How should restaurants handle waiters' tips?

Many restaurants have different ways on how they handle tips left by patrons for staff.

Some restaurants let their waiters keep the cash given to them by hand at the end of the meal. In some instances, the restaurants keep the money and divide it amongst the restaurant staff, including the chefs.

But what happens when patrons use credit cards to pay the bill?

Chairperson of Fedhasa (Federated Hospitality Association of South Africa ) Western Cape, Jeff Rosenberg says there is, unfortunately, no statutory law that deals with gratuity in South Africa, which leaves it up to the restaurants to do decide what suits the owners and staff.

He explains that there is also a Sars interpretation of gratuity which establishments are required to declare.

If an establishment has a pool system and they are giving the tips over to the staff, it has to be added to their basic salary and form part of their gross remuneration, which should be taxable.

Jeff Rosenberg, Chairperson of Fedhasa

Rosenberg acknowledges that the moral thing to do is to make the tips available to the staff as quickly as possible.

He says regrettably, some restaurants don't give their staff a basic salary, which means they depend entirely on those tips.

This is something Fedhasa has no control over because it is not a policing body.

If it comes to our attention, we can certainly have a chat with these establishments, advise them on legalities but we are not a policing body that can actually regulate that.

Jeff Rosenberg, Chairperson of Fedhasa

It is not a moral thing to do. We need to look after our people because after all, they are the ones who make us enjoy the business that we are currently having.

Jeff Rosenberg, Chairperson of Fedhasa

To hear the rest of the conversation, listen below:


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