How much would a US server or bartender take in tips per shift?

[WaltonOnNaze]

If they serve fifty drinks an hour that’s a dollar per drink on top of a small basic wage. That’s quite a high hourly rate isn’t it. Or am I missing something? Am going to US soon and trying to get head round tips

And do those people out of a job? Why? Anything you buy anywhere your 'paying someone's wages'

Do they have to pay income tax on their tips? Is it classified are earned income? It must be a nightmare to work out how much tax everyone should be paying each month if so.

US citizens are responsible for calculating and paying their own taxes yearly.

I think the question was whether they are meant to pay tax on tips not who is responsible for calculating it

I think the answer to that is that they are supposed to buy in practice as with all cash in hand type jobs in all countries, quite a few people will underreport their tips to reduce the tax they pay

Precisely. I just said it with less words and without implying that Americans are tax dodgers.

I learnt such a lot about tipping on my first visit to Las Vegas,when we wanted a Taxi to Freemont Street from the Strip it cost us $5 to the guy who hailed the cab from the back of Ceasers Palace then another $5/6 tip to the driver all added up over the week,last month we went again and bought a 5 day bus ticket and saved such a lot of money,best for drinks was the free drinks in the Casino's where a $1/2 tip to the server was gladly accepted those servers make a fortune during the night shift specially if one of their customers win a decent amount on the slot machines.

No, you didn't actually address the question of whether tips count as income just said that people have to do their taxes.

And I didn't imply all Americans are tax dodgers. It's inevitable in any country with cash in hand jobs that people will underreport.

The IRS requires hospitality staff to record their tips and to report them to their employer, who also keeps a record. If one server is claiming to have received just $50 in tips for a shift when all the other servers are reporting $150-$200, the employer therefore knows something’s up (either underreporting of tips, or doing a crap job) especially if it’s happening consistently. Employers could theoretically collude with their staff to keep quiet about underreporting tips, but if they were audited they’d be in a shit load of trouble, so generally don’t.

It very much depends on the place you work, it's such an inconsistent way of earning. I used to work in a couple of busy bars in South Florida in my early 20's, I made hundreds of dollars a shift, now I'm in my mid fifties I'd never get a job in the those places, so wouldn't earn anywhere near that, even though I'd work just as hard. It's a horribly unfair system.

Waiters and bartenders are supposed to claim their cash tips at the end of a shift (credit card tips are already recorded). Their nominal hourly wage is then used to pay income tax. A lot of the time a $0 pay check is then received at the end of a pay period (or a very small amount). at the end of the tax year if the hourly wage hasn’t covered what they owe in income tax, they will need to pay more. Often cash tips are underreported but most bars/restaurants will require them to claim a minimum % of their sales.

I tip what I feel the service deserves. If you look at the receipt in the restaurant you will see that it gives the sum owed for the services provided, it then gives the tax owed for those services, it then gives recommended tipping advice which included tipping on the tax? Get out of here!! I work out the tip myself and leave the cash on the table. The recommended tip size is typed on the receipt that serving staff didn't put it there, the management did! So this whole thing about tips is driven by management. As for paying 25% for waiting on a table when we are out as a family that is something else. If we were spread out as couples over 5 or 6 tables there would be more work involved so I don't understand the sudden jump in the recommended tip. Especially when I read that some of the staff in Disney can pick up over $3000 a week. The way that the exchange rate is for the £ to the $ right now this works out at about £3000 per week. I don't earn anywhere near that. I have to save up to go to Florida. I refuse to pay a 25% tip and I don't want to hear hardship stories from anybody on £3000 a week.

I think the question was whether they are meant to pay tax on tips not who is responsible for calculating it

Well both really I suppose.
If tips are paid in cash (who carries cash these days) it's all too easy to pocket them and keep schtum.
But if they are paid by card and then handed out by "the management" then I can see how they can be seen as part of your income - and would be difficult to hide.
I hadn't realised that Americans don't have PAYE.

In many countries, tips aren't taxable income at all, as they are seen more as gifts than earned income.

I suspect the extent of underreporting varies a lot by establishment - a big chain is likely to be very keen to be IRS compliant and have procedures and policies, a family run small place may not so much

The server is responsible for calculating the income tax owed on tips.

There are specific lines in your tax form for calculating your total tips and the tax you owe. There is documentation you can attach. You had better not try to hide income. The IRS knows what a server working a certain number of hours in a certain area could be expected to make.

Americans do have a PAYE system. It's not called PAYE. For normal employees, your federal and state income tax are withheld from your paycheck along with your social security/FICA percentage. For self employed or hybrid, you calculate your taxes and FICA contribution yourself and pay in increments. At the end of the calendar year, an employer will send each employee a W2 form detailing your total income, total, taxes and FICA contribution withheld, and you fill in your own taxes using the details from the W2. You might get a refund if you had too much withheld or if there were specific deductions.

I suspect the extent of underreporting varies a lot by establishment - a big chain is likely to be very keen to be IRS compliant and have procedures and policies, a family run small place may not so much

No, not really. Falling foul of the IRS is something to avoid. Laundering of money is something that occurs with mom and pop operations, so any establishment that accepts only cash is going to be scrutinised.

The establishment has nothing to do with the reporting of tips. It is the responsibility of the server to provide an accurate tax return.