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waitress percentage of sales? Nevada

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  • waitress percentage of sales? Nevada

    Ok question, I live in northern nevada and am a hostess/cashier. I was informed by my boss that servers (waitresses) are taxed a percentage of there sales and it is taken from their paycheck every week. well they said it wasn't fair to tax them when hostess/cashiers have food sales (to go orders), so they are now taxing all hostess/cashiers as well. My question is, how do I know what our percentage is and figure it out to make sure they aren't over taxing me? Can someone please explain to me how this percentage of sales works, so I can figure it out. Thanks!

  • #2
    It depends on what you think the word "tax" means. The federal government thinks that it means FIT and FICA (as far as the employee is concerned) and tips are very much taxable under federal law (IRC). The state of Nevada considers all wages (including tips) to be subject to NV-SIT tax. There are also local juristictions with taxes. NV is not my state and I do not know if this is true in NV.

    On the other hand, maybe you are just using "tax" as a made up word that means whatever you want it to mean. One possibility is that you are talking about what the government would consider to be a "tip pool". If so, you need to read the following.
    http://www.dol.gov/whd/regs/compliance/whdfs15.htm

    Or you could be using the word "tax" to mean something all together different. More information about just what you are using the word "tax" to mean would be useful.
    Last edited by DAW; 05-21-2010, 11:03 AM.
    "Reality is that which, when you stop believing in it, doesn't go away".
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    • #3
      You can't have taxes withheld from wages you didn't receive (at least, as it relates to tips).

      So, for the hostess/cashiers: DO you "regularly and customarily" receive tips and are you allowed to keep them? If so, you must report them to the employer and they must be shown as taxable wages on your paycheck.

      For the waitstaff: Again, you must report all tips and the employer is required to withhold taxes on them, but ONLY those tips you actually receive.

      If either of the groups are being imputed with income relative to some "assumed" tips, that is not legal (at this point, which I'll get into briefly in a second). Directly tipped employees should also ALWAYS keep a daily tip diary, totalled weekly, to track their tips. How do you report your tips to the employer now?

      What the employer is probably trying to get around is the hassle of determining whether a "tip allocation" is required on any directly tipped employees' W-2 (in my restaurant payroll experience, cashiers and hostesses are not normally directly tipped).
      http://www.irs.gov/taxtopics/tc761.html
      Last edited by Pattymd; 05-21-2010, 11:11 AM.
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