Tipping

[John53]

The question is of course, by how much?

One problem is that an increase in salary for the staff involves an increase in other things the restaurant mast pay, like FICA. For non-US residents, that's a tax paid by both employer and employee to fund Social Security (government pensions) and Medicare (Health insurance for retirees). That doesn't happen with tips. The extra tax just applies to income tax on the staff member.

No idea. Us Aussies only tip if it's exceptional service and I can count on one hand the number of times I've tipped. In fact I don't even need a hand to count to zero.

 

[Revoltingest]

There have been cases of restaurants not passing on all the money that people give in tips.

What can happen isn't necessarily the general case.
Uncle Sam is the biggest hand in employee pockets.

 

[SalixIncendium]

Well, there is the person that takes your order and the cooks. Tips are often shared between the servers and other staff.

The cooks typically make a higher wage than the wait staff, usually at or above minimum wage. Tips are shared with bussers, but not kitchen staff.

 

[Subduction Zone]

Well that's an interesting theory, but my experience, and I eat out a lot, is that the typical conversation goes "Have you decided what you want to order?" "Yes, I'll have the steak". How would you like that cooked?" "Medium rare please" "I'll be right back". I must have missed the mind control somehow.

Your server did not ask you if you wanted anything to drink? Did not mention any specials? Politely suggest an appetizer? Or a desert? A little bit of honest raving without obvious pressure can do wonders.

 

[John53]

Your server die

I would never tip a dead wait person.

 

[Subduction Zone]

I would never tip a dead wait person.

It is a miracle!! The waiter came back to life! Hallelujah.

 

[Revoltingest]

I would never tip a dead wait person.

Anti-zombite!

 

[John53]

It is a miracle!! The waiter came back to life! Hallelujah.

OK, maybe if a waiter crawled across the Ypres salient crawling through mud dodging gas, machine guns and shells I might be tempted to give a tip.

 

[John53]

Anti-zombite!

Are zombies really dead?

 

[Revoltingest]

Are zombies really dead?

They prefer to be called the "living impaired".

 

[We Never Know]

Tipping ... giving extra money to someone despite having already paid for the goods or services. (Not turning things over).

I'll start with an acknowledgement that this is a very emotional subject for many people, particularly wait-staff. No offense is intended, and I hope you will see that what I am suggesting would be better for "tipped" people in the long run.

Traditionally, tipping was an acknowledgement of service beyond the normal standard and consisted of relatively small sums of money. Now it seems to be expected, and the amount to be tipped is also laid down, how I'm not sure. According to some, bad service is not a reason to withhold or reduce a tip!

I'll list a number of things I consider to be wrong with the whole practice. I'll refer to wait-staff as an example, though of course there are many more jobs that involve tipping.

1. Technically, my relationship with a server is not that of employer. That status belongs to the restaurateur. In other words it is not my responsibility to ensure that the server is properly paid.

2.The level of tip that is "proper" is not clear. Once 10% was the level. Now it's crept up to 20 or 25%. How is this information disseminated? Good question, I don't have an answer. Should I tip on the cost of the food? Food plus tax? If delivered, food plus tax plus delivery fee?

3. Why is the amount of the tip determined by the cost of the food? Surely it takes a similar effort to serve a hamburger as to serve a steak? Or to pour a $20 wine as $100 wine?

4. This seems to have been a ploy by employers to pay as little as they can and expect the customer to make up the difference. I see why they like it, but I utterly reject their suggestion that I should play my assigned part in their little scheme. I do tip, and at the suggested level mostly, though quality of service does influence the amount I pay. I do it because I am trapped in a catch-22. If I pay I'm supporting the system, but if I don't someone gets less than they should earn.

5. One reason I hear for tipping is that it is necessary to get good service. Rubbish! When I worked as a programmer, I did a good job as a matter of pride, and knowing that if I didn't I would suffer in some way. No tips were ever offered. And my salary was determined and paid by my employer, not the recipient of the products I created.

Now, to the alternative.

It's very simple. Restaurants should pay a living wage to their employees and recoup that expense through the price of the food. If they want to present it as some kind of "service charge" I guess that's OK, I have some misgivings, but so long as the living wage comes first I'll not argue.

Before someone says it, I recognize that changing the system would be a huge task.

That's it. Comments please. Be polite, I intend to.

Who decides which workers should be tipped and how much to tip them?

 

[Terrywoodenpic]

The question is of course, by how much?

One problem is that an increase in salary for the staff involves an increase in other things the restaurant mast pay, like FICA. For non-US residents, that's a tax paid by both employer and employee to fund Social Security (government pensions) and Medicare (Health insurance for retirees). That doesn't happen with tips. The extra tax just applies to income tax on the staff member.

It seems to me that they should be contributing to social security like everyone else.
Tips used in lieu of wages is a scam.

 

[Terrywoodenpic]

Right now, there is a new law going through parliament in the UK, that will make it illegal for businesses to make deductions from tips, or not pay them in full to staff. It wil also ensure that they are Divided fairly between staff.

