Personal Finance

Ontario \$14 impact on your tipping?

• Last Updated:
• Oct 17th, 2018 10:32 pm
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+2
Mar 9, 2012
1805 posts
Kitchener
JRGUINNESS wrote:
Jan 7th, 2018 3:46 pm

As a server, come tax time the norm (depending on how your employer has recorded thing) to claim on what you made in tips over the year is 25-30%. That means servers are/have been getting 70-75% of their tips tax fee.

Math never lies so lets look at it this way:

\$51,000 - \$8,607 (tax) = \$42,393 Net

The average salaried person works 2,080 (40 hrs x 52) hours a year.

As of 2018, Servers make \$12.20/hr
12.20 x 2,080 = \$25,376 - \$2,828 (tax) = \$22,548 Net

In 2019, Server will make \$13.05/hr
13.05 x 2.080 = \$27,144 - \$3,183 (tax) = \$23,961 Net

A server will typically cashout a shift with between \$1000 - \$3000 in sales PER SHIFT

So lets take an average of a 15% tip on these sales and an average shift of about \$1500 in sales and a server gets an additional \$225 cash PER SHIFT
Therefore 5 shifts a week X the same 52 weeks = 260 days of tips

260 Shifts X \$225 Cash Tips = \$58,500 Cash Tips A Year.

Of this, only 30% (\$17,550) will be claimed and therefore taxed. The remainder will be taxfee.

This changes the tax rate:

As of 2018, Servers make \$12.20/hr
12.20 x 2,080 = \$25,376 + Claimed Tips (\$17,550) = \$42,926 - \$6,377 (tax) = \$36,549 (after Tax) + \$40,950 (untaxed Tips) = 77,497 Net

... still think its unfair and you should feel bad about not tipping?

Granted this is a PERFECT year, but even at 50% of that, a server would be at \$38,748.5
You have likely never worked in the industry. A VERY GOOD night might be \$200....typically it's not that good. If you get hit hard, service degrades and so do tips. If the place is slow, service is better but you have fewer tables.

Having been in this industry for 20-odd years (though not as a server), most ladies were getting about \$80-\$100 per FULL shift minus tip out of kitchen staff and door staff.

Also keep in mind, not everyone gets 5 8 hour shifts. That simply doesn't happen. You might have 1 or 2 girls at the top who get that.

Generally, the girls would earn \$250 per week in tips. Or \$12,500/year... (remember, these servers generally don't work 52 weeks a year, like most Canadians)

Finally, tip-outs are based on sales: So if the girl sales \$1,000 during her shift (which is more typical) usually a 3-5% tip out is charged on SALES (not sales + tips). If a girl ends up with a couple big tables, tips are very low (perhaps \$1). You end up with a few bad tables, (it happens), very little tips. While this does not happen every time...it does happen, and sometimes these girls are going home with no tips at all.

Of course, you do have some that give exception service and can serve more tables than average. I know one server that was clearing over \$70,000G a year, this was working on the busy nights (5PM to 2:45AM). Sh was pretty, wore "nice" clothing, friendly and efficient. Her total tips in the year were \$50,000 (\$20.50/hour in tips plus \$10/hr server wages (only paid for 8.5hr). She was the exception.

The numbers you're stating simply don't happen.

Something to think about when you don't tip.

As for taxes (or not); CRA has been clamping down on servers not claiming the entire tip that has been earned. So at least with my establishments that I was at, management recommended that all staff claim 100% of tips.
Well, I am not a crook.
Deal Fanatic
Mar 24, 2008
5561 posts
Toronto
jeff1970 wrote:
Jan 8th, 2018 3:50 pm
You have likely never worked in the industry. A VERY GOOD night might be \$200....typically it's not that good. If you get hit hard, service degrades and so do tips. If the place is slow, service is better but you have fewer tables.

Having been in this industry for 20-odd years (though not as a server), most ladies were getting about \$80-\$100 per FULL shift minus tip out of kitchen staff and door staff.

Also keep in mind, not everyone gets 5 8 hour shifts. That simply doesn't happen. You might have 1 or 2 girls at the top who get that.

Generally, the girls would earn \$250 per week in tips. Or \$12,500/year... (remember, these servers generally don't work 52 weeks a year, like most Canadians)
...
^ I think \$80-100 per shift + the minimum hourly wage is a fair amount for these jobs. How much more do you think servers should make? There is nothing specialized about these jobs. It someone can't makes ends meet, they should be looking for a better paying job vs. depending on tips.

