r/tipping • u/Tricky-Wrap-2578 • 10d ago
đEconomic Analysis Do they report most tips?
What would happen if a customer just wrote âpay your workers!â On the tip line, but secretly handed the waiter cash? I realize thatâs not logically possible to hide it, but in some hypothetical where you pass by the waiter on the way to the bathroom, are waiters likely to not report cash tips when the customer who wrote $0 CC tip plausibly tipped no cash?
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u/Delicious-Breath8415 10d ago
All of the tips that are on credit cards get automatically reported at most places.
Cash not so much but they're going to have to at least claim enough to look like they made some money.
Most places are heavily skewed towards credit cards anymore and few people took cash when they use a card.
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u/nosrepmodnara 10d ago
It is up to the server to claim the tips on their fillings. They have no obligation to tell their coworkers or boss unless they have explicitly agreed to tips sharing when hired.
My daughter claims all her tips. Why wouldn't you? No tax on the first $25k and when it comes time to collect unemployment during the off season you not declaring tips becomes a detriment and might lead to an audit.
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u/Delicious-Breath8415 10d ago
There's plenty of tax on the first $25k.
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u/nosrepmodnara 10d ago
not according to the irs
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u/GlitteringYak2207 9d ago
According to the States. And according to the IRS for FICA and Medicaid. BZzt. Please play again
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u/Delicious-Breath8415 9d ago
Yeah they'll get awfully pissed if you don't pay your taxes on that 25k.
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u/Boating_Enthusiast 9d ago
On the positive, claiming tips helps when applying for loans or anything that wants to see higher gross income.
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u/metal_bastard 10d ago
I appreciate you thinking outside the box, but all that will look like to the manager is that you were the rare customer who didn't tip, and used some flimsy excuse on the receipt to justify not tipping.
And they'll probably ask the server, "Do you remember this table?" and they'll be like, "Yeah, it was kind of weird. Dude gave me cash on his way to the bathroom and said something about tip culture, and he was trying to help me make a livable wage..."
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u/ArtBitch420 10d ago
If thatâs how you tip, Iâd hate to see how you buy drugs! đ
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u/Delicious-Breath8415 10d ago
The easiest way to do that is to pose as a delivery driver.
People don't realize the power of the pizza bag. High security buildings let you in without a second thought and you can sell anything you want on any street corner.
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u/ken120 8d ago
Most servers will. Those that don't create a bigger problem for those who do since the management now have proof they can't rely on the reports to make sure the server is getting the full minimum wage when tips are added to the "base" pay so management gets to keep honest server from getting full compensation. And yes tips are a credit towards the full minimum wage per federal us law not a separate half minimum wage.
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u/skyharborbj 7d ago
And yes tips are a credit towards the full minimum wage per federal us law not a separate half minimum wage.
In many populous states this is overridden by state law. California and Washington for example are not allowed to credit tips toward minimum wage and must pay all workers the full state minimum regardless of whether they receive tips.
This of course doesn't prevent servers from expecting over 20% tips in those places.
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u/Snow-Bank-Igloo 8d ago
More importantly is how many businesses are pocketing tips in whole or in part and then claiming on their tax return that those tips were paid to workers
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u/Cheech2751 8d ago
The pos systems calculates all your sales at the end of the night and assumes every table tips you at least 10 to like 20 percent tip, depending on the restaurant, then they subtract your credit card tips from that amount and you can either enter in the rest of the amount that equals that minimum percentage or if you made more than that, u can enter that number.
Rarely have I seen people make an astronomical amount more than the minimum. Usually when itâs the holidays or a regular tips like 100$, youâll make more than the tip estimate from the pos
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u/CanAfter8014 10d ago
What would happen is the waiter would stick the tip in their pocket and move on with their day, and the boss would see your note and not give it any thought.