Taxed when you tip at a restaurant?

Question

I am having the reception for my wedding and I was wondering if the restaurant is supposed to add the gratuity before or after the tax. It just seems a little funny to me to get taxed on the tip that i am leaving. Since you dine at a reataurant and are not taxed on the tip you leave on the table how do restaurants do this? it wouldnt be a big deal normally but its about a $200 difference in price?

Answer 1

I work in a restaurant that also has a banquet room which holds receptions, etc. Tip and tax are not included in the menu price, which states that on the menu.

I would say that the tip should go on after the tax. You pay tax on your food, not on the tip.

Make sure you tell them that. They are just trying to get some extra money from you, and like you said, that's about $200! We get taxed on our tips in our paycheck. So no, you don't pay taxes on your tip.

Stand firm!!

Answer 2

this is a great question.the place will always try to sneak this extra charge on your bill.they can always say they mis-calculated if you are smart enough to notice afterwards.(oops)nobody will call the cops........if they are smart they will add something to your package as a courtesy since it LOOKED like they messed up(and they dont want to get caught-as they do it frequently)plus they make so many other changes on your original contract after you sign it as the date gets closer...(head count-menu changes-etc)they POUNCE on your nervousness and emphasis on the other things.............they will roll you.they get paid on commision.

Answer 3

I believe it's after tax.

Answer 4

i am almost positive that the % grat is added at the end after the total, so after the tax has already been added.

Answer 5

The tip for a large group is usually 15-20% and some automatic included in price per dinner. Hope you didnt double tip---anyway congrads on the marriage-Bruce in Oregon

Answer 6

The amount of the gratuity is almost always a percentage of the amount before tax, although the gratuity itself is not taxed. If the bill is $200 before tax and the gratuity is 20%, then the gratuity is $40 extra after tax is applied, so you aren't getting taxed on the tip or tipping on the tax. Bear in mind your server IS getting taxed on the tips they make.