In any case, it should not be their customer's responsibility to ensure that everyone in a restaurant makes a decent wage, it's the business owners. There is no tipping in Countries like Australia but the servers do OK. It's time to look at the business model being followed in Canada vs blaming these issues on low tipping.
Illegitimi non carborundum
Mar 9, 2012
1805 posts
Kitchener
ksgill wrote:
Jan 8th, 2018 4:33 pm
^ I think \$80-100 per shift + the minimum hourly wage is a fair amount for these jobs. How much more do you think servers should make? There is nothing specialized about these jobs. It someone can't makes ends meet, they should be looking for a better paying job vs. depending on tips.

In any case, it should not be their customer's responsibility to ensure that everyone in a restaurant makes a decent wage, it's the business owners. There is no tipping in Countries like Australia but the servers do OK. It's time to look at the business model being followed in Canada vs blaming these issues on low tipping.
Boils down to what kind of service you want and what kind of people you want serving you. We don't pay minimum wage people well (though it's better in Ontario now). You take away the tips, you'll find you're getting different staff. Whether you realize it or not, having a server that looks like they take care of themselves, is personable, is efficient and attentive, is specialized. You're not going to have those peoples if every decides not to tip. At which time, the server is going to look the same as the back-end guy at McDonald's.

As for Australia, over \$17/hour minimum wage, and the staff you get for that will match that.
Well, I am not a crook.
Deal Fanatic
Mar 24, 2008
5561 posts
Toronto
jeff1970 wrote:
Jan 8th, 2018 6:08 pm
...
As for Australia, over \$17/hour minimum wage, and the staff you get for that will match that.
If you think the "quality" of servers will be better, restaurateurs should start paying their servers \$17 an hour. What's stopping them? Surely this higher "quality" will attract more affluent crowd.

Tipping is customary but optional. I wouldn't be changing how much I tip based on sob stories. Just like with other jobs, if someone isn't making enough, they should look for a better paying job.
Illegitimi non carborundum
Mar 9, 2012
1805 posts
Kitchener
ksgill wrote:
Jan 8th, 2018 6:56 pm
If you think the "quality" of servers will be better, restaurateurs should start paying their servers \$17 an hour. What's stopping them? Surely this higher "quality" will attract more affluent crowd.

Tipping is customary but optional. I wouldn't be changing how much I tip based on sob stories. Just like with other jobs, if someone isn't making enough, they should look for a better paying job.
I've only heard a sob story once. Service was crappy (though very attractive waitress). And by crappy service, I mean, I told my kids to go help themselves to the refills, and go to the kitchen staff for their dessert. It was one of the few times I didn't tip...this despite the 'how expensive and hard university is'.

And I agree, restaurant owners, where tipping usually occurs (you can tell when there is a recommendation on the payment device), should pay their workers more. And have a 'no tip' policy. The good workers get the hours and strict probation for every hire.

That said, that's not how things in US/Canada work right now, and I really don't see things changing. In many parts of the US, paying servers \$2/hour is normal.
Well, I am not a crook.
Oct 16, 2008
4222 posts
Tipping subsidizes the restaurant owner as much as it makes you think you're some charitable person.
Dec 13, 2016
2501 posts
jeff1970 wrote:
Jan 8th, 2018 3:50 pm
You have likely never worked in the industry. A VERY GOOD night might be \$200....typically it's not that good. If you get hit hard, service degrades and so do tips. If the place is slow, service is better but you have fewer tables.

Having been in this industry for 20-odd years (though not as a server), most ladies were getting about \$80-\$100 per FULL shift minus tip out of kitchen staff and door staff.

Also keep in mind, not everyone gets 5 8 hour shifts. That simply doesn't happen. You might have 1 or 2 girls at the top who get that.

Generally, the girls would earn \$250 per week in tips. Or \$12,500/year... (remember, these servers generally don't work 52 weeks a year, like most Canadians)

Finally, tip-outs are based on sales: So if the girl sales \$1,000 during her shift (which is more typical) usually a 3-5% tip out is charged on SALES (not sales + tips). If a girl ends up with a couple big tables, tips are very low (perhaps \$1). You end up with a few bad tables, (it happens), very little tips. While this does not happen every time...it does happen, and sometimes these girls are going home with no tips at all.

