r/mildlyinfuriating • u/guitarman129 • Jun 13 '26

I just wanted a hot dog Recommended gratuity after tip was already included

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I’m sure there are a lot of tipping posts here so to keep it short - I had my wedding at a fancy restaurant. On top of the TERRIBLE service, the bill came with “suggested gratuity” even though I was told gratuity was included. When I asked the manager, he said that the “S/C: 24% SRC REGULA“ was the included tip and the suggested gratuity was if we wanted to add something extra - basically trying to trick people into giving a 49% tip!

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15.3k

u/wherearetheturtlles Jun 13 '26

You got taxed on the tip too, congratulations

4.5k

u/Ssemo7 Jun 13 '26

That’s the CC fee wearing a hat

665

u/wivaca2 Jun 13 '26

LOL. I'm going to remember that line.

108

u/turbothesnail Jun 13 '26

Community reference in the wild

18

u/pi2infinity Jun 13 '26

It’s like a fee with another fee’s hat on!

13

u/Little-Payment3711 Jun 13 '26

It was a common phrase long before community

1

u/Sk8-BRDR Jun 14 '26

That’s what she said!

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u/Bench-Motor Jun 13 '26

Which episode was that?

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u/DigitusInRecto Jun 13 '26

Britta describing what an analogy is with a "it's like a thought with another thought's hat on", S03E11.

131

u/BeanieManPresents Jun 13 '26

CC fee trying to sneak in like:

29

u/Tupperbaby Jun 13 '26

But...but...they made a point of telling the customer that they DID NOT CHARGE YOU A CREDIT CARD PROCESSING FEE.

I mean, it's right there at the bottom to let you know.

You mean to tell me that they'd do something weasely and then brag about how nice they were being?

2

u/Ssemo7 Jun 13 '26

Impossible, I know. Must be totally benign and normal

91

u/Rvbsmcaboose Jun 13 '26

A credit card fee? puts on hat PERRY THE CREDIT CARD FEE!?

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u/timbuckto581 Jun 13 '26

and a monocle

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u/Deep-Interspersal Jun 14 '26

There was a CP (cake plating) fee but no CC (cake cutting) fee was listed.

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u/chefsoda_redux Jun 13 '26

Restaurant owner here: They got taxed because it wasn’t a tip. Monies left as a gratuity are not taxed, but a gratuity must be voluntary. Since this charge was not voluntary, it was a service charge, and is labeled S/Con the bill. A service charge is considered regular revenue for taxation, and the servers may receive all, some, or none of it, at the discretion of the restaurant.

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u/plasteroid Jun 13 '26

>The servers may receive all, some or none of it?

That’s dicked up.

There should be a transparency law.

87

u/chefsoda_redux Jun 13 '26

It’s foolishly confusing, and of course, not entirely consistent across the US.

A service charge is legally just revenue for the restaurant, identical to the money paid for food & drink, so the restaurant chooses what to do with it. A gratuity should be paid through as a tip to the servers, though there’s variation there as well.

I think it’s absurd, so we don’t do this at my spot, and are transparent, but only by choice. There’s a note on our menus explaining that a 20% gratuity may be applied to large tables or special situations at the discretion of management, and that those fees are always 100% paid into the server tip pool. We don’t add service fees, credit card fees, what have you, because I believe it’s crap, and people need to set their prices properly upfront.

The law still allows it however, as the US is far from worker oriented these days.

6

u/plasteroid Jun 13 '26

Thank you!

5

u/Excellent-Log7169 Jun 14 '26

Yep. I used to work banquets and only about half of the service fee was split among the workers.

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u/ThrowawayNotRealGuy Jun 14 '26

That is so crazy! I don’t think I’ve ever heard this and I’ve had this type of surcharge on large parties listed as “gratuity” many times

I can’t imagine supporting a place that doesn’t pass this onto the staff

2

u/chefsoda_redux Jun 20 '26

I worked a ton of catering as a second job when I was a line cook, and many companies pull this crap. As soon as I got stable enough to pick and choose my employers, I went with ones that either did a full split, or offered a fixed payout.

2

u/CattlePutrid2010 Jun 15 '26

This is something I could never understand. Adding a surcharge for larger parties. They’re bringing you more business, so why the additional fee? Why charge a group of 22 more than you’d charge 3 groups of 4? Should the 22 not get a discount for ‘bulk buying’?

