> Stop the tipping guilt trip placed on the public, raise your prices 20%, and pay your employees a livable wage.
FYI, one of the reasons restaurants don't do this is the tax impacts. When someone tips 20%, there is no sales tax assessed on the tip — the full 20% goes to the worker. If you increase prices by 20%, that is subject to a sales tax (roughly 10% where I live), which amounts to a 1%-2% increase in the total price.
On top of that, moving tips to wages results in more income and payroll taxes being taken out (most workers do not fully report all of their tips, which saves them both income and payroll taxes).
It might not seem like a lot — just a couple percent here and there — but restaurants have pretty thin margins.
FYI, one of the reasons restaurants don't do this is the tax impacts. When someone tips 20%, there is no sales tax assessed on the tip — the full 20% goes to the worker. If you increase prices by 20%, that is subject to a sales tax (roughly 10% where I live), which amounts to a 1%-2% increase in the total price.
On top of that, moving tips to wages results in more income and payroll taxes being taken out (most workers do not fully report all of their tips, which saves them both income and payroll taxes).
It might not seem like a lot — just a couple percent here and there — but restaurants have pretty thin margins.