Of course, you do have some that give exception service and can serve more tables than average. I know one server that was clearing over \$70,000G a year, this was working on the busy nights (5PM to 2:45AM). Sh was pretty, wore "nice" clothing, friendly and efficient. Her total tips in the year were \$50,000 (\$20.50/hour in tips plus \$10/hr server wages (only paid for 8.5hr). She was the exception.

The numbers you're stating simply don't happen.

Something to think about when you don't tip.

As for taxes (or not); CRA has been clamping down on servers not claiming the entire tip that has been earned. So at least with my establishments that I was at, management recommended that all staff claim 100% of tips.
Thanks. Another argument to rid of the tips completely.
Sr. Member
Dec 25, 2004
636 posts
I know this is RedFlagDeals but I’m surprised how cheap some of you are and also assume you never waited tables or bartended! I love a bargain but I’m not lower tips. If I’m having a sit down meal, where I’m being served I’m there for a good experience. Serving people isn’t easy, we’re demanding after all, I know I am. When the service is good, the food is good and I’ve enjoyed my experience I absolutely leave a top. A bad waitstaff can ruin my meal, paying 20% more for a good vs bad experience is well worth it for me.
Member
Jan 5, 2018
207 posts
jeff1970 wrote:
Jan 8th, 2018 3:50 pm
You have likely never worked in the industry. A VERY GOOD night might be \$200....typically it's not that good. If you get hit hard, service degrades and so do tips. If the place is slow, service is better but you have fewer tables.

Having been in this industry for 20-odd years (though not as a server), most ladies were getting about \$80-\$100 per FULL shift minus tip out of kitchen staff and door staff.

Also keep in mind, not everyone gets 5 8 hour shifts. That simply doesn't happen. You might have 1 or 2 girls at the top who get that.

Generally, the girls would earn \$250 per week in tips. Or \$12,500/year... (remember, these servers generally don't work 52 weeks a year, like most Canadians)

Finally, tip-outs are based on sales: So if the girl sales \$1,000 during her shift (which is more typical) usually a 3-5% tip out is charged on SALES (not sales + tips). If a girl ends up with a couple big tables, tips are very low (perhaps \$1). You end up with a few bad tables, (it happens), very little tips. While this does not happen every time...it does happen, and sometimes these girls are going home with no tips at all.

Of course, you do have some that give exception service and can serve more tables than average. I know one server that was clearing over \$70,000G a year, this was working on the busy nights (5PM to 2:45AM). Sh was pretty, wore "nice" clothing, friendly and efficient. Her total tips in the year were \$50,000 (\$20.50/hour in tips plus \$10/hr server wages (only paid for 8.5hr). She was the exception.

The numbers you're stating simply don't happen.

Something to think about when you don't tip.

As for taxes (or not); CRA has been clamping down on servers not claiming the entire tip that has been earned. So at least with my establishments that I was at, management recommended that all staff claim 100% of tips.
Whatever the math may come out to be, my primary issue lies with the concept, not the numbers.
ksgill wrote:
Jan 8th, 2018 4:33 pm

^ I think \$80-100 per shift + the minimum hourly wage is a fair amount for these jobs. How much more do you think servers should make? There is nothing specialized about these jobs. It someone can't makes ends meet, they should be looking for a better paying job vs. depending on tips.

In any case, it should not be their customer's responsibility to ensure that everyone in a restaurant makes a decent wage, it's the business owners. There is no tipping in Countries like Australia but the servers do OK. It's time to look at the business model being followed in Canada vs blaming these issues on low tipping.
Agreed and agreed.
Toronto Gamblers wrote:
Jan 8th, 2018 10:37 pm
I know this is RedFlagDeals but I’m surprised how cheap some of you are and also assume you never waited tables or bartended! I love a bargain but I’m not lower tips. If I’m having a sit down meal, where I’m being served I’m there for a good experience. Serving people isn’t easy, we’re demanding after all, I know I am. When the service is good, the food is good and I’ve enjoyed my experience I absolutely leave a top. A bad waitstaff can ruin my meal, paying 20% more for a good vs bad experience is well worth it for me.
It's not about cheapness, but about disagreeing with the concept/idea of tipping. Having said that, I do tip around 15% as that is social norm. But yes, I do think it's dumb and an arbitrary practice. (and so I guess I'm an idiot for continuing to do it)
Sr. Member
Dec 25, 2004
636 posts
It’s probably a bit about cheapness, right? We tend not to challenge social norms that are free. In principle I agree with you. Some social norms are outdated or perhaps never made sense. My point is that whether it’s dumb or not doesn’t change with min. wage. And it is a norm where we live. There is definitely a correlation for those who have received tips and have worked hospitality, that must mean something as well. Anyway, wages go up and that won’t change how I perceive the norm, I’ll reward those who make my experiences better.
Mar 9, 2012
1805 posts
Kitchener
ilove wrote:
Jan 8th, 2018 10:14 pm
Tipping subsidizes the restaurant owner as much as it makes you think you're some charitable person.
Well one thing, the owners keep more of their cash in terms of wages and payroll taxes.

