[Culturechat] Tipping

[Vance Roy]

On 14.11.2004, at 14:27, Barbara Palmer wrote:

> I don't remember exactly how it works but the IRS  assumes the wait  
> persons make a certain amount in tips.  I can't remember whether it is  
> based on their salary or the restaurant's earnings.   They haven't  
> been able to just report anything they want for years.

Check out

http://www.irs.gov/taxtopics/tc761.html

and

http://www.irs.gov/businesses/small/industries/article/ 
0,,id=98401,00.html

The employee who got tipped is responsible to his/her EMPLOYER to turn  
in a monthly report of tip income. The the employer has to figure that  
as income for purposes of withholding, medicare, and SS taxes. The  
total for all tippable employees must equate to at least 8% of the  
total receipts of the restaurant for the month.

To me, that confirms the fact that the customer is just helping the  
employee out with the salary for his employees. Each tip or service  
charge is just a subsidy for the employer. What do you bet that the  
included service charge equals 8% of the receipts? The rest above the  
service charge is not reported. Isn't that nice of the customer to help  
out with the help?

Vance Roy
gigli.saw@dplanet.ch
http://homepage.mac.com/fredch

Life is not a journey to the grave with the intention of arriving  
safely in a pretty and well preserved body, but rather to skid in  
broadside, thoroughly used up, totally worn out, and loudly proclaiming

  WOW What a Ride!