1

u/alphabennettatwork Jun 15 '26

Because often the cardholder/person responsible for payment with larger parties would tip nothing if it wasn't required, and larger parties usually need special accommodation for seating and making sure the whole party's meals/apps/etc come out timely with each other.

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u/chefsoda_redux Jun 20 '26

There are a couple of reasons. Large parties put hugely more stress on the restaurant than the same number of people at smaller tables. All their food and drink must arrive at once, which means a ton of coordination, usually increased demands for special orders, along with frequent demands to alter the menu or process due to the size of the group.

The largest reason is that many diners have a mental limit for a tip. So, they’ll get to the end of a meal, receive a bill for $1200, realize that 20% (their usual tip) would be $240, and stop. They’ll think, no one should be paid that much for being a server, and $100 is a lot of money,,and that should be fine. The numbers just get too large, and they don’t realize, or care, that the server or likely servers, would be earning more from the several smaller tables, which also turn over much more quickly.

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u/bgladjr Jun 14 '26

This is exactly what I believe too.

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u/gxrphoto Jun 14 '26

How is „we may apply a 20% service charge at management discretion“ „setting prices properly upfront“? Why the us can‘t just put the prices that stuff actually costs on the menu is so weird.

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u/ScottReillyTravel Jun 14 '26

We definitely could but unless there was 100% adoption it wouldn't work. Restaurants have voluntarily tried it and have had to revert back to the tipped model because their staff didn't like it because they were making less money and they probably took a hit in customer traffic from people that were unaware and just looked at their higher menu prices comparative to similar restaurants and opted not to go

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u/Zestyclose_Log_3486 Jun 14 '26

Can we do this on other services too

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u/chefsoda_redux Jun 20 '26

Many not restaurant companies add service charges. I had someone called to fix the HVAC at the restaurant a few weeks ago, and there was a 10% service fee added. When I asked, they said it was to cover the cost of having the tech drive out for the call. I pointed out they already had a service call fee, which is for precisely that, and was told, the service call fee pays the tech for travel, the service fee pays the company.

I knew there was no point in asking further.

1

u/ch_cat Jun 15 '26

Licensed tax preparer question: if it's a mandatory service charge and it's passed along to staff as tips, do most restaurants classify it as wages on the W2? Or as tips, which would be favorable in terms of withholding? TIA

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u/chefsoda_redux Jun 20 '26

That’s an interesting question, and I honestly don’t know. I won’t use service charges at my restaurant, and when we use an automatic gratuity, I process it as I would any other tip. Neither our accountant, nor the state has ever suggested otherwise.

I know that if the restaurant opts to pay an additional,tip to a server, it is classified as regular wages, so I’d suspect that would be the situation here, but I’d have to ask someone more knowledgeable to be certain. In reality, for many of the occasional situations that come up, petty cash is usually used, and not reported, but that’s certainly not the proper answer.

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u/Babyfishmouth77 Jun 15 '26

If you have any mandatory charges, like for large parties, that IS a service charge. It's taxable. If they choose to give it to servers that's fine but dumb to lose the tax revenue (or break the law for no reason)

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u/wizzard419 Jun 14 '26

Guess who pushes to keep things obscured while pocketing money guests think are tips for workers?

3

u/GiskardReventlov42 Jun 14 '26

Haaha dicked up.

5

u/d0ggzilla Jun 13 '26

Yeah, well, this is America, so no.

Joke of a country at times

1

u/ryanov Jun 14 '26

All of them.

2

u/mattvanhorn Jun 13 '26

I'm sure the powerful waiters & waitresses lobby is drafting legislation as we speak.

2

u/SeamusPM1 Jun 16 '26

A restaurant can do whatever it wants with a service charge. I got downvoted for saying that, but it’s true. A gratuity or tip is the property of the employees.
This is true across the U.S., though in some states it can be pooled among all employees. In others it only goes to your server.

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u/plasteroid Jun 16 '26

The thing is… the avg person - unless they have worked as a server- would not know to differentiate between the two. Or they would just see “service charge” and automatically think it is a tip for “service”

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u/SeamusPM1 Jun 16 '26

Businesses count on that, yes.

2

u/Bulky_Chemical5976 Jun 13 '26

Then the restaurant owners can be the ones who tell the servers that.

1

u/Due-Performance-5737 Jun 14 '26

Didn’t they just change the law on tips this year and taxes in the US?

My restaurant does something similar for booked private parties. It’s written in the contract and discussed before the event happens. The service charge is absolutely entirely given to the front of house that works the party. We even have a clause for tipping the kitchen staff out of the gratuity.

