Posted on 02/19/2024 7:34:39 AM PST by Candor7
The dark cloud of a good deed hangs over a Michigan restaurant, because days after it made the news over a massive tip left by a customer, the server who received the tip was fired.
The saga began on Feb. 5, when a man had $32.43 worth of breakfast at the Mason Jar Café in Benton Harbor, Michigan. He left a $10,000 tip, according to the Detroit Free Press.
(Excerpt) Read more at westernjournal.com ...
I never tip on a credit card. I tip in cash. I always give the person the cash, not left on the table. I don’t care if they pocket it or put in a tip jar.
In the old days, the cook was usually the owner and the wait staff low paid. Today, with high minimum wage I question the entire reason for tipping in the first place.
I no longer eat out at 14 USD for a burger, fries and soda. Thus, high wages have forced me out of this situation the past two years.
Thanks DNC.
Does the employer have to pay their 7.65% of social security and medicare on tips? Add that to about 3% credit card fees and this $10000 tip could cost the restaurant over $1000.
Then there’s the fact that it was a $10,000 transaction...aka...the look see point for laundering. Hmmm...Is tipper IRS agent??
The employer does have to pay SS and Medicare on reported tips.
“There’s a good chance management had due cause to can her.”
Super duper easy to clear up. Just state reason she was fired and stop hiding behind the old we can’t comment on it because of “law” BS.
She was probably making around $50 a day in tips. That day she got 200 days worth of tips. Then she told the manager she wasn’t going to fold napkins, top off the salt shakers.
Why would a business have to pay the taxes on a tip?
No good deed goes unpunished.
I can only think that the state passed a law to ensure it gets its share of the tax revenue from tips and left it to the restaurants to either absorb or collect from the waitstaff.
Basically, in my view, it’s a way to put pressure on restaurants to stop collecting tips and pay the slightly higher wage, that can be taxed by the state, instead.
Employers are required to retain employee tip reports. Employers are also required to withhold taxes (including income taxes and the employee's share of social security tax and Medicare tax) based upon wages and tip income received by the employee and to deposit this tax. In addition, employers are required to pay the employer share of social security and Medicare taxes based on the total wages paid to tipped employees as well as the reported tip income.
Tip generously (but not outrageously) with cash and make sure the waiter/waitress gets it in hand. IMO
They are not paying income tax, that would come out of the tip as does her half of FICA.
However what you see coming out of your check to FICA is only half the story, the employer pays the other half. So the employer has to pay $620 for SS and $145 for FICA and $300 for the CC transaction.
That is a big chuck of money for a small business to have to fork out when they got none of the money.
What did he get “on the side”?
“ Why would a business have to pay the taxes on a tip?”
So Ukraine can be funded and millions of illegals housed and fed.
Exactly, I always use cash for my tips up to $50,000. Above that I ask for the wiring instructions for the server’s bank account. If I am tipping over a $1 million, I will usually run a few background checks on the server and have them sign a few non-disclosure papers.
If the employer forgot to withhold taxes, or credit card fees, it seems like the remedy would not be to fire the waitress, but to keep her on and deduct the charges from her future earnings.
“So why does the business pay the tax?”
Michigan employment laws. They can be different in every state. And with this tip size, if she shared it enough she could get by without tax payment. But the business has not share possibility so they pay taxes on the amount earned. Just the law in a tip environment job in Michigan.
And inferring the firing of the employee for that reason without proof is a false accusation. And since the employees have been threaened and the business defrauded by people as business has been driven away, they could be sued for liable or slander. And if they are doing harm to someone for a non-proven accusation, they deserve it.
wy69
WHY would the restaurant have to pay the taxes and not the waitress?? Makes NO sense!
There always is...A most reasonable answer!
Good thinking. Although if I were to make a habit of eating in places where breakfast costs $32, it’s less likely that I would ever have ten grand to give away.
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