When Eating Out, Do You Tip On The Bill Pre or Post Tax?

[audreyh1]

Quote:

Originally Posted by HadEnuff In Rome, whenever I asked if the tip was included, BEFORE I SAT DOWN, the answer was "yes, all included", but if I forgot and waited until the check arrived I would get an embarrassed apologetic smile and a "no, not included".....

Good one!

[audreyh1]

We go back and forth. I think if the bill is small we do post-tax, and usually up anyway. If the bill is high we tend to do pre-tax. If we enjoy the service we tip 20%, unless the bill is low in which case it will be higher.

[DROPOUT]

I normally double the tax amount ... Which is 9.25% here ... So, they normally get 18.5% assuming service was OK or better

[Sunset]

Quote:

Originally Posted by pb4uski I usually take 20% of the bill before tax and add that to the bill, ... If service is particularly good I may a a dollar or two more and if it is really bad i may subtract a dollar or two but both is rare.

That's what I do , plus if its a cheap place I will round up an extra buck.

[Fishingmn]

20% pretax

[gerntz]

15% is normally more than enough, particularly when there's a significant amount of alcohol on the bill that's marked up 3X or more. Ridiculous. In low price places, tip more as those waiters need it more - they work as hard as those at expensive places.

The difference between before & after tax is small in the grand scheme vs. the actual tip %.

This thread feels like those that tip higher need to let it out to the rest of us to help themselves feel better.

[scrabbler1]

Quote:

Originally Posted by Sunset That's what I do , plus if its a cheap place I will round up an extra buck.

One time, a few years ago, My LF and I were at a place out of town which was not only a cheap place, but we had good waitress service (she redid some extra takeout food when we saw it wasn't prepared right, probably not her fault), and sat at her table a little long. I tipped her an extra $10. She, probably some early 20s kid, looked like she was walking on air as we left!

[sengsational]

Quote:

Originally Posted by rodi U.S. Department of Labor - Wage & Hour Divisions (WHD) - Minimum Wages for Tipped Employees

Interesting table. I never knew how this worked. I knew there was some very low number ($2.13) that the federal government mandated. I always thought that if the server didn't earn enough tips to get above the federal minimum wage (additional $5.12/hr in tips), that was just their "tough luck" and it was up to me to make sure that didn't happen. But they are all guaranteed federal minimum wage. Not like that's a lot, or anything, but different than I thought.

So if your server typically doesn't make more than $5.12/hr on tips, your extra tip dollar is one dollar the employer doesn't have to pay the employee. $5.12/hr seems extremely low (~$40/shift?), but at a place with a low volume of customers, maybe. The range of tips per hour for the US is apparently $1.27 - $15.97 *Quite a wide range.

I found a chart there that was interesting in that "nobody" makes more than $22K. I think maybe there's some hanky-panky with tips, because, in a swanky restaurant, at $40+ per table, 10+ tables per night, I could see getting to the $75K - $100K mark. Or maybe it's just that the site where I found the chart doesn't attract servers making more than $22K.

[kcowan]

I am amazed that some governments have decided to give those that can afford to eat out a pass on pulling their weight. It ought to be an easy 10% and up for revenues from meals. Such low hanging fruit...

[pb4uski]

Quote:

Originally Posted by kcowan I am amazed that some governments have decided to give those that can afford to eat out a pass on pulling their weight. It ought to be an easy 10% and up for revenues from meals. Such low hanging fruit...

You are the first person that I can recall suggesting a sin tax for eating out.

[Music Lover]

Quote:

Originally Posted by sengsational I found a chart there that was interesting in that "nobody" makes more than $22K. I think maybe there's some hanky-panky with tips, because, in a swanky restaurant, at $40+ per table, 10+ tables per night, I could see getting to the $75K - $100K mark. Or maybe it's just that the site where I found the chart doesn't attract servers making more than $22K.