I think discussing tipping at this site is silly though, 90% of the people here are cheap and don't want to pay more than they think they have to. Hence the RFD effect, especially when their is a pricing error. \$399 for a brand new Surface Pro...(one of my better deals).

This whole tipping thing though is about what has become a social norm. And really it came out of the USA, as it's a known that servers live off of their tips, not wages. I'm not that old, but old enough to remember when tipping in Canada was usually no more than 10% (for a higher end restaurant). We'd go to the states, and we're educated pretty quickly on the social norms in the US where 10-20% is the norm even for a rundown diner (so 10% for a crappy diner or 20% or higher for a good restaurant). In the 90's in seemed that things started going up in tips, where 15% was considered the norm fro good service and it seems to have crept up to 20% and now even 25%.

Of course, one can still follow the social norm, if they want to. Cook at home. Order "pick-up" and avoid the tax issue. I mean, if you go to Swiss Chalet and pick up the food, how many tip on that? Their's not even the option to tip on the payment device. Now that is being a true RFD'er.

Still, I would like to see some forward thinking businesses in the industry to forbid tipping and just pay their workers well. Provide good service and good food for customers, and good wages for employees. And they wouldn't have to charge 15% extra either...probably 5% would do it.
Well, I am not a crook.
Deal Fanatic
Mar 24, 2008
5561 posts
Toronto
Toronto Gamblers wrote:
Jan 8th, 2018 10:37 pm
I know this is RedFlagDeals but I’m surprised how cheap some of you are and also assume you never waited tables or bartended! I love a bargain but I’m not lower tips. If I’m having a sit down meal, where I’m being served I’m there for a good experience. Serving people isn’t easy, we’re demanding after all, I know I am. When the service is good, the food is good and I’ve enjoyed my experience I absolutely leave a top. A bad waitstaff can ruin my meal, paying 20% more for a good vs bad experience is well worth it for me.
Why stop at 20%, why not go all the way to 100%? Surely, service will get 100% better that way. After all, it's hard work bringing food from the kitchen to a table 25 feet away and not every one can do it.
Illegitimi non carborundum
Member
Jan 5, 2018
207 posts
jeff1970 wrote:
Jan 9th, 2018 7:16 am
Of course, one can still follow the social norm, if they want to. Cook at home. Order "pick-up" and avoid the tax issue. I mean, if you go to Swiss Chalet and pick up the food, how many tip on that? Their's not even the option to tip on the payment device. Now that is being a true RFD'er.
What? Does anybody actually tip on a pick up/take out order? I never do and I thought nobody did either.
Jr. Member
Mar 30, 2010
114 posts
Toronto
Toronto Gamblers wrote:
Jan 8th, 2018 10:37 pm
I know this is RedFlagDeals but I’m surprised how cheap some of you are and also assume you never waited tables or bartended! I love a bargain but I’m not lower tips. If I’m having a sit down meal, where I’m being served I’m there for a good experience. Serving people isn’t easy, we’re demanding after all, I know I am. When the service is good, the food is good and I’ve enjoyed my experience I absolutely leave a top. A bad waitstaff can ruin my meal, paying 20% more for a good vs bad experience is well worth it for me.
I do tip because it's a social convention, but as someone who worked as a dishwasher in a busy restaurant I can assure you that the kitchen staff deserve tips far more than the waitstaff. Our "tip out" was 2% of restaurant revenues, which is quite a bit below the standard 15% tip the waitstaff received. I spent 10 hours per shift without a break in a 40C "dish pit" getting covered in food waste while the servers sat comfortably in their break area and counted their stacks of tip money just a few metres away. Unfortunately it's not our social convention to tip the person that cooked your meal or washed your dishes, even though they almost certainly influence your enjoyment more than the waitstaff.
Sr. Member
Jul 3, 2001
757 posts