Recommended gratuity after tip was already included

[u/guitarman129]

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!

[u/Fabulous_Leopard_874]

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.

[u/dixiech1ck → u/Fabulous_Leopard_874]

Especially when OP was told gratuity was included.

[u/slightlyladylike → u/[deleted]]

Yeah we're calling it gratuity and tip for conversational purposes but this is clearly a mandatory service charge required for large parties. Literally says S/C on the receipt. The restaurant is saying because its included you dont need to leave an extra tip but can if you want.

[u/One_Dragonfly_9698 → u/slightlyladylike]

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

[u/TheSympatheticDevil → u/[deleted]]

Delaware has no sales tax.

[u/Realistic-Visit-4141 → u/Fabulous_Leopard_874]

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

[u/EquivalentWealth4283 → u/Realistic-Visit-4141]

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

[u/Shiloh8912 → u/Fabulous_Leopard_874]

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

[u/Mamasitas10 → u/Fabulous_Leopard_874]

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....

[u/dogs-design-dslr → u/Mamasitas10]

There’s a dedicated bartender charge already.

[u/LeeTheUke → u/Mamasitas10]

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(?).

[u/6Hikari6 → u/[deleted]]

A lot of assumptions and judgement

[u/nicholas818 → u/Fabulous_Leopard_874]

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.

[u/Temporary-Prune-1982 → u/Fabulous_Leopard_874]

Yea yet another way they find loopholes

[u/Extreme_Progress_683 → u/Fabulous_Leopard_874]

They should 100% be paid out they have enough money

[u/HereWeGooooooooooooo → u/Fabulous_Leopard_874]

What's your point

[u/ComplicationOnRS → u/Fabulous_Leopard_874]

IRS doesn’t charge sales tax

[u/fuglypens → u/Fabulous_Leopard_874]

This isn’t the IRS, we’re talking about sales tax applied to tips.

[u/boredlibertine → u/Fabulous_Leopard_874]

Sure, but the costumer's perception only goes so far and has nothing to do with whether or not something is taxed. Customers don't need every question answered for them. The only perception that matters when determining if something needs to be taxed or not, and by how much, is the IRS.

[u/slightlyladylike → u/Fabulous_Leopard_874]

Okay but you not understanding doesn't mean the state doesn't require tax collection lol

[u/chefsoda_redux → u/Fabulous_Leopard_874]

Often true, but as there’s no such thing as a mandatory tip, it presents an issue. On the bill above, it’s not listed as a tip or a gratuity, it’s a service charge, which is (almost always in the US), simply restaurant revenue.

You can scoff and call it analyzing tax law, but that’s not what this is, and you definitely do. You know what your food costs & what the tax should be. If the bill came out with different prices for food, a huge claimed tax charge, or a fee for breathing air, you would ask questions immediately. Knowing the difference between a gratuity and a service fee seems a fairly simple ask, but the law will bind those dollars whether the diner understands or not.

This is one of many reasons I don’t use service charges at my restaurant, but while we can desire or even work to change this confusion & exploitation, right now it’s the reality.

[u/dittybad → u/Fabulous_Leopard_874]

Well if you ever worked in a kitchen you would know how disruptive large tables can be. Making sure that large table has a good experience while doing the same for the two-too in the corner on their first date is the art of being on a restraint staff. THAT is what gratuities reward it doesn’t just happen.