Gratuities

[Akkers]

16 hours ago, Biker19 said:

the waiter tips are NOT tax free - they are supposed to declare all that income and be taxed on it

 

Thats the theory. But how many waiters actually declare the extra earnings from tips?

On a side note, I recall a story. An certain Asian restaurant opened in North of England back in the 80s and became famous overnight. They actively not allowed tipping; it was prohibited altogether. Their reasoning was that they paid their staff decent wages and there was no place for tips which were demeaning. Anyway they continued with this practice for about 25yrs. But then they fell on hard times and felt the economic pressure. At this stage they started to allow tipping. Presumbly they were no longer paying 'decent' wages even though we now have minimum wage by law.

[goldfish65]

The outrage for restaurant servers not paying their "fair share" of taxes on part of their very modest incomes is laughable. Meanwhile those making seven figures have so many write-offs. Dealing with people who expect so much while tipping begrudgingly, NO WONDER so many servers have left the business. 

[SeattleAl]

1 hour ago, goldfish65 said:

The outrage for restaurant servers not paying their "fair share" of taxes on part of their very modest incomes is laughable. Meanwhile those making seven figures have so many write-offs. Dealing with people who expect so much while tipping begrudgingly, NO WONDER so many servers have left the business. 

15 years ago my daughters was a waitress at a local coffee shop while in college and worked about 30 hours a week. I did her taxes for her and she reported $42,000 in income, but also had about $20,000 in tips she did not report (and mind you, none of her co-workers did either). She was making $10,000 more per year then her dad, who has a masters degree and 25 years in his field. I think many of us would find that many people in the service trades that get tips actually make more than we do. 

 

Edited February 23, 2022 by SeattleAl

[grandgeezer]

1 hour ago, SeattleAl said:

15 years ago my daughters was a waitress at a local coffee shop while in college and worked about 30 hours a week. I did her taxes for her and she reported $42,000 in income, but also had about $20,000 in tips she did not report (and mind you, none of her co-workers did either). She was making $10,000 more per year then her dad, who has a masters degree and 25 years in his field. I think many of us would find that many people in the service trades that get tips actually make more than we do. 

 

The math doesn’t sound right. 30 hours a week times 52 weeks equals 1560 hours. $42,000 in declared income plus $20,000 not reported equals $62,000. $62,000 divided by 1560 hours worked is almost $40 per hour. Working in a local coffee shop??

That $62,000 is $10,000 more than someone with a masters degree and 25 years of experience? Why bother going to school?

 

 

[SeattleAl]

Washington state automatically assumed and applied a certain amount of the restaurant's sales to what you were paid. In this circumstance, it only accounted for about 1/3 of the tips received. It was a ripoff to the non-tipped employees, but accounts for the difference between her wage and what the state assumed was her pay.

 

BTW, at the beginning of the Covid pandemic, I watched CNN interview a waitress in NYC, who worked two part time waitress jobs. She said she made about $180,000 per year. A few days later a local TV station interviewed a Seattle waiter, who mentioned he made about $50 and hour. I get not all tipped service people make this much, but many do very well.

[taglovestocruise]

3 hours ago, grandgeezer said:

The math doesn’t sound right. 30 hours a week times 52 weeks equals 1560 hours. $42,000 in declared income plus $20,000 not reported equals $62,000. $62,000 divided by 1560 hours worked is almost $40 per hour. Working in a local coffee shop??

That $62,000 is $10,000 more than someone with a masters degree and 25 years of experience? Why bother going to school?

 

 

Yes a coffee shop.  I live in Southern Ca. Went out for breakfast in the tourist trap part of our town on Sunday.  Four of us having eggs Benedict,  3 of us having a morning cocktail and a Irish coffee after breakfast.  Total bill a whopping $162.00. Checked the box for a 20% tip.  The server received a $32 Tip from our one table, plus $13.00 per hour wages. I think she had 3 tables. I would guess she makes close to $75 per hour on a good Sunday morning.  We were with our son who used to be a bartender at the local Indian casino several years ago. He tips big because he used to receive big tips.   He would constantly make over $350 per night on Fridays and Saturdays in tips, and that would be after splitting with waiters and the bar back. As someone previous said most people have no idea how much a waiter, waitress or bartender can make. Our son made close to $40,000 a year in tips and only claimed a few thousand. 

