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Required Tip Outs Oregon Oregon

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  • Required Tip Outs Oregon Oregon

    I work at a restaurant which requires servers to tip out 4% of our total sales (not 4% of our tips) every shift to our bussers, hosts and bartenders. I have no problem tipping out people when I am receiving help, but I am upset that they require me to tip out when I have no help (i.e. no bussers, hosts or bartender). When we clock out we are asked to claim our direct tips and our indirect tips. The indirect tips are the 4% we are required to tip out. Is this legal? Do I get taxed on the indirect tips? Is 4% of total sales a reasonable amount to require?

  • #2
    You must be taxed on all tips you receive, net of any tip-outs to a tip pool from those tips. You cannot be required to contribute to a tip pool out of non-tipped funds (such as the hourly rate you are paid).

    But haven't I seen this question before somewhere?
    I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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    • #3
      I understand that I must claim my tips that I take home, which would be called my direct tips when clocking out. However, can they make me claim the indirect tips which are the 4% of total sales that I am tipping out? I do not get to keep these tips, but am worried that I am getting taxed on them.

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      • #4
        You cannot be required to claim as "tips" that which you did not receive and take home after you have tipped out your share.

        You should keep a very detailed tip diary for a few weeks and see what the percentage of your actual received tips to the amount you are being "required" to tip out. The law states that you may be required to contribute to a tip pool in an amount/percentage of YOUR tips that is "reasonable and customary".

        This tip diary is also a good way of verifying that your income has not been overstated by comparing it to your pay stubs.
        Last edited by Pattymd; 02-17-2009, 02:44 PM.
        I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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        • #5
          The OP might also find the following of interest.

          http://www.irs.gov/publications/p531/index.html
          "Reality is that which, when you stop believing in it, doesn't go away".
          Philip K. **** (1928-1982)

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