Quote:
Originally Posted by blueash
The 18% figure is inaccurate. Here is the direct rule from the IRS tax regulation for 2014:
How were your allocated tips figured. The tips allocated
to you are your share of an amount figured by subtracting
the reported tips of all employees from 8% (or an
approved lower rate) of food and drink sales (other than
carryout sales and sales with a service charge of 10% or
more). Your share of that amount was figured using either
a method provided by an employer-employee agreement
or a method provided by IRS regulations based on employees'
sales or hours worked. http://www.irs.gov/pub/irs-pdf/p531.pdfi
As long as a servers are reported to receive 8% of sales the IRS gives the establishment a pass. Clearly this invites fraud as it is very unlikely any establishment has such a poor tip rate. |
I know that Darden restaurants take a minimum of 18%. If the tip on the credit card is more than 18%, the total amount is declared on taxes. If under, then the restaurant assumes some of the tip is left in cash and 18% is deducted. This seems to be the standard for most restaurants and why I always leave the tip in cash.