Restaurant taxing on tips on paychecks?

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kasumi87

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I'm new to the restaurant industry and I'm really confused with the whole taxing on tips on my paycheck. Please let me know if this is right.
I was deducted $84 for tips on my last paycheck (two week pay period.)
$84 is the amount of 8% of my total sales I made in the past two weeks... which is about right because I made about $80 in tips.

If I made $84 in tips, why does the restaurant deduct the $84 out of my paycheck? Isn’t the $84 supposed to be an additional income for me and I get taxed on the $84 – not all of it??
 
Hmm. that is weird. They take out taxes based on your base income as well as tips, but they shouldn't take out all of your tips. I find it hard to believe you only made 80 dollars in 2 weeks though, so maybe that was your tax.
 
Your employer adds your reported tips (or the allocated tips if subject to allocation rules and you have not reported them) to your hourly wage before calculating the tax. Tip income is fully taxable. Then they subtract them back out before cutting your check because you have already received the money.

Many years ago I worked at a place that required us to turn in our tips at the end of each shift. They were then returned to us after taxes were deducted by the employer. Holding out was grounds for immediate termination.
 
The 8% was a number based on the McWorther's case. It was a way of coming up with the tips that are not reported by the waitress. I twas based on the average tables the waitress served, the average bill of fare for each table which is based on the average people you will have and the time you are a waitress. That is why I always like to give my tips in cash and the remainder cost of food is on my credit card.
The employer separates the tips because the employer doesn't have to match or as matter of fact doesn't pay its portion of FICA and Medicare. The waitress will have to pay 1/2 of the FICA on the form 4137 and listed on the back of your1040 under other taxes
 
"Imputed tips." IRS requires withholding on tips, so they add imputed tips (8% of gross sales) to your pay in order to calculate the taxes, deduct the withholding and other deductions, and deduct the imputed tips. They don't pay you the tips; you already got those directly from customers. To calculate withholding properly, however, they have to do the mechanical addition, then back it out again. They are just showing you and the IRS the basis for calculating the taxes & deductions.
 
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