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by ydt 3459 days ago
Here's the thing. I worked in the restaurant business in various capacities all through college. As a cash transaction, it will come as no surprise that a lot of tips go unreported as income. From time to time the IRS will decide the reported income from a restaurant seems low and audit the staff. It was generally understood that if you had reported 10% of your sales as a server/bartender as tip income you'd be ok. If not you were in trouble (and this happened to people I know). So if you tip $20 on a $500 dollar tab because it's the same amount of work as $100 dollar tab. your server will most likely still claim $50 in income and be at about break even once the taxes are paid on it.
2 comments
bkor 3459 days ago
This still doesn't explain why it should be a percentage other than that everyone assumes a percentage.
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ydt 3459 days ago
You're right. I didn't say it did. I was just trying to give some insight into how it works for people that have maybe never worked for tips. I am of two minds about tipping. As a customer it would be nice if these jobs provided a decent base pay + benefits and everything was just priced into the meal. On the other hand I would have hated this when I worked for tips, as I hustled and provided good service which allowed me to make a lot more than co-workers who didn't.
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nommm-nommm 3457 days ago
>hustled

This word is telling. If I go out to dinner I'd really prefer to not be hustled.

hus·tle ˈhəsəl/ verb

    1.
    force (someone) to move hurriedly or unceremoniously in a specified direction.
    2.
    North Americaninformal
    obtain by forceful action or persuasion.
    3.
    North Americaninformal
    engage in prostitution.
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ensignavenger 3459 days ago
How would they be "in trouble"? You mean the IRS is going to ask them scary questions? Or does the IRS really go around fining people with no more evidence than "Well, we think that maybe you earned more in tips than you reported, because someone else reported that they earned more..." Any CPAs or tax attorneys care to share their experiences? I can't see how the latter could be legal.
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