Talk of The Villages Florida - Ruling on Restaurant Service Charges

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- - Ruling on Restaurant Service Charges (https://www.talkofthevillages.com/forums/restaurant-discussions-90/ruling-restaurant-service-charges-330397/)

Quote:

Originally Posted by Number 10 GI (Post 2117939)

There is a lot of difference between gross revenue and net profit. All kinds of businesses fail because there is no net profit after business expenses are taken from the gross revenue. Credit card fees are just one of those expenses.

I guess restaurants can charge a fee to use a credit card, if they want. But, if they stop accepting credit cards, they will lose a lot of business and profit. McDonald's found that their average transaction amount increased by about 50 percent when they started accepting credit cards. As a prior business owner, I never charged customers a fee to use a credit card.

Quote:

Originally Posted by pauld315 (Post 2117879)

Everybody mourns the poor restaurant worker. Here are a couple examples of great severs and bartenders I have spoken to about this. A waiter I knew told me that he makes 40 to 50 dollars per hour every hour that he works. A lot of that is cash so I doubt it ever makes it to his 1040. A great bartender I know just told me he is extremely busy and makes about 100 dollars per hour in tips. How do you think these 2 would react if they were told they were now going to make 15 an hour but they would no longer get any tips ?

Out of that tip money they have to pay the same taxes everyone else pays. My granddaughter worked as a server while in college and she did make good money on tips, but nothing like the amounts cited above. The government has enacted laws that makes it difficult for a server to claim less money in tips than actually received. There is some wiggle room to cheat but not that much. I've never heard of a restaurant providing health care coverage for servers, so out of the tips received they must also pay for medical insurance which isn't cheap. I've known quite a few people who have worked as servers and they struggle to keep up with living expenses.

Quote:

Originally Posted by Number 10 GI (Post 2117984)

The IRS has an 8 percent rule for restaurant tip income. The restaurant totals up their gross income and multiplies it by 0.08. Then, they issue W-2 income forms in that total amount to the tipped employees, pro-rated by the number of hours they worked during year. The employee who receives the W-2 form has two choices. They can pay income tax on the amount shown on the W-2, or they can claim to the IRS that they made a different (lower) amount and be prepared to prove that lower amount in an audit. So, if a restaurant server makes an average of 16 percent in tips, they will only need to pay income tax on half of their tip income. It is an IRS rule and not considered cheating.

Quote:

Originally Posted by Sparky365 (Post 2074505)

They are adding gratuity to our total at the Poke in Brownwood. You won't notice it unless you ask for your receipt. I don't have a problem tipping as long as I know I am doing it.

Island Fin Poke definitely does not charge gratuity. I looked today. There is a choice for tip, signature and then continue button just like Too Jays and many other restaurants.
If you would like to leave these wonderful workers cash, there is an option to leave no tip on the credit card charge and ten tip in cash.
Wonderful DOLE WHIP as well as lunch and dinner options.