tipping with a credit card

breakingnews · 04-13-2005, 11:06 AM

Nothing really gets double-taxed in that instance. The restaurant will pay taxes on its bottom line (well, EBITDA = earnings before interest, tax, depreciation and amortization). That amount already accounts for general expenses, including payroll/wages. The money is handed over to employees before it's subject to any corporate taxes.

So, really, the whole sum of your $5 is taxed only once.

And of course post-tax tipping puts more money in the waiter's pocket since it's a higher amount. Just a matter of how much you want to leave and (again) whether the waitstaff declares it.

Edit: Of course, gross dollar transactions are subject to merchant transaction fees, if paid by credit card. I don't know if there are any tax implications there, but I doubt it.

04-13-2005, 11:06 AM	#11
breakingnews Q_Q Join Date: Oct 2003 Location: somewhere in between Posts: 995	Nothing really gets double-taxed in that instance. The restaurant will pay taxes on its bottom line (well, EBITDA = earnings before interest, tax, depreciation and amortization). That amount already accounts for general expenses, including payroll/wages. The money is handed over to employees before it's subject to any corporate taxes. So, really, the whole sum of your $5 is taxed only once. And of course post-tax tipping puts more money in the waiter's pocket since it's a higher amount. Just a matter of how much you want to leave and (again) whether the waitstaff declares it. Edit: Of course, gross dollar transactions are subject to merchant transaction fees, if paid by credit card. I don't know if there are any tax implications there, but I doubt it. __________________ Gone crazy, be back never. Last edited by breakingnews; 04-13-2005 at 11:22 AM.

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)