My friend's daughter works at an average restaurant ($5.99 breakfast, wing nights) and earns about $10k a year in salary and $30k in tips working just 3 days/nights a week. One must take into account that almost no one reports all the tips they earn. She reports about $3k in tips, effectively earning $25k+ tax free.

In a typical restaurant, a table of 4 people could be leaving a $12 - $15 tip on a $70 dinner bill. Times that by 2 seatings of 10 tables and $200 a night in tips would not be unusual. I used to earn $30 - $40 a night in tips delivering pizza in 1980 when minimum wage at the time was a little over $3.

[Sunset]

Quote:

Originally Posted by pb4uski You are the first person that I can recall suggesting a sin tax for eating out.

Well it might be correct, as personally when I was a kid, we only ate out a few times per year mostly for Birthdays, etc.

Now DW & I will go out 2-4 times per week, not expensive places, but really the motivation is lazyness (Sloth) , which is pretty close to a sin

[Sunset]

I just looked it up and many places do charge an extra tax for restaurant food at least in IL.

[Clone]

So a basic question- not intended to be snarky or anything like that.

If the restaurant is paying less than the minimum wage per hour, and the staff is pocketing the tip money, will the staff end up with paying a tiny amount into Social Security? If the staff reports wages, does the employer pay the employer side of the FICA taxes on those tips?

I could see the situation where folks are pocketing the cash, and when it comes time to draw SS in retirement they have minimal recorded earnings, thus minimal SS income.

[M Paquette]

Quote:

Originally Posted by Clone So a basic question- not intended to be snarky or anything like that. If the restaurant is paying less than the minimum wage per hour, and the staff is pocketing the tip money, will the staff end up with paying a tiny amount into Social Security? If the staff reports wages, does the employer pay the employer side of the FICA taxes on those tips? I could see the situation where folks are pocketing the cash, and when it comes time to draw SS in retirement they have minimal recorded earnings, thus minimal SS income.

In a job that includes tips, there is an expectation by the IRS that tip income will be reported. It's generally a big ole red flag if someone works a job that usually gets tip income but doesn't report it. The name of the business and other employees with that Employer Identification Number who do report tip income are clues that maybe this taxpayer didn't report something he should have.

Most folks are smart enough to report some of the tip income, at least.

[CRLLS]

I generally tip minimum of 20% on the before-tax bill, then round up. Rounding up makes up for adding it to the credit card bill and the wait staff losing 2-4% of "their" tip. I also use the "full value" of the meal when I use a coupon or get a Senior discount. If the service is terrible, then seldom do less than 15%. I tip on the pretax amount because I don't feel that the wait staff should get a bump up just because they work in a higher taxed area, but they should get a fair tip for their efforts.

[harley]

DW and I had dinner (salad bar) at a Ruby Tuesday this evening. I noticed that they listed various tip amounts (15, 18, and 20%) on the receipt, I assume for the math impaired. Because of this thread, I actually looked at the amounts and noticed the blurb stating that the tip amount was based on the bill including tax. I guess they are implying that you are supposed to include the tax when calculating the tip. So, there's the answer to the thread. No more discussion needed.

[scrabbler1]

Quote:

Originally Posted by harley DW and I had dinner (salad bar) at a Ruby Tuesday this evening. I noticed that they listed various tip amounts (15, 18, and 20%) on the receipt, I assume for the math impaired. Because of this thread, I actually looked at the amounts and noticed the blurb stating that the tip amount was based on the bill including tax. I guess they are implying that you are supposed to include the tax when calculating the tip. So, there's the answer to the thread. No more discussion needed.

I am assuming you are being tongue-in-cheek because, as I wrote in an earlier post in this thread, the restaurant I ate at which posted those same suggested tip amounts and percentages based the suggestions on pretax amounts.

[harley]

I'm always tongue-in-cheek, and what? You expect me to actually read the other posts?

[John Galt III]

If you knew your the tip you left was going to go into a common pool, to be split evenly amongst the wait-staff, and who-knows-who else, would it affect the amount you left? A few years ago, tip-pooling was in the news. I would only leave 15% if that were the case.