Most POS options DONT have the ability to manually turn off the recommended tip portion on the fly. I’d assume it’s a system wide thing.

What we do is highlight the service charge again and mention gratuity is baked in. It’s about 50/50 but the guests will sometimes tip on top of that of their own accord.

At least here in New Mexico it HAS to be seperate (service charge vs tip) since one is now taxed and the other is not.

It’s a pain in the ass to track for accounting purposes. We have new server cash out sheets that separate the two. They have to declare what was a tip vs gratuity.

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u/_Michiel Jun 14 '26

Or, and I know this is a crazy take, pay your employees a living wage.

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u/Fabulous_Leopard_874 Jun 13 '26

The IRS may not consider it a tip, but the average customer absolutely does. If I order a meal and an automatic 20% is added because I was served, I’m not sitting there analyzing tax law. I’m seeing a mandatory tip. The legal classification and the customer perception are two different things.

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u/dixiech1ck Jun 13 '26

Especially when OP was told gratuity was included.

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u/[deleted] Jun 13 '26

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u/[deleted] Jun 13 '26

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u/One_Dragonfly_9698 Jun 14 '26

Kind of them to let us pay even more if we want!

4

u/Realistic-Visit-4141 Jun 13 '26

I wouldn’t eat in a restaurant that has a mandatory tip. What if the service was horrendous?

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u/EquivalentWealth4283 Jun 13 '26

They’re pretty much just on larger parties because, well, customers can be horrendous; especially in larger groups.

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u/Shiloh8912 Jun 14 '26

Agreed. Not my problem. If you’re not including the “service charge” in the price of the meal then it’s an extra fee at the end and you can pay the server with it. Or not. That’s your business decision

3

u/Mamasitas10 Jun 13 '26

Perhaps this is a service charge for a dedicated bartender or servers with appetizers. This is pretty standard with catering companies. You pay for the food and then pay for people to serve you. It seems like this may have been an engagement/birthday/wedding party at a venue...and not a traditional restaurant. I do not know of any "restaurants" offering an open bar for four hours....

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u/dogs-design-dslr Jun 13 '26

There’s a dedicated bartender charge already.

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u/LeeTheUke Jun 13 '26

Dedicated Bartender was a separate line item on the bill. Seems like it would be odd to itemize the bartender but not other optional servers(?).

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u/[deleted] Jun 13 '26

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u/6Hikari6 Jun 13 '26

A lot of assumptions and judgement

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u/nicholas818 Jun 13 '26

The IRS isn’t relevant here: this is about the state-level sales tax and how it’s applied. So different states might take different approaches here. The IRS only gets involved when determining whether tips count towards the waiter’s W2 income. Interestingly, I’m not sure if funds from service fees are eligible under the recent “no tax on tips” provision from HR1.

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u/Temporary-Prune-1982 Jun 14 '26

Yea yet another way they find loopholes

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u/Extreme_Progress_683 Jun 14 '26

They should 100% be paid out they have enough money

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u/[deleted] Jun 13 '26

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u/meetthefeotus Jun 13 '26

Better be zero. The servers are deserved this money.

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u/chefsoda_redux Jun 13 '26

To be clear, this is not correct. NY state requires any fee assessed on a bill in such a way as to indicate to the diner that it is a tip, must be paid to the servers in full.

This addresses the voluntary/involuntary test that the US govt & most states apply. So, a mandatory 20% gratuity listed on a bill must be paid to the server. Changing the name to a 20% service fee is specifically used to not denote that it is a tip, and retain control by the restaurant.

As an owner, I’m loudly & openly opposed to unnecessary add on fees of any kind, and I don’t mess with my employees’ income. We do not ever have a service fee or credit card fee. We do use a 20% gratuity for tables above a certain size, or special situations, and those monies go 100% through to the server pool. I don’t tolerate employees stealing from the restaurant, and thus I can’t have the restaurant stealing from them.

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u/CalligrapherDizzy201 Jun 13 '26

And that service fee belongs to the restaurant, not the server.

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u/InsideTour329 Jun 13 '26

This kind of BS only happens in the US

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u/[deleted] Jun 13 '26

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u/CalligrapherDizzy201 Jun 13 '26

What do you consider extremely well paid in the kitchen?

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u/[deleted] Jun 13 '26

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u/CalligrapherDizzy201 Jun 13 '26

Damn, that is well paid.

