How much does a food server pay the IRS

I added this to the -ve tip thread, but since it is really its own subject I’ll repost it as a GQ.

It was stated in the other thread that food servers are expected by IRS to have been given an 8% tip, and that they are taxed upon that expectation.
Does anyone know if the 8% IRS value for expected tips is still valid, or has it gone up since basic tip % has gone up?

Secondly what tax rate would be typical for a low payed server. IE what percentage of the 8% expected tip would be payed by the server as tax if they were in a tax bracket of a minimum wage earner?

Which gets to this question
on a $10.00 bill how much would a server be out of pocket if they were stiffed on the tip?

Looks like it’s still 8%

Also appears the restaurant can work with the IRS to establish a different rate.

Given that they are taxed on a 8% of the cost of the meal, and assuming the approximate rate of tax they pay on their income is 25%, the amount they would be out if stiffed on the tip would be 10 * .08 * .25 = .20, or about 2% of the bill (obviously that number will be different if their tax rate is something other than 25%).

Thanks. Do servers typically report the 8% tip level, or there true tip level (about 20% these days) on their personal IRS forms. ie is cheating IRS common for servers?

The tax rate schedule may be found here:,,id=150856,00.html

If we fool around with the forumlas a little bit, we find that a taxpayer filing singly has to earn well over $100,000 to hit the 25% marginal income tax rate.

Mostly the 8%. I expect most cheat a little. The spiffier restaurants are audited by the IRS now & then to see what the tips really are. However, do note that most waitstaff wrok at coffeeshops and such like, and thus 8% is about right.

The IRS also has dudes with clickers count the tips at Vegas. Dangerous job. :stuck_out_tongue: