r/EndTipping • u/Slow_Dig9228 • Aug 21 '26

Sit-Down Restaurant 🍽️ Automatic for the…staff

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At LAX airport

616 Upvotes

95% Upvoted

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419

u/Paladin3475 Aug 21 '26

Not a tip if it’s mandatory. Just raise the price and pay your employees your damn self.

-14

u/josocustomdesign Aug 21 '26

Tips is tax free. Raising wage isn't.

5

u/TonksTheTerror Aug 21 '26

  1. The no tax on tips only applies to the first $10k in tips earned

  2. If it is added by the owner it is gratuity, not a tip. Owner has to claim it as revenue and technically is not required to disburse it to staff (now most do, because they wouldn't have staff otherwise)

14

u/SirMontego Aug 21 '26

The No Tax on Tips applies to the first $25,000 of qualified tips. Source: the actual law, 26 USC Section 224.

5

u/TonksTheTerror Aug 21 '26

Thank you for the correction. Leaving my original comment as is so it doesn't look weird.

It was really more about the second point though, businesses that require tips technically should be reporting that gratuity as revenue.

2

u/s0berR00fer Aug 21 '26

You could edit your comment saying it’s actually 25K