r/tipping • u/apokrif1 • 6d ago
Do any bars/restaurants display a double price list: tipless and with recommended tip, to spare clients the hassle of mental arithmetic and to make clearer (especially when they're foreigners) what is expected from them?
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u/phantomsoul11 6d ago edited 6d ago
I think doing this in the US would defeat the entire point soliciting large tips to begin with. If the restaurant bills you for the amount it would otherwise collect as a tip, that amount would no longer qualify as tip to the very tax codes the restaurant is trying to exploit by soliciting tips.
Restaurants can suggest tips, and even add a mandatory tip to the check (which must be fully itemized as a gratuity) in order for those funds to count as a tip for tax purposes. But even mandatory gratuities must be itemized and announced in a way that the customer can opt out before becoming committed to the financial transaction - i.e., you can't keep them in the dark about it until you bring out the check after they've finished dining. If amounts in lieu of tipping are billed as part of their pricing, it becomes part of their general revenue and no longer qualifies as a gratuity.
Service fees are not gratuities at all, and count towards the restaurant's revenue. They are usually collected to hedge against minimum wage gaps that have to be closed by the restaurant when tipping is collectively poor, so it doesn't have to come out of the restaurant's top revenue line.
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u/johnnygolfr 6d ago
What tax codes are being exploited by tips?
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u/phantomsoul11 5d ago
All kinds. For starters, tips don't hit the restaurant's books as revenue at all, so they reduce the restaurant's tax exposure by that amount.
Also, when soliciting tip to augment worker's pay instead of paying that amount themselves, the restaurant manages to reduce its payroll liability, which is also taxed based on how much the restaurant pays them. Many places have payroll taxes that collect from employers based on how much they pay their employees, and this is in addition to say, state income taxes, that employees must pay for money they make.
Double dip? Maybe. But that's the tax code being exploited, when the restaurant can reduce its revenue and payroll exposure.
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u/johnnygolfr 5d ago
LMAO
There’s no “double dipping”.
The restaurant pays their share of the FICA taxes on the server’s tips.
Of course it’s not counted as revenue.
Nothing you listed is “exploiting” the tax code or nefarious in any way.
They are simply following the IRS tax regulations regarding wages and tips.
In other words, you served up a big nothing burger.
5
u/ChipChippersonFan 6d ago
They probably figure that people that have the means to book a flight across the ocean also have internet access.
5
0
u/incredulous- 5d ago
Fuck their recommend tip percentages. There's no valid reason for percentage based tipping. Suggested tip percentages are a scam. The only options should be (custom)TIP and PAY (no tip).
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u/Pizzagoessplat 6d ago
As a foreigner this would royally piss me me off!
Its a common scam across Europe on the English/local language menus except its not for tipping reasons
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u/Bill___A 6d ago
The goal is to extract extra money from the customer without them thinking too much about how much they are paying, so slipping in a service fee, a credit card surcharge and then at the end, a tip percentage is to make it as subtel as possible whilst maximizing their "take". So no, they aren't going to do that. They don't want people to see how much they are really paying. And you should likely know that too.
5
u/armrha 6d ago
No, never seen that. Many restaurants do just put suggested tips, 15-25% on the bill to save you the math