roark
New member
Like so many of us, I've spent a lot of time in restaurants. It's been nearly a decade, but I've still done that more than my current industry. At some point I've held every role except head chef and owner.
A few points I think need to be added to the discussion:
The problem with the tip being a reward is that simply isn't how the IRS sees it. 2 examples below:
The server pretty much always is tipping the busboy, bartender, host, food runner, and often the back of the house (sous chef, dishwasher). One restaurant I worked at if you tipped the expected amounts meant I would walk with 40-45% of what I collected. Yet that same place would report that I received (net) 10% on my pre-tax receipts for income tax purposes... negative paychecks were not uncommon (meaning the tax on reported tips exceeded the net hourly wage). I stayed awhile because I was good enough to average about 25%, barely enough to offset the increased tax load. If I get less than 21% on a table I'm paying tax on money I'm not receiving... Some might think this would encourage only the best service - I would reply that morale loss and increased inventory shrinkage more than offset any benefit - bad business practice is just that. I feel similarly about charging employees for meals at the end of a shift: I understand there are tax implications but when there is so much thrown out so regularly it drains morale. It's just bad practice (and probably the industry norm by now...)
In addition many states allow the restaurant to pay a reduced hourly wage because that person is receiving tips, so that on average they're still just at min wage. I would hope the server still comes out a little ahead, but working at truck stop diner in AZ is probably even less lucrative than most of us think.
riv: $40/hr? That is an exceptional night, even in a higher end restaurant. I'm sure some NYC, or other elite places might get that, but that sort of take home would be a stellar exception rather than the rule. Sure I had a few $100/hr nights, I also had quite a few $8/hr ones... it probably averaged out to ~$15 for most of my time on the floor. But a shift is probably 5-6 hours, and benefits like health insurance and 401(k) are non-existent.
Total guess, but I would expect that less than 10% of all servers clear $30k, and less than 5% gross more than $40k.
A few points I think need to be added to the discussion:
The problem with the tip being a reward is that simply isn't how the IRS sees it. 2 examples below:
The server pretty much always is tipping the busboy, bartender, host, food runner, and often the back of the house (sous chef, dishwasher). One restaurant I worked at if you tipped the expected amounts meant I would walk with 40-45% of what I collected. Yet that same place would report that I received (net) 10% on my pre-tax receipts for income tax purposes... negative paychecks were not uncommon (meaning the tax on reported tips exceeded the net hourly wage). I stayed awhile because I was good enough to average about 25%, barely enough to offset the increased tax load. If I get less than 21% on a table I'm paying tax on money I'm not receiving... Some might think this would encourage only the best service - I would reply that morale loss and increased inventory shrinkage more than offset any benefit - bad business practice is just that. I feel similarly about charging employees for meals at the end of a shift: I understand there are tax implications but when there is so much thrown out so regularly it drains morale. It's just bad practice (and probably the industry norm by now...)
In addition many states allow the restaurant to pay a reduced hourly wage because that person is receiving tips, so that on average they're still just at min wage. I would hope the server still comes out a little ahead, but working at truck stop diner in AZ is probably even less lucrative than most of us think.
riv: $40/hr? That is an exceptional night, even in a higher end restaurant. I'm sure some NYC, or other elite places might get that, but that sort of take home would be a stellar exception rather than the rule. Sure I had a few $100/hr nights, I also had quite a few $8/hr ones... it probably averaged out to ~$15 for most of my time on the floor. But a shift is probably 5-6 hours, and benefits like health insurance and 401(k) are non-existent.
Total guess, but I would expect that less than 10% of all servers clear $30k, and less than 5% gross more than $40k.
I felt really guilty since the way the bartender mixed my Tangeray and Tonic was about 5 fingers worth of Tangeray to just over 2 fingers of tonic water! 