[goldfish65]

Very unusual for a server to make the money mentioned above. Seattle and New York possibly but not in most parts of the country and I can tell you, not in the South where I live. 

[topnole]

3 minutes ago, goldfish65 said:

who is going to be a server for 15 bucks an hour? 

High school and college kids.  

[HBE4]

Adam Ruins Everything. Here, he "ruins tipping". 😉 I guess we can thank Prohibition for this hot topic.😄

 

 

Edited February 24, 2022 by HBE4

[goldfish65]

18 minutes ago, topnole said:

High school and college kids.  

Haha! People will really be indignant over the service they'll be getting. 

[topnole]

15 minutes ago, goldfish65 said:

Haha! People will really be indignant over the service they'll be getting. 

Service would probably be better than the crabby disgruntled career restaurant servers. I worked at a restaurant while in college and witnessed how much they hate nearly every customers.  

[goldfish65]

14 minutes ago, topnole said:

Service would probably be better than the crabby disgruntled career restaurant servers. I worked at a restaurant while in college and witnessed how much they hate nearly every customers.  

Haha! You nailed it. Glad you stayed in school. 

[neverbeenhere]

Minimum tip reporting requirement(allocation) for larger bars and restaurants is 8% or sales. (without a special IRS agreement)

 

Of course , the actual requirement is 100% of all tips received.

[sailor05]

Just prepay the gratuities and it will be on the invoice and you can consider it in the "base price" this way if it makes you feel better. 

[Akkers]

I am not sure how the system works in the US but here in the UK its different. A bill in a restaurant includes all taxes etc. In most place the price quoted in the menu includes service and taxes. If waiters get anything extra as goodwill (tip) then technically they have to declare that to the taxman. BUT hardly anyone does; tips go straight to the pocket. I find this whole thing mind-boggling.

Tipping is not big in the UK but in higher end places people feel obliged to tip to show their social standing. Personally I avoid tipping here because staff are being paid minimum wage. If I go abroad to a third-world coluntry then I do tip because I see staff in very horrible situations.

btw Great video!!!

Edited February 25, 2022 by Akkers

[CaroleSS]

1 hour ago, Akkers said:

I am not sure how the system works in the US but here in the UK its different. 

If by now you still are not sure how the system works in the US, then you haven't been reading the posts. Please go back and re-read the entire thread. I think it has been very clearly explained.

 

When I go on holiday in the UK, it is very confusing as you drive on the "wrong side of the road". "Here in the [US] it's different"....it is hard to understand and making turns and navigating roundabouts is haaaaard.......but guess what? Not my country. I abide by the rules and customs in the country I am visiting. It is what it is. Complaining about it here won't change anything. Accept it or don't go.

[SRF]

On 2/23/2022 at 6:51 AM, Akkers said:

 

Thats the theory. But how many waiters actually declare the extra earnings from tips?

 

If the tips are put on a credit card, they are automatically declared by the employer.

 

In some states, there is an assumed amount of tips, so even if they are not declared, they get taxed on what that probably made in tips.

 

In what country does the tax man not get their share.  Or more.

[Akkers]

1 hour ago, CaroleSS said:

how the system works in the US

I think you have automatically assumed that I will cruising in or from US; I have no intention of that. My debate relates to cruises in general sailing in Carribean, Europe and Far East. So I cannot see how they can impose US practices on cruises sailing in foreign waters.

I just seen a few videos about tipping in US and am amazed about its orgins and how it has helped to segregate and marginalise workers even to this day:

 

[Yorkshire-Pudding]

2 hours ago, CaroleSS said:

If by now you still are not sure how the system works in the US, then you haven't been reading the posts. Please go back and re-read the entire thread. I think it has been very clearly explained.

 

When I go on holiday in the UK, it is very confusing as you drive on the "wrong side of the road". "Here in the [US] it's different"....it is hard to understand and making turns and navigating roundabouts is haaaaard.......but guess what? Not my country. I abide by the rules and customs in the country I am visiting. It is what it is. Complaining about it here won't change anything. Accept it or don't go.

 

Whilst you may be right that visitors should abide by the country being visited, there is also the issue of instances when citizens feel that the cultural norms of other nations are being imposed onto them in their home country.

