What does it mean when people say restaurant servers are taxed on the total bill?

Discussion in 'Linux Discussion' started by truelori, May 9, 2008.

  1. truelori Guest

    truelori
    In answering another question about tipping in restaurants, I saw several people who said that servers are taxed on the total bill, so they would lose money if you don't tip on the whole amount.

    Does anyone know what this means exactly? I worked as a server in a fine restaurant for years and I never in my life heard of such a thing.

    The only thing we had to PAY was we had to pay the credit card fees on the tips on credit cards, so of course a cash tip was always appreciated. But we never had to pay taxes on the bill. I don't even understand what this means to be honest. Thanks!
  2. judy c Guest

    judy c
    a lot of restaurants will report to IRS 8 to 10% of the servers total sales as tips they received, as yu know manypeople dont even tip 10% so she is paying taxes on money she didnt get, our restaurant gives the server a chance to report her tips, thus stopping us from ''guess reporting'' and if she only reports what she wants to, then uncle sam will come after her and not the restaurant owner, believe me, servers get audited by IRS as much or more than other professions, simply because they know an average server will fudge on her tip reporting..(have done it myself.til I was audited) the IRS will go to the restaurant she or he works at and request a copy of her total sales for the year, then, if at least 8% isnt reported (someone told me it has increased to 10% now, they will make you pay the extra taxes, so this is why a server should be honest and diners be generous...
  3. Kanakalele Guest

    Kanakalele
    Servers are taxed on their base wages (the $2.50 or whatever piddle they call base pay in that state) against the amount of their food sales for that day. It used to be 8% federal taxation on total food and alcohol sales. So if you don't tip your server at least 8% the government will tax that 8% regardless if she actually made it or not.
  4. At the Applebee's I used to work at, I had to pay back 3% of my total sales to the restruant. that three percent went to the hosts, bartenders and busboys...so basically, whatever the total tab was, I was giving 3% back to my store for others, so if the tip was small 3% was deducted from it...

    alot of times the 3% was 25% of my tips
  5. exjmission Guest

    exjmission
    i think they mean before tax is added vs after the tax is added total
  6. It means we are taxed according to our total sales, or a percentage of it. So we are taxed as if that customer left a 15% tip, but that may not be the case.
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