Auto Gratuity
January 8th, 2014 at 10:51:15 AM
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Wow, I just read that the auto-gratuity is no longer allowed by the IRS. I am surprised that I hadn't heard that it took effect January 1st.
Personally, I like it. The servers and restaurant industry are really going to hate it. They have said one of the hardest to be hit will be the Las Vegas nightclubs where tables average more than $1500 each. Most patrons will no longer be leaving a $270 tip for their three bottles of vodka.
Personally, I like it. The servers and restaurant industry are really going to hate it. They have said one of the hardest to be hit will be the Las Vegas nightclubs where tables average more than $1500 each. Most patrons will no longer be leaving a $270 tip for their three bottles of vodka.
At my age, a "Life In Prison" sentence is not much of a deterrent.
January 8th, 2014 at 11:22:19 AM
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Quote: DRichWow, I just read that the auto-gratuity is no longer allowed by the IRS. I am surprised that I hadn't heard that it took effect January 1st.
It's not that it's not allowed. It's that it's taxed differently (no longer taxed as a gratuity).
January 8th, 2014 at 11:23:41 AM
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Hmm. I paid an auto-gratuity on January 1st. I guess they didn't hear the news.
I tend to tip more than the auto-gratuity, so it actually cost the waitress, because I don't ever add extra tip to an auto-gratuity.
I tend to tip more than the auto-gratuity, so it actually cost the waitress, because I don't ever add extra tip to an auto-gratuity.
I heart Crystal Math.
January 8th, 2014 at 12:11:44 PM
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Quote: AxiomOfChoiceIt's not that it's not allowed. It's that it's taxed differently (no longer taxed as a gratuity).
They are no longer allowed to call it a gratuity. From what I have read most places that have kept it have changed it to a service charge. The servers hate it because it must be added to their paycheck and all applicable taxes will be taken out. Restaurants hate it because they must treat it as employee pay and pay payroll taxes on it.
Again, just from the few articles I have read, it sounds like most places will quit charging it. Most of the chain restaurants already have.
At my age, a "Life In Prison" sentence is not much of a deterrent.
January 8th, 2014 at 12:21:00 PM
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Quote: DRichThey are no longer allowed to call it a gratuity. From what I have read most places that have kept it have changed it to a service charge. The servers hate it because it must be added to their paycheck and all applicable taxes will be taken out. Restaurants hate it because they must treat it as employee pay and pay payroll taxes on it.
Again, just from the few articles I have read, it sounds like most places will quit charging it. Most of the chain restaurants already have.
Yeah, basically, they are just closing a loophole where people weren't paying taxes on the income. IMO it's the correct decision.
I'm pretty sure that restaurants can still call it whatever they want, though.