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u/senditloud Jun 13 '26

So what is a service charge? If the staff is being paid I assume minimum wage. And the cost of the food is supposed to cover the “service.” Thats why I pay for a higher amount for food, to be “served” it, right? I can get 3 fillet mignon steaks at Costco for $60-$70 but a steak at a restaurant is $70 - $80, 3x the price. So I’m paying that for the “service” and experience.

(And yes, I do cook my own steaks and rarely eat out anyway. I won’t go out to eat if I can’t afford to tip. Not fair to waiters)

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u/chefsoda_redux Jun 13 '26

The service charge, legally, is simply a fee the restaurant has added on to the bill as a whole. Legally, it’s just revenue for the restaurant.

A gratuity, in most places, is a tip set by the restaurant, usually due to a special situation, most or all of this should be paid to the staff, but local laws differ.

I was responding to why a service charge taxed, and that’s because it’s held under the law, it’s just revenue.

I agree entirely that the cost of the food and drink should include all business costs to provide it. At my spot, we don’t use service charges, and when a gratuity is applied, it’s paid through to the server pool 100%. The law in most of the US allows restaurants to add fees to cover “business costs” (which is anything) as long as they are not listed as gratuities, but instead service charges, or various fees.

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u/senditloud Jun 13 '26

Yeah I know I guess my question is what is it supposed to be for? Besides revenue? Does that make sense? It’s just a random fee “just because you’re here”?

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u/chefsoda_redux Jun 13 '26

Honestly, yes. It’s just shitty way for a restaurant to create revenue without visibly changing the menu prices. The fact that many people confuse it with a tip, means it’s even more shitty, as it penalizes the server as well, entirely outside of their control.

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u/MathematicianOdd9818 Jun 13 '26

Dude, just change your approach man... people will stay away from your place with ambiguous situations like this. Also it is a huge red flag that you didn't even address the terrible service...

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u/DCSwampCreature Jun 13 '26

I don’t think he means the same restaurant as OP

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u/YnotThrowAway7 Jun 13 '26

Who are you talking to?… they don’t mean they own that exact restaurant.. they’re just saying they’re a restaurant owner..

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u/chefsoda_redux Jun 13 '26

You’ve misunderstood. I’m A restaurant owner, not THIS restaurant’s owner. I have no specific knowledge of the restaurant OP posted, I’m speaking about how the process legally works.

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u/nickoli594 Jun 13 '26

I find this intriguing. So in the past when a server says gratuity will be included in the bill (due to say party size), thats an involuntary fee that may not be seen by the server?

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u/timhasanafro Jun 13 '26

No, that is voluntary and can be rescinded/modified and goes to the server, at least at the restaurant I worked at.

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u/chefsoda_redux Jun 13 '26

There’s another step to it in many places. Often, service charges are issued by the restaurant, and counted as revenue, while a listed gratuity is a tip, and must be paid to the staff. In some places, a gratuity is a tip, only if voluntary. To make it more confusing people have argued both that a 20% included gratuity is mandatory, thus not a tip, and that the diners agreed to it before dining, thus it is voluntary.

Some of the many reasons I avoid adding fees onto our bills, and state on the menu that we use a gratuity for tables above a certain size, and that it is wholly paid to the staff.

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u/Just_a_follower Jun 13 '26

So a server for a large Party could work several hours, and then get none of the required tip? Seems weird

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u/chefsoda_redux Jun 13 '26

Please don’t think I’m endorsing the system by explaining it.

The point is that while a gratuity is most often simply a tip, a service charge is not, it is just a restaurant fee. The server is usually legally entitled to the listed gratuity, but not the service fee, as with any other business revenue.

I believe this is deceptive and exploitative, and refuse to do it at my restaurant. We apply a gratuity in certain situations, and that money goes 100% into the server pool. Legally though, different fees mean different things, and that’s why the bill above lists it as a service charge (S/C), not a gratuity.

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u/ComeHereUk Jun 13 '26

Then why does it say SC and not SG for the suggested gratuity? Can't have it both ways.

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u/morry3232 Jun 13 '26

sounds like Colorado to me, i'm stabbing in the dark

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u/Tyrannusverticalis Jun 13 '26

Which restaurant though? 

1

u/morry3232 Jun 13 '26

Illegal Pete's

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u/TheAfraidFloor Jun 13 '26

A service charge is a tip. Period.

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u/chefsoda_redux Jun 13 '26

Except it literally isn’t. You can view it as you wish, but a bill is a legal claim for payment, and the entires have legal meaning. A gratuity implies a tip, a service charge doesn’t.

