Topic: Restaurant

When Is a Tip Not a Tip? When the IRS Says So…

Here’s a tip: restaurants that tack a fixed charge on certain bills must begin withholding additional taxes on those amounts. Known as “auto gratuities,” compulsory service charges paid by diners should be considered employer-paid wages—not tips—and treated accordingly for tax purposes. Law firm Pillsbury: “Employers are required to collect income tax, employee social security tax… Read more »