Tipping for big groups
 

What is the logic of those restaurants who impose a tip for groups over a certain size. As an example I often see an 18% tip will be added for groups of 6 or more.

Re: Tipping for big groups
 

Larger groups tip worse. They won't tip say $6 each and make $36, they'll leave a single tip of say $10.

Re: Tipping for big groups
 

Having recently gone out to dinner with a big group we found out that if the service charge (tip) is mandatory on the menu, then the service charge is levied on the food and drink and THEN the sales tax is levied on the total of the food/drink AND service charge.

So one pays more tax as well. This is because by law a mandatory service charge is deemed part of the bill as a whole and is supposedly reported to the IRS. Whereas an optional tip is not.

Re: Tipping for big groups
 

Logic? Nah.
Reasons:
A table of 20 could take up the space & time of 6 tables of 4 (and stay twice as long)
They could deter others from coming in.
They cause disruption to the routine.
They expect bulk discount (and may get it)
People will pay it,
I'l stop there as I can think of just as many counter arguments.:confused:

Re: Tipping for big groups
 

I suspect it is because there seems to always be one or two people in a large group who don't contribute their fair share of the bill including a tip. When the total tip ends up being very little, everybody then claims that they contributed the correct amount. This seems to occur more often when there are big differences in prices between the meals and drinks that people order (especially if the group is sharing bottles of wine).

Therefore the restaurant levies a specific percentage tip for groups and lets the group figure out how to make up any shortfall.

I know this happens since it happened to me for a bill of about $300 and I collected money and discovered that I received about $30 less than the total bill including tip.

Re: Tipping for big groups
 

Yeah but I only had a glass of water and a starter.

Re: Tipping for big groups
 

Is that like an appetizer?:blink:

Re: Tipping for big groups
 

Let me try to understand this.
I Should pay tax on any tip I give, it's just that it doesn't get reported, so they do not bother to ask for it?

The receivers of the tips should report the tip and pay tax, and I understand that they would be taxed at an assumed rate of tip even if they say they got none. So wouldn't the tax man know or assume that the tip was paid, and if so, why do they not come after the tax that the giver should have paid for non-mandatory tips, and in turn, why don't the establishments ask for the giver portion of tax on a tip; or is the amount given to the staff less the giver portion of tax?

I am not sure if any of that makes sense, I know what I am trying to ask. Maybe someone will understand.

Re: Tipping for big groups
 

Hi I'm not sure what you are trying to say, and I probably did not explain myself properly. This is what our group found when we did a search on mandatory tips.

We know that we paid sales tax on food/drink and the 18% service charge.

Mandatory Tips
Often, restaurants and bars will add a preset tip when serving a large group. The percentage that will be added as a tip is usually posted in the menu or advertising brochures. When this preset service charge or "mandatory tip" is added by the retailer to the customer's bill, it is subject to tax. These charges are part of the restaurant or bar's income and should be reported as taxable sales. Tax is due on these amounts even if tax was not charged to the customer. Mandatory tip charges are taxable whether or not the tips are paid to an employee.

Re: Tipping for big groups
 

I saw this on the guardian website today: http://m.guardiannews.com/commentisf...ess-needs-tips

Re: Tipping for big groups
 

That is not unlike UK. The included service charge is part of the revenue of the restaurant, and therefore taxable to the restaurant, and up to the business what they do with it. I worked for a company that distributed 40% of the after tax amount to staff, via payroll, so they also paid tax on it...

Re: Tipping for big groups
 

thanks, I think that answered my question.

Re: Tipping for big groups
 

I suspect that person thought he was a big spender and was treating everybody at the table for a total of $34.93 for a party of at leat 8 people ($4.36 per person for 8 people but even less if more than 8 people).

I suspect he was more embarrassed at the small amount per person that he paid than not including a tip.

Re: Tipping for big groups
 

It was probably you that didn't pay their way! I've seen it happen a couple of times - the bill payer is so engrossed with paying the bill that they forget their own share.

Re: Tipping for big groups
 

People will pay it sums it up. No reason why they should impose a mandatory tip over a certain number.

Re: Tipping for big groups
 

No, I've seen that happen many times where the person collecting has to ask everyone to come up with extra money. I always pay the shortage out of my pocket when I am collecting.

Usually it happens when people from work get together for lunch and sometimes some people just leave their money and leave before the bill comes.

Re: Tipping for big groups
 

Most likely is a split bill - him paying for himself and his wife, with the rest divvyed up between the other diners.

Re: Tipping for big groups
 

Yess I thought the thread was going to be in relation to the mingy pastor.

Re: Tipping for big groups
 

The tax should be on the amount of food and drink. Not on the amount after the service charge. I've been in the restaurant business for years and any place that I have worked always taxed the bill before the service charge. In the UK the service charge does not necessarily go to the server, it can go to the restaurant. My friend who worked as a server in Ireland said she never got the service charge. The restaurant kept it, That's totally unfair. There are several reasons that the gratuity is added to large groups. Large groups tend to require more work, Take up the tables longer than several small parties and more often than not someone shorts the tip if the tab is split. Wherever I have worked the service charge goes to the server not the restaurant. I've been in the restaurant business about 30 years now.

I do pay tax on my tips. almost all of my tips are on credit cards which go into my paycheck and get taxed at about 28%. The credit card companies also charge a fee and some restaurants taken that out of the servers/bartenders tips as well. When I was a server I would much rather wait on several small tables than one large group. There is usually some smart ass in the group that loves to give you a hard time or change their order after it's been placed as well.