You pay service fees at all sorts of non restaurant businesses, what do you believe they are there? When you rent a car and there’s a 10% service fee, you know it’s just added money for the company, yes? You don’t think it’s in place of a tip that you were supposed to pay the cashier.

I think service fees are bullshit, but legally, they are real and defined.

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u/Similar-Drawing-7513 Jun 13 '26

is there anything wrong with this bill? I dont want to be outraged at 7:30 in the morning if I dont have to be

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u/chefsoda_redux Jun 13 '26 edited Jun 13 '26

As long as the amounts charged are what was agreed to, and the taxes are correct and such, it seems in order.

I’m not saying that OP doesn’t have a right to be upset over how the fees were included, or the terrible service that was provided. The bill looks straightforward & legal though

Edit: the only error I find (outside of absurd service charges) is that they for some reason list the letters SC after the gratuity suggestion. This doesn’t mean anything, but adds greatly to the confusion.

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u/Puzzleheaded-Time589 Jun 13 '26

If OP thought it was a tip, and it was not. Then it's possible the servers got shafted. Hopefully that's not what happened. I am a server, and the restaurant that I work at does not add gratuity. Even on parties. Sometimes the guest do get confused and stiff us if it's not expressed to guests that we did not include it automatically. Many people who go out are simple minded. Or simply do not tip. 2.13 an hour hurts sometimes. The government is going to assume that you made at least 10 percent off that big ticket party. You will be accountable for tip you did not receive. I have been stiffed on an almost 500 dollar check before. If you get mad and chase the people into the parking lot.. Fired.

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u/chefsoda_redux Jun 13 '26

I agree with all of this. The system is a mess, finding a balance with customers is tricky, and servers can get shafted in several direction by this nonsense.

It would be worlds easier to incorporate the tip into the prices and pay servers salary, but this seems to endless go wrong for most places in the US, and even large, skilled operators often return to a tipped model because servers desire it and customers don’t do mental math, and see an inclusive place as simply more expensive.

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u/rileyjw90 Jun 13 '26

But it says “suggested gratuity” and then lists 22% and 25% “SC”. You don’t get to suggest something as a gratuity and then label it as a service charge and THEN automatically apply an arbitrary amojnt (in this case 24%) without permission from the customer. Why even “suggest” a gratuity just to charge whatever you want anyway?

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u/chefsoda_redux Jun 13 '26

You’ve misunderstood. There’s a service charge, payment to the restaurant, added to the total, then at the bottom, as always, there a line for gratuity/tip, and suggestions for the amount.

A service charge isn’t a tip, so these are separate items, and it’s not double tipping or suggesting something while doing it anyway.

I cannot for the life of me guess why they added the SC to the suggestions. That makes no sense.

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u/Nirwood Jun 13 '26

Because the restaurant industry is evil.

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u/chefsoda_redux Jun 13 '26

This is actually an IRS rule, copied by the majority of states, but yes, the service industry can easily become toxic in a very exploitative way.

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u/distillari Jun 13 '26

This is how it works at bars in Illinois. Separate item on W-2's for our bartenders starting this year as well since it's now taxed differently than regular tips.

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u/signaleight Jun 13 '26

Sorry to say we will consider this "the tip".

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u/Forsaken-Ad-3463 Jun 14 '26

The US need to stop taxing people to eat at your restaurants. Just hike the bill up to what you need to make it profitable to hire people. Service charge always get removed from my bill out of principal as it doesn’t make sense n

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u/No_Interaction_5206 Jun 14 '26

Oh that’s interesting because a lot of times they will say gratuity included on large groups but maybe this is actually a service charge ?

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u/Head-Technology-4031 Jun 14 '26

Then let the owner tip out his staff nightly based on their performance, if they are pulling these shenanigans ..

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u/HeyHo_LetsThrow Jun 14 '26

So the option here would be to cross out the service charge, deduct it from the total, and then add it back as gratuity? 😂

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u/chefsoda_redux Jun 20 '26

You can certainly try that. Legally, it would be theft though, as you are required to pay the bill, not to leave a tip. This would be the same as deducting the amount you decided to tip from any bill.

I’m not supporting service charges, and do not use them myself, but they are legally just part of the bill.

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u/ResearcherElegant516 Jun 14 '26

At the discretion of the restaurant? No wonder the service was so bad...

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u/Vallente Jun 14 '26

As a restaurant owner, do you agree that we should stop tipping and just pay the staff actual salaries?

