A restaurant chain wants me to tip their accountants?

Here in the UK, we have a chain of Italian restaurants called Zizzi. I was perusing their website, and found a page called Happy Tipping, in which there is the following statement:

*The amount of tip that you want to leave is between you and your waiter and it is their responsibility to ensure that they declare tips to the HM Revenue and Customs for tax purposes.

If it’s more convenient for you to leave a credit card tip, Zizzi will be held accountable for ensuring tax is paid on it. Because of this, there is a small administrative charge (8% of the tip) to cover the costs of complying with this tax policy. We don’t profit from this charge. *

I pay a surcharge to Zizzi so they can sort out their tax affairs? That is completely ludicrous. I’m paying a tip to their accountants? Get real, Zizzi.

Over the last couple of years the Daily Mirror has been running a “fair tips” campaign to stop various restaurant chains from using tips to top up wait-staff wages so they achieve the minimum wage. One of the villains was Zizzi and it’s sister company Pizza Express. So I’m not surprised about the above statement.

Here is the Mirror article

That’s why I always tip cash - that way I know more or less who the money’s going to.

My wife tended bar at a family-owned establishment for almost six years. Towards the end of her employment they started charging the employees a service fee for credit card tips. The real problem was they did it even if you didn’t receive any CC tips.

I’m a former restaurant manager, and I can’t wrap my head around this. How on Earth would ensuring tax is paid on a credit card tip cost them any more money?

I don’t know how it works in the UK, but my employees would enter their tips at the end of their shifts, and the POS system kept track of the total amount - along with their hours - over the pay period. When it came time to do payroll, I didn’t have to do one thing extra to ensure that taxes were being properly paid.

Oh, right. Silly me. The correct answer is greed, so they make up bullshit and expect their employees and customers to believe it.

I can sort of see the reasoning behind this (the charge, that is, not charging if there’s no CC tips), because the restaurant pays a percentage, probably around 2%, of the total amount of a transaction to the bank. But, come on. If the restaurant is eating that charge, or passing it on to the customer, surely they can do the same for the extra 20 cents on a $10 tip.

That’s rather ballsy to charge a surcharge on tips. I hope they hang by them.

That IS rather ballsy. I guess they figure most people have never waited tables and don’t know anybody who has…

This. Cash rules.

I don’t have much positive to say about tipping in general but you seem to me to be positively itching for something to get enraged about. “Paying a tip to their accountants?” Get real, NineToTheSky. They are simply saying that if you tip cash it’s all simple, but if you tip on a credit card they have to fiddle about with paying the server’s tax on it and this costs them administratively and so they recover the cost. Not outstandingly unreasonable, and at least they are upfront about it. And it’s not as if they are boxing you into a corner: cash is the obvious alternative and they make no secret of it.

I’m a Grumpy Old Man, and proud of it.

I have never come across this before, and it seems to me totally unnecessary. If this is justifiable, they could take this in all sorts of directions. For example, the credit card companies charge them when they take payment by credit card, so, by your reasoning, they could pass on that charge to us; thereby making it clear that they would prefer all payments in cash.

And how have they come to 8%? Does it really cost their accountants 80p in every £10 to do the paperwork?

Yes, I know, compared to the economic crisis and global warming, this is small beer, but, goddamnit, can’t a man complain about anything nowadays?

Yes, a man can. That’s why I’m allowed to complain about your post.

Frankly it wouldn’t surprise me if it cost them more than 8%. Think about it, they potentially have to fartarse around with large numbers of tiny transactions accounting for each employee individually for their (ie the employee’s) personal tax. That’s another reason your posts are unfair: you say it’s for the restaurant to sort out “their” tax affairs: more properly it’s to do the paperwork for their *employee’s *tax affairs, from which the employer gains nothing (which is why your credit card charge analogy is inapt)

Frankly, I get all GOM’ish myself about people who go ballistically whiney about certain costs of business being passed on by businesses if the business itemises the cost. If you say “that costs $10.10” people will just pay it. If you say “that’s $10.00 and ten cents because we have a 1% charge to cover the cost of light bulbs in our store” people go through the roof and start throwing around terms like “ludicrous” and complaining about covering the businesses expenses, yet it makes no difference. Let me fill you in on a secret: the amount you pay for stuff you buy covers all the retailer’s costs. Get on it, get off it, get over it all ready. If they tell you what costs you are covering, they are just providing you with information that is usually hidden, not ripping you off in some way.

There would be less administrative costs if they paid better and cut the tips. Save money that way.


Wait staff get at least minimum wage in the UK, and tips are rarer and smaller (I rarely tip more than 10%, if I tip). The point is that to track credit card tips, the tips need to be calculated and distributed among the working staff (tips are rarely kept individually), and then tax paid on those credit card tips with the rest of the PAYE tax. This is not an option for the company if the money goes through their system. The admin fee is pretty reasonable, and at least they no longer use these tips to achieve minimum wage.


Personally I deal with people who serve me from the opposite perspective.

Knowing that giving them money over and above what they’re paid to do their job will cause them problems with the tax people, I instead give them a sound thrashing if their service is not up to standard.

I also find that reporting them to government immigration as illegal immigrants also does the trick.

This saves them all the hassle of declaring tips, etc. and in the long run ensures better service.

I remain your servant sir.