rogerkambah, Quickstatus, Boca68 (RE: Tax)
Yes - by the letter of the law all tips should be declared as income (and therefore be taxed). In practice I am sure there are plenty "turning a blind eye" for cash tips. In the age of credit card tips, these are harder to hide these from the tax man.
During the end of the dinosaur era:
- When I worked in a cafe we had a tip jar near the cash register. The cafe owner used the tip jar to balance the til. None of the employees ever saw any of the tips. This was back in less prosperous economic times, and tips were fairly rare, so I doubt the owner was skimming any meaningful amount off the top.
- When I worked in a nightclub everyone kept their own tips from every transaction. We were a cash only venue (quite rare these days, but very common at the time). In the first hour you didn't make a cent. As the night wore on patrons would pay using a banknote, but not want any coins for change. This meant as a bartender you could wear a pair of jeans full of coins by the end of a shift. On a good night it wasn't uncommon to bring home ~$30-50 in shrapnel per shift. The irony of this system is that sometimes the bar manager got paid less than the bartenders.
I actually was discussing this, and other hospitality matters with the owner of a restaurant while waiting for
QF WP to join me for a drink on Thursday afternoon. At this restaurant tips are put in a central tip jar and shared among employees per shift, and then paid weekly in arrears. Each employee gets an envelope of cash based on a spreadsheet of the shifts they worked and the tips collected. This means employees who work a function aren't advantaged or disadvantaged based on whether the function leaves a tip. e.g. Corporate functions never tip (how do you explain that to the accountants), while some birthday parties or engagement parties can leave generous tips ($100+).