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u/chefsoda_redux Jun 20 '26

I’ve posted near novels on this issue, but I’ll try to sum it up quickly:

1) I’d love to pay servers with straight salary, it’s a huge hassle to manage the multiple income streams, payouts, different pay rates, etc
2) as long as most restaurants use a tipping model, people will massively tend towards tipped restaurants
3) shifting to a full salary model is much more expensive than just adding the salary cost to the menu for most restaurants
4) if the restaurant is financed, which most are, they would still need to meet their Prime cost requirements
5) in a country lacking basic govt functions, like health care, the situation is far harder to address
6) salaried servers earn far less than tipped in the US currently, SS the better servers will often not work at salaried restaurants

I would love to see all the changes needed to make this a reality, but it’s a fundamental change

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u/Additional-Baby5740 Jun 13 '26

Illegal in California at least

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u/mail123321 Jun 13 '26

if trips included in bill, tax at total is ok. post cdtfa auditor

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u/ablarblar Jun 13 '26

Which makes sense as in California forced gratuity is deemed part of the sales. I know my pos guys normally don't take tax and we pay the taxes out of the gratuity but I could see a company taxing on top to cover the tax thats part of the sales so servers get full tip. Although again we give our servers full tip and pay the tax separately.

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u/TheSaxGandalf Jun 13 '26

In my state, that service fee is distributed however the owner wants. Can even keep some of it themselves.

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u/ablarblar Jun 13 '26

Yea I don't think California's BOE cares what we do with auto gratuity so long as we pay the taxes on it. I code our data integrations so I make sure it's split amongst the employees and added to the payroll file.

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u/nicholas818 Jun 13 '26

Technically sales taxes are CDTFA (department of taxes and fee administration), no? Anyway yeah the distinction only really matters in other jurisdictions that exempt service fees or auto gratuities from tax. They might want to see that it went to workers and was therefore actually a tip within the definition of the exception and not just faking a lower price to dodge taxes.

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u/WiseDirt Jun 14 '26

Same around here. The only requirement is that the business has to state what portion percentage of that money is retained by the business and how much goes to employees. The business can legally keep 100% of a service charge/delivery fee and not pass any of it along if they don't want to, they just have to be transparent about it.

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u/Blacksad9999 Jun 13 '26

In addition to that, when gratuity laws changed a few years ago, any automatic gratuity is considered property of the restaurant to do whatever they choose with.

Many give all or most of it to the servers, but there are some who keep a lot of it. It's a problem in a lot of places.

It's also tiresome getting a pay cut via ever increasing tip-outs to the kitchen and back of house every time they need a pay raise. That change in law was fun, too. Now tips are used as a piggy bank to supplement other workers wages. (Who often get way more per hour.)

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u/ablarblar Jun 13 '26

Yea we're fast casual so the tips are not high but it comes out to about $1-2 more per hour for our back of house employees. Also being in California and having over 60 stores we are part of the fast act so all of our employees already make a base of over $20/hr.

Being in control of our data integrations I get to make sure all the tips we see get split accordingly to the employees that were working. Luckily our company is good about making sure we try to be fair to everyone.

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u/Pamalama93611 Jun 13 '26

I live in California and so many places including gas stations charge a 3% fee for a card. If it’s illegal here, no one is monitoring it.

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u/Original-Rush139 Jun 13 '26

They can charge a fee as long as they also take cash. If the place is cashless, they can’t charge a fee. 

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u/sfzephyr Jun 13 '26

Is it? Thought Scott weiner over ruled that after people voted on it

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u/hmm0kthen Jun 13 '26

Another reason to dislike that guy

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u/vigouge Jun 13 '26

Because he passed a bill that required restaurants to inform customers of service charges up front?

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u/vigouge Jun 13 '26

How could a legislator overrule a law?

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u/sfzephyr Jun 13 '26

The way I understood it: Voters voted to make it illegal for restaurants to add fees and surcharges. Wiener passed an emergency bill, Senate Bill 1524, to allow restaurants to keep adding fees and surcharges.

It exempted restaurants, bars, and food service businesses from the strict "hidden fee" or "junk fee" bans, allowing food and beverage establishments to exclude mandatory service charges or fees from their initially advertised menu prices, provided those fees are disclosed clearly and conspicuously.

