Re: Last night was "surf and coop."

On 3/8/2025 7:08 PM, Dave Smith wrote:

On 2025-03-08 6:49 p.m., Jill McQuown wrote:

On 3/8/2025 5:33 PM, Cindy Hamilton wrote:

 

The customers pay the employees either way.
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That's true.  But in states like SC where the minimum *server* wage is still a ridiculous $2.13/hour, it's kind of silly to have to depend upon the kindness of strangers to make up the difference between that and the Federal minimum wage of $7.25/hour.  (Technically the employer is supposed to make up the difference.)  Counting on the customer to leave more than a 50 cent tip on a $40 meal doesn't cut it.
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My manager and his wife eat out a LOT.  He had no idea $2.13 is the base server wage in this state.  And oh, it doesn't matter if you tip in cash or put it on your credit card because server income is reported based on sales rung at the register.  Handing them a tip in cash makes no difference whatsoever in what gets reported as taxable income to the IRS.  They assume you're earning at least the Federal minimum.

 I don't know exactly how the IRS does it  but up here is the CRA and my understanding is that they have some sort of formula to estimate the tip income that would be expected for a server.  My son was waiter in bar for a while and later managed bars. At one time one of his cousins worked for him and the  guy was making a lot in tips and apparently not declaring them all. He got audited and ended up owing thousands of dollars in income tax.  This nephew had worked part time as a waiter while studying restaurant and hotel management at university.  After graduation he kept waiting tables for years because he was making so much more than he could have as a manager.
 

It's been a very long time since I worked as a server.  I remember the days when tips were not reported as income.  Then someone at the IRS woke up and said hey, wait a minute! what about all that money people keep handing them?  We need to find a way to tax it!  So they decided not to rely on servers reporting what they earned.  So they calculate a percentage based on each server's sales rung up at the register.  Even if you don't make diddly squat in tips, a percentage gets reported to the IRS as taxable income.
Jill