 

I am a UK national and have also cruised on sailing departing outside the UK. However my last pre-Covid 2019 sailing was on Independence out of Southampton. On that sailing, you could not get to Guest Services most days because of the long queues as many of the British passengers were removing the auto gratuities. It's not that British people won't tip, but a tip is seen as discretionary and the perception of British cruisers is that they are being forced to tip people regardless of the service they received on a holiday which is already perceived as 'expensive', so they remove them and will often tip in cash, those they have personal contact with.

 

From speaking to crew members, the recurrent comment was that many of their colleagues don't want to work on British sailings because of the British tipping culture. The result is two unhappy groups. British passengers who feel they are being 'stiffed' and crew who also feel they are being 'stiffed' into  lower earnings whilst expected to provide the same level of service as they would in the USA.

 

The UK cruise market is dynamic with lots of operators, many of which do not add daily auto gratuities. Perhaps Royal on non-US sailings should follow the model of sailings from Australian waters where tips are 'built in' the costs up front. I note that its sister brand Celebrity, has now moved to its Always Included model.

[SRF]

20 hours ago, Yorkshire-Pudding said:

 

The UK cruise market is dynamic with lots of operators, many of which do not add daily auto gratuities. Perhaps Royal on non-US sailings should follow the model of sailings from Australian waters where tips are 'built in' the costs up front. I note that its sister brand Celebrity, has now moved to its Always Included model.

 

Perhaps they might.  IF the other lines were taking passengers away from them.

 

So convince everyone in the UK to NOT book Royal, and maybe something will change.

[sgmn]

21 hours ago, Yorkshire-Pudding said:

 

Whilst you may be right that visitors should abide by the country being visited, there is also the issue of instances when citizens feel that the cultural norms of other nations are being imposed onto them in their home country.

 

I am a UK national and have also cruised on sailing departing outside the UK. However my last pre-Covid 2019 sailing was on Independence out of Southampton. On that sailing, you could not get to Guest Services most days because of the long queues as many of the British passengers were removing the auto gratuities. It's not that British people won't tip, but a tip is seen as discretionary and the perception of British cruisers is that they are being forced to tip people regardless of the service they received on a holiday which is already perceived as 'expensive', so they remove them and will often tip in cash, those they have personal contact with.

 

From speaking to crew members, the recurrent comment was that many of their colleagues don't want to work on British sailings because of the British tipping culture. The result is two unhappy groups. British passengers who feel they are being 'stiffed' and crew who also feel they are being 'stiffed' into  lower earnings whilst expected to provide the same level of service as they would in the USA.

 

The UK cruise market is dynamic with lots of operators, many of which do not add daily auto gratuities. Perhaps Royal on non-US sailings should follow the model of sailings from Australian waters where tips are 'built in' the costs up front. I note that its sister brand Celebrity, has now moved to its Always Included model.

I would be happy for tips to be built into the basic fare so they cannot be removed 

[kernow]

I've lived in the UK (not London area)all my life and pretty much everyone I know and socialise with tips around 10 per cent in full service restaurants from chains to higher end. Admittedly if you don't tip here the staff will not be muttering and giving dirty looks like they may in the US but I still think most people do it.

[time4u2go]

13 hours ago, SRF said:

 

I guess over 40 years nothing every changes in a culture.

 

Great point.

[Akkers]

On 2/26/2022 at 1:46 PM, sgmn said:

would be happy for tips to be built into the basic fare so they cannot be removed 

Exactly my point. If staff are providing a service they should be paid by the employer. The employer should then build that into the base price. Customer does not lose out as he/she will be paying roughly same amount. I guess some staff wil not like it as they will lose out on un-taxed earnings.

[Akkers]

'Tipping is a US thing' - I now understand it is. Is it PITY money though?

I was watching a video about this other day. They said that in 1800s people returning from Europe started tipping but this was banned by the govt as it meant inequality. But it made a come back after the abolishment of slavery. When slaves were freed, most of them found it hard to find jobs. With so many people unemployed they were prepared to take up anything. So much so that some took up jobs where there was no wage; they worked for free. And so it happened that bystanders or people using their free service would leave 'something'. Thus tipping took off again.

In modern day US a lot of employers are not payingh the minimum legal wage; they expect employees to make that up from tips. Brilliant system!

In a modern and civilised society should we not pay the employees their rightful dues in form of a decent wage?