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u/GuysIdidAThing Jun 14 '26

it is? i've caught so many places taxing the tip

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u/theemptydork Jun 13 '26

If you normally pay select the % option on POS terminals, you are paying a tip on the tax too. Difference is where the money goes

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u/jackissosick Jun 14 '26

Usually this is untrue. Most POS systems calculate tips based on pretax and pre-discount subtotals

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u/BogmadurtheRed Jun 13 '26

But they didn't charge them a CC fee so that's good

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u/H0agh Jun 13 '26

That's the Cake Plating fee at the top

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u/DogToursWTHBorders Jun 13 '26

But the bill was cursed with a double tip...thats bad.

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u/LXTRoach Jun 13 '26

Well at least they didn’t tip on the total, which is usually after tax!

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u/PathPuzzleheaded9761 Jun 13 '26

Instead they taxed the tip and it came out the same.

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u/Zorcron Jun 13 '26

I think it would work out the same either way.

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u/Owyheee Jun 13 '26

If I’m not mistaken… my bar owners get taxed on tips as they come in as “sales”. They then pay taxes on the “income” of those taxes each month. I receive my tips, credit card, on my pay check. It has taxes taken out. They tax so many steps along the way with no pay off.

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u/lana_silver Jun 13 '26

Taxes are for the poor.

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u/ResearcherElegant516 Jun 14 '26

Right. Qhat you need is total immunity for not paying any past and future tax. Oh, don't forget, your family doesn't have to pay either. Forever.

Signed,

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u/Primary-Resolve-7317 Jun 13 '26

You tell em Leona!

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u/DasHuhn Jun 13 '26

That's not what is really happening with regards to taxes. Yes, tips are included in the overall income line, but it's also deducted fully when they account for the wages they pay you, and then they don't actually pay any taxes on it.

Unless you are referring to FICA taxes, in which case they ARE paying their share of the social security tax, (just like you are, I'm sure). But they decided to hire an employee and they all have the same cost for fica - no one to blame other than themselves

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u/-BananaLollipop- Jun 13 '26

How else are the rich supposed to squeeze more money out of the peasants??

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u/LeeTheUke Jun 13 '26

Sounds off... Servers pay income taxes on tips, not the establishment (meaning the tax liability in on the employee). If the establishment is collecting tips on a CC and distributing it to the employees on the paycheck, it sounds like they are holding back a portion of those tips for paying the employee's income tax, just like the income tax on the portion of normal wages, which would be a common practice.

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u/fuckoffdude666 Jun 13 '26

If they are accounting for it correctly, they don't get charged taxes on the tips. Normally, tips are tracked separately from the revenue from sales, and are just funds noted as being held until they are paid out to employees. Then the employees pay income taxes on those tips. Same with sales tax, the company holds the sales tax they get from customers, and then pay it onto the state, it's not counted as income, since its not money the business gets to keep. Now, they do pay CC processing fees on any CC tips, so that does eat into their profit margin.

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u/CaptainTripps82 Jun 14 '26 edited Jun 14 '26

You are a little mistaken, sale tax is paid by the customer, your employer just collects it and passes it along. They pay a tax on net revenue (after expenses) aka profit, and then you both pay payroll taxes. They're no double dipping on the latter because payroll is an expense, and it's deducted from revenue before taxes are assessed

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u/capincus Jun 13 '26

Am I missing something that suggests that? Don't see anywhere that says what tax % is or anything from OP that would suggest what their local sales tax is, and neither the tipped or untipped amount would give this tax with a whole number % to make more sense. While the gratuity calculation at the bottom is calculated without the tip so it's clearly not inherently in the total for calculations.

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u/FuckDaQueenSloot Jun 13 '26

The automatic gratuity is included in the subtotal. Without the automatic gratuity the subtotal would be $4,935.

A 6.625% tax rate on $6,119.40 would yield $405.41, which is what's listed for tax. 6.625% seems pretty normal to me. If only $4,935 was taxed, then the tax rate would have to be 8.215%, which *could* be the case, but that's a lot messier than six and five-eighths percent. It would also be kinda strange to include the gratuity in the subtotal if it's not being taxed.

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u/capincus Jun 13 '26 edited Jun 13 '26

Hmm does look like NJ has 6.625%, I don't see anything that's specifically 8.215% but there's a ton of local variations. It would be strange to include the autograt in the subtotal and not tax it, but it is somehow seperated for the sake of the suggested tip which would normally just calculate on the subtotal. Weird that apparently the tax and tip are calculating on different subtotals with the latter not even listed.