Re: Tipping for big groups
 

All tips need to be reported to the IRS as income and have been for well over a decade.

Re: Tipping for big groups
 

Well over! I've had to fill out tip declarations for over 20 years now. Most of the places I've worked put them directly in your paycheck .

Re: Tipping for big groups
 

I've always wondered why the tip amount depends on the value of the food rather than the quantity.

Does the server really deserve an extra dollar because he/she brought the steak to the table rather than the burger?

Re: Tipping for big groups
 

Right?! And if you want a nice bottle of wine you have to pay them more tip because obviously it's more difficult to open a more expensive bottle of wine than a cheap one... :o

Re: Tipping for big groups
 

I read that article as well, $9 in a busy restaurant, no way.

Often a good waitress will be the highest paid member of staff.

Men generally will just split a large group ticket, women want it down to the cent. One of the issues is that they then 'forget' tax and tip.

Re: Tipping for big groups
 

Managed to double post, so I will add that it does not surprise me that the holier than thou lot stiffed the waitress.

Many people who pay with CC, tip in cash. All wait staff prefer cash for obvious reasons.

Re: Tipping for big groups
 

Long time ago my business CPA told us that his highest rate of audits was on businesses with cash receipts involving tipping, sole proprietors claiming excessive home office deductions, and small businesses with high travel claims. He also said that the most likely reason for a restaurant/coffee shop to fail an audit was on underdeclared tips, and that in those cases it was the establishment that got the brunt of it, and the employee just got a slap on the wrist. God knows how they determine whether a server has been pocketing cash tips i/o declaring them...

Re: Tipping for big groups
 

You're not wrong there....I posted this in a thread last year:

"I can remember sitting in a booth in a very quiet Logans Roadhouse on Hwy 6 in West Houston, 10 years ago, a couple of weeks after we'd arrived. It was late, and in the booth behind us, 2 of the waitstaff going off duty and counting and comparing their tips. We calculated that excluding their wages, they'd made a little over $80 an hour. And that was on a very quiet night. "

Re: Tipping for big groups
 

$80 an hour, that would be excellent.

I have done tipped worked and averaged 20% plus.

If the tip goes on the CC there is a record, if the tip is cash then it tends to be shall I say rounded down, still needs to look doable.

Re: Tipping for big groups
 

My youngest was only 18 months at the time, and I have to say a (brief) "why bother with college?" look passed between my wife and I!:D

Re: Tipping for big groups
 

$80 an hour? How many hours did they say they worked? That seems a bit extreme. I know many people put down working in the restaurant industry but I have managed to do quite well in it and I actually enjoy it.

Re: Tipping for big groups
 

There are plenty of college graduates washing dishes.

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Yup!Actually if you are a member of Local 6 which is a restaurant union in NYC you make $20 plus an hour as a dishwasher.

Re: Tipping for big groups
 

No wonder eating in NYC is so d@mned expensive! :frown:

Re: Tipping for big groups
 

It depends on what you consider expensive. I know of some very reasonable places . FYI most restaurant employees( myself included) get the minimum server/bartender wage which is $5.00 an hour.

Re: Tipping for big groups
 

This was late - about 10pm, and they were talking about having worked the dinner shift - I can't remember the specifics, but the $80 number stuck in my head. It wasn't even a classy place - regular steakhouse type place with $10 burgers and $12-15 steaks....can't imagine a table for 4 would come to much more than 60ish bucks....guess that means they were working 6-8 tables an hour (no idea if that sounds reasonable or not as never done it)or maybe the tips in Texas are like everything else here....BIGGER:D

Re: Tipping for big groups
 

It sounds to me like you need to get into the union! :unsure:

Re: Tipping for big groups
 

I used to be. You can't just join Local 6. You have to get a job in a restaurant or hotel that is a union shop. I was in the Union for nearly seven years and then I left that job. It was about 15 years ago and I wanted a changE. Unions have their good points and bad points.

Re: Tipping for big groups
 

This might depend on how each state's sales tax laws are written and apply to your state, or some states, but not all states.

Regards, JEff

Re: Tipping for big groups
 

I notice that in this thread the terms 'tip' and 'service charge' seem to be used interchangably, and I wonder if the two things are the same or different? Perhaps it depends on the establishment? And with respect to sales tax, I wonder if the state or local sales tax laws might make a distinction?

I notice that in the referenced article the receipt shows an 'automatic' 18% "tip", and then provides a place for "Adtl Tip". I don't know what Applebee's does with such tip money, and the writer did not say, but as a customer I would take it literally and assume that the staff is given the 18%, which isn't a bad tip. Was the service so good that an additional tip was deserved? If the 18% isn't given to the staff, the writer's complaint isn't with the customer, it's with the establishment.

Getting back to sales tax, it's clear from what's shown of the receipt that Applebee's bases the tip on the cost of the food + the sales tax. (And sales tax is on the food only, not food + tip.) I don't know about others but I tip based on the cost of the food alone. The article doesn't mention where in St Louis this Applebee's was, but sales tax varies around St Louis county from as low as ~7% to almost 10% in St Louis city. A 10% sales tax really jacks up the tip when it's included in the calculation.

Regards, JEff

Re: Tipping for big groups
 

I normally tip on the basis of whatever sales tax is charged on - ie food and drink. Our sales tax is normally 8.25 (may be 6.25) so the mathS is quite easy to just double the sales tax and thats your tip.