses to agree to that tip.

Any compulsory payment for goods/services isn’t legally a tip no matter how it’s labeled on a bill. What you describe is actually a service charge.

An employer's or employee's characterization of a payment as a "tip" is not determinative. Distributed service charges (often referred to as "auto-gratuities" by service industries) should be characterized as non-tip wages. Revenue Ruling 2012-18 reaffirms the factors which are used to determine whether payments constitute tips or service charges. Q&A 1 of Revenue Ruling 2012-18 provides that the absence of any of the following factors creates a doubt as to whether a payment is a tip and indicates that the payment may be a service charge:

• The payment must be made free from compulsion;
• The customer must have the unrestricted right to determine the amount;
• The payment should not be the subject of negotiation or dictated by employer policy; and,
• Generally, the customer has the right to determine who receives the payment

Tip recordkeeping and reporting | Internal Revenue Service

Provides information and resources dealing with reporting tip income for all industries that deal with tipping of employees.

www.irs.gov

 

[Hari Seldon]

When I use Grubhub, a few restaurants deliver the food themselves.

I guess that they save from having to pay certain fees to Grubhub.

Those few restaurants are upfront about the tip. For example, it will say $6.75. Presumably, it will not accept the order if one refuses to agree to that tip.

I can only speak from what my daughter told me while waitressing during college. She graduated 2 years ago but mentioned the Italian restaurant she was at made next to nothing on many of the meals to be picked up by those services.

We don't really order delivery much except from a local Chinese place. As soon as they hear my wife they know low mein no veggies. Lol!

 

[TheParser]

She graduated 2 years ago but mentioned the Italian restaurant she was at made next to nothing on many of the meals to be picked up by those services.

A few restaurants deliver my food with a gentle note asking me to order directly from them, not through a food delivery service, which -- as you mentioned -- cuts into their profits.

 

[Hari Seldon]

A few restaurants deliver my food with a gentle note asking me to order directly from them, not through a food delivery service, which -- as you mentioned -- cuts into their profits.

Yea, they use the service as marketing. Can't blame them.

 

[Ginger Ale]

Tippings weird, America is weird, we have an ass kissing culture because we depend on the wages. Whether it's a regular paying job, or a tip orientated one, we have to beg for our food.

In most European countries they make 25 bucks an hour working at McDonalds. They can live off of it. When you walk into a store they don't all swarm on you like their life depends on it to get that commission or tip, they're normal, and just doing their actual job.

I overtip because I know how uncomfortable it is to beg for the money, I do it, most of us do, but I would love to see our wages increase to match inflation instead, and I'd love for people to just get to do their jobs, and not have to "over" do the service attitude.
Yes, it "seems" so friendly, but we all know it's just a sad fact of our society and they're faking it to make it.

Doing your job well shouldn't mean kissing the most ass.

 

[The Stars Tremble]

Tipping should not be compulsory, or even urged on customers. Wait staff should be paid a fair wage, whether business is good or not.

These are not really hard jobs. Customers have a right to efficient and friendly service, providing the customer is also polite. Perhaps the worst of the tipping regime is when competent staff are friendly (or even flirtatious) to particular customers who treat them like shit, only because they expect a big tip. It feels like prostitution.

 

[reinaert]

How? The IRS doesn’t know which owner, server, bartender, prep cook or buss person accepted a (portion of a) given tip or how much of it. The federal tax law says that employees must report tips to their employer (monthly?), yet if that employer reports some other (lesser) amount to the IRS then who is going to complain?

The POS system records and assigns everything.

 

[ttwtt78640]

The POS system records and assigns everything.

Tipping is barely mentioned in the following POS system link.

Tipping support​

For restaurants and service professionals, tips can be a big part of getting paid. POS solutions that allow customers to add a digital tip during the checkout process, make it more likely that they’ll tip.

What Is a POS System And How Does It Work?

Researching your POS options? This overview can help you put together the right setup for your business, no matter where you sell.

squareup.com

The following link describes what IRS requires, but how many actually comply with ‘the letter of the law’ is certainly debatable. After all, it imposes an uncompensated compliance (record keeping) cost on both the employee and employer. I suspect that few employees or employers spend the time and effort required to accurately and completely comply.

Tip recordkeeping and reporting | Internal Revenue Service

Provides information and resources dealing with reporting tip income for all industries that deal with tipping of employees.

www.irs.gov

 

[reinaert]

Tipping is barely mentioned in the following POS system link.

What Is a POS System And How Does It Work?

Researching your POS options? This overview can help you put together the right setup for your business, no matter where you sell.

squareup.com

The following link describes what IRS requires, but how many actually comply with ‘the letter of the law’ is certainly debatable. After all, it imposes an uncompensated compliance (record keeping) cost on both the employee and employer. I suspect that few employees or employers spend the time and effort required to accurately and completely comply.

Tip recordkeeping and reporting | Internal Revenue Service

Provides information and resources dealing with reporting tip income for all industries that deal with tipping of employees.

www.irs.gov

Idc.

If you tip on a card, that amount is reported. And, depending on the state, taxed.

 

[ttwtt78640]

Idc.

If you tip on a card, that amount is reported. And, depending on the state, taxed.

idc either, but simply repeating an assertion makes me care even less.

 

[Sweden]

A tip should only be for outstanding exceptional service. Otherwise it is nothing but a scam or subsidizing an employee’s wage. Tipped wage should be eliminated and the minimum wage increased. In Quebec the tipped minimum wage is not that much less than the regular minimum wage so I don’t feel bad tipping less if the service was not great or just average. Ontario eliminated theirs, which is the right move. Literally everything and everyone is asking for ****ing tips these days, it is insane.

People says tips encourage better service, they do not. Bad servers know they will get a tip regardless due to social pressure. One time I had a server who got pissed when I gave them no tip when they completely ignored my girlfriend and I unless we flagged him down with our arms to take our order and never once came by to even refill our water or even take our plates away. There was only three other people iin the restaurant.

In Sweden tipping is unusual. Mainly confined to expensive restaurants the practice is seen as demeaning and based on class differences, tipper asserting 'superiority' over the tippee. Strange that the custom prevails in the 'egalitarian' USA - just another example of American hypocrisy?

 

[ttwtt78640]

In Sweden tipping is unusual. Mainly confined to expensive restaurants the practice is seen as demeaning and based on class differences, tipper asserting 'superiority' over the tippee. Strange that the custom prevails in the 'egalitarian' USA - just another example of American hypocrisy?

IMHO, it serves mainly as an income (and FICA payroll) tax avoidance scheme. Much the same is true of employer provided medical care insurance.

 

[Queen Margo]

In Sweden tipping is unusual. Mainly confined to expensive restaurants the practice is seen as demeaning and based on class differences, tipper asserting 'superiority' over the tippee. Strange that the custom prevails in the 'egalitarian' USA - just another example of American hypocrisy?

Yes, we are such a horrible country that we have to leave the border open so that they pour in