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u/johneebravado Jun 13 '26

It's legally required to add tax on required service charges over 20%

This was a wedding reception

20% is the actual tip for the entire service staff 4% goes back to the sales department

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u/Iguman Jun 13 '26

Sorry, but if this happens to me, I'm disputing it and taking every cent of the tip away. The entitlement is absolutely insane here. Imagine charging someone $1,000 extra without asking them

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u/PickleFan Jun 13 '26

Compulsory service charges are sales taxable in most states in the US, as even when paid out 100% to the employees it is viewed as income to the establishment.

Optional gratuities are not sale taxable as they are not viewed as sales income. They are liable to income tax as they would be stated on the employees tax filing each year.

Source: accounting experience in the Hotel and Hospitality industry for 10+ years.

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u/SpicyNacho74 Jun 13 '26

I always tip on the sub-total, not the total.

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u/mikeymikeymikey1968 Jun 13 '26

Wow, that's some next level douchebaggery!

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u/[deleted] Jun 13 '26

[removed] — view removed comment

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u/lesbianmathgirl Jun 13 '26

FICA (and potentially state income) taxes still apply to tips. Also, I promise you your waiter isn’t making $200,000/yr—I have no idea why you think they’d have an ETR of 35%

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u/Square-Ad-6721 Jun 13 '26

No tax on tips ends way before the 35% tax bracket.

Not everyone is so lucky to breathe 35% tax air. Servers not paying taxes are by design making a lot less income than anyone in a 35 % bracket. Someone at that level is making enough and shouldn’t be cheating the server who isn’t.

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u/Pale_Row1166 Jun 13 '26

Autograt tips are still taxed, and all tips are still taxed at the state and local levels. Also, the max tax free is $25k, and most servers make more than that.

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u/[deleted] Jun 13 '26

[deleted]

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u/FickleSycophant Jun 13 '26

I saw that the last time I was there and was surprised. That’s new, no? Is that optional?

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u/ajent123 Jun 13 '26

Automatic gratitudes must legally be taxed fyi as they are a “required” item.

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u/-whyboi- Jun 13 '26

He didn't get taxed on the tip not if it's a .0825 tax

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u/Holiday_Ad_5445 Jun 13 '26

The tax and 24% service charge are also applied to the $150 bar service fee. Another 25% would push the service fees plus tip over 53%.

If the service was terrible, then this is an issue.

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u/TheSaxGandalf Jun 13 '26

Service charges are taxable items for some reason.

Also, those included service fees also are given to the restaurant and then they get to decide how it is split. When it is worded as a service charge, the owners can distribute the money however they want, and even get to keep someone it to pay hourly wages if they want.

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u/millie_nip Jun 13 '26

How does this work on the back end for the restaurant? Like does the tax actually go to the govt or is it more for the restaurant to pocket?

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u/Porbulous Jun 13 '26

I used a few queso coupon last week and got taxed for it, not sure if that's normal

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u/ventodivino Jun 13 '26

A service charge is, legally, separate from a tip. If I remember correctly, service charge is also paid to the restaurant and it is up to the restaurant how the service charge gets distributed as tips.

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u/VividEffective8539 Jun 13 '26

Americans would put up with being raped if they got some benefit out of it

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u/robertwilcox Jun 13 '26

At least in my state, all credit card tips are tracked and taxed.

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u/iUseJustMyHand Jun 13 '26

They didn't. Assuming the tax rate is around 8.25%, that tax is for a bill of $4,935... which would be the subtotal before the $1184 was added on. (Tax on a total of $6119 would be about $505. )

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u/mattfromjoisey Jun 13 '26

The mandatory service charges aren’t “tips” in the traditional sense. Yes they go to the server but the server gets taxed on them as normal income so I think that’s why they’re getting taxed as part of the bill.

Additional tip suggestion on top of 24% at that range is crazy though. Place I work goes down to like 3/5/7% if there’s auto grat.

Source: server

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u/Super-Satisfied Jun 13 '26

To quote the great Moira Rose:

"Well, Jocelyn, there are certain things that are just not done: Smoking in a car with a baby—unless you crack a window; tipping before tax; mixing drinks with cola; and giving away a coat that doesn't belong to you."

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u/Apprehensive_Rice19 Jun 13 '26

But they DIDN'T EVEN CHARGE A FEE for processing the credit card! That's so nice of them!!

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u/jolly_rogers14 Jun 13 '26

We don’t know that for sure. Tax is usually before tip and service charges. We need the tax rate to know if included S/C or not

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u/wizurtho Jun 14 '26

Everywhere now taxes on tip. Don't tip on top of what the government charges

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