Many businesses at the moment treat tips / service charges added to the bill, as their own money, to use as they like. They also use it to pay or make up minimum wages.

 

[Revoltingest]

The question is of course, by how much?

One problem is that an increase in salary for the staff involves an increase in other things the restaurant mast pay, like FICA. For non-US residents, that's a tax paid by both employer and employee to fund Social Security (government pensions) and Medicare (Health insurance for retirees). That doesn't happen with tips. The extra tax just applies to income tax on the staff member.

Not so.
Tips are subject to payroll taxes by both employer & employee.
Are Tips Taxed? Waiters Guide to Taxes on Your Tipped Income

 

[Revoltingest]

It seems to me that they should be contributing to social security like everyone else.
Tips used in lieu of wages is a scam.

No, it's a system that works well.
Just rather odd to ferriners...who don't
know that tips are taxable just like wages.
Are Tips Taxed? Waiters Guide to Taxes on Your Tipped Income

 

[Alien826]

Not so.
Tips are subject to payroll taxes by both employer & employee.
Are Tips Taxed? Waiters Guide to Taxes on Your Tipped Income

I stand corrected. The link you gave wasn't totally clear on FICA, so I did some more research. I'll set it out for anyone who cares.

Tips paid to the restaurant by adding them to the bill are must be entered into the employers payroll and as such are subject to all the same taxes as are the salary payments. That includes FICA. Cash tips are different only in the fact that the employee already has the cash and it is not passed on in the payroll. Strictly, the employee should report all cash tips to the employer, who then enters them into the payroll and they become subject to all taxes, though the employer doesn't actually pay them to the employee. The employee also has to report tips to the IRS, and I'm not sure how it it all balances out so they don't pay tax twice, though I'm sure it does.

So, my point about restaurants assuming greater expenses by paying higher salary and abolishing tipping does not stand. It comes out the same. Actually it would help a bit because their tax returns would be less complicated.

Thanks for the correction. I have learned something new and that's always good.

 

[Revoltingest]

I stand corrected. The link you gave wasn't totally clear on FICA, so I did some more research. I'll set it out for anyone who cares.

Tips paid to the restaurant by adding them to the bill are must be entered into the employers payroll and as such are subject to all the same taxes as are the salary payments. That includes FICA. Cash tips are different only in the fact that the employee already has the cash and it is not passed on in the payroll. Strictly, the employee should report all cash tips to the employer, who then enters them into the payroll and they become subject to all taxes, though the employer doesn't actually pay them to the employee. The employee also has to report tips to the IRS, and I'm not sure how it it all balances out so they don't pay tax twice, though I'm sure it does.

So, my point about restaurants assuming greater expenses by paying higher salary and abolishing tipping does not stand. It comes out the same. Actually it would help a bit because their tax returns would be less complicated.

Thanks for the correction. I have learned something new and that's always good.

The real problem with moving to tipless dining
is that it's such a radical change, it would all
have to happen simultaneously....I think.
Tough to coordinate.

 

[Subduction Zone]

I stand corrected. The link you gave wasn't totally clear on FICA, so I did some more research. I'll set it out for anyone who cares.

Tips paid to the restaurant by adding them to the bill are must be entered into the employers payroll and as such are subject to all the same taxes as are the salary payments. That includes FICA. Cash tips are different only in the fact that the employee already has the cash and it is not passed on in the payroll. Strictly, the employee should report all cash tips to the employer, who then enters them into the payroll and they become subject to all taxes, though the employer doesn't actually pay them to the employee. The employee also has to report tips to the IRS, and I'm not sure how it it all balances out so they don't pay tax twice, though I'm sure it does.

So, my point about restaurants assuming greater expenses by paying higher salary and abolishing tipping does not stand. It comes out the same. Actually it would help a bit because their tax returns would be less complicated.

Thanks for the correction. I have learned something new and that's always good.

There is a minimum amount that waiters have to declare as tips. I forgot the exact percentage, but many years ago I was a waiter for a while. In fact I was one when that law went into effect. We were paid less than minimum wage and the amount that we declared had to be over a minimum wage. I guess I was not a very good waiter since I rarely made much over minimum wage

This was long enough ago that almost everything was cash. That might not work as good today.

 

[Revoltingest]

There is a minimum amount that waiters have to declare as tips. I forgot the exact percentage, but many years ago I was a waiter for a while. In fact I was one when that law went into effect. We were paid less than minimum wage and the amount that we declared had to be over a minimum wage. I guess I was not a very good waiter since I rarely made much over minimum wage

This was long enough ago that almost everything was cash. That might not work as good today.

I've run across other situations where the IRS
taxes income never received. **** the IRS.

 

[Subduction Zone]

The real problem with moving to tipless dining
is that it's such a radical change, it would all
have to happen simultaneously. Tough to do.

Or at least simultaneously in one city. When Seattle started their fifteen dollars an hour minimum wage (now over $16.00) restaurants noted that on their menus since they did have to raise prices and said that tipping was still appreciated but not ethically mandatory.