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Forced Tipouts and Fees Georgia

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  • Forced Tipouts and Fees Georgia

    I am forced to tip out the bus boys 3.5% of my net sales and 1.5% to the bartenders. I am also charged fees when a credit card is used by a customer. Are there laws governing tipped employees being forced to tip out other employees? Theoretically if I make make 20% tips during a shift I have to tip out 25% of it. Why do I have to pay the taxes on that 25%? Are these tip outs tax deductible etc?

  • #2
    http://www.dol.gov/esa/regs/compliance/whd/whdfs15.pdf

    This should answer most of your questions. However, you can only be "taxed" on tips you actually report (short of year-end tip allocation, but that's not worth going through now), which are what you actually are left with after you throw into the tip pool. Notice that the tip pool may be required in "reasonable and customary" percentages/amounts. Are you required to throw in 5% of your sales or 5% of your tips? The latter is likely reasonable; the former may not be, especially if you are not in a high-end establishment where tips average 15-20% or more.

    And are you sure you're making the full minimum wage? If you are making the sub-minimum wage allowed in your state for tipped employees AND you're having to tip out more than you get in tips on a regular basis, it's very possible you aren't.
    Last edited by Pattymd; 02-12-2008, 02:55 AM.
    I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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