Taiwan's "service" charge

I’m not sure if you guys know this, or if it’s been brought up before, but I just found out that the 10% “service” charge that most dine-in restaurants charge, goes directly to the company. None of it reaches the actual server! I’m from America, and I’ve been in the restaurant industry for a while now, and I don’t know about you, but if I see “service charge” on my check, I assume that it will go to the server for the services provided. I know that the custom of “tipping” is done pretty much in the US, and as I understood it, a lot of Asian countries had the “service charge” added in to the bottom of the check automatically. Apparently, MOST restaurants keep this “service charge” for themselves.

My question is, “Do you think that this is right?” The way I see it, restaurants are actually charging customers an extra 10%, and stating it as a “service charge” is very misleading. In America, the standard etiquette for tipping is 15%, but a lot of restaurants will automatically tack on a 15% to the check if it is a large group of diners. Again, the 15% is not mandatory, and you can refuse to pay it if you do not feel the service was satisfactory. Is that the case here in Taiwan also? If I knew that the servers would not be getting the 10% extra they charge me, I would never agree to pay that extra charge. I feel as though someone went to America, and saw how people tipped extra at the end of the meal, and felt that they could put more money into their pockets stating it was for “service.”

It’s part of the price - it’s just a tax thing.

ya, I was pissed about that when I first arrived too, but seems like everyone’s happy with it - guess it keeps the prices down since that 10% is the profit, but it never existed so all the businesses are running at “zero net income” for tax purposes

I get more pissed off that Americans a) insist on tipping in their own country and b) do it elsewhere thus changing the expectation of the locals for all white people

I get pissed off that American companies pay servers below-minimum-wage pay, meaning that tips are the servers’ primary income source.

But I also get pissed off at Americans tipping according to US tipping customs (15-20%) in other countries, thus changing the expectation of the locals for all Americans.

And if the “service charge” goes to the company here in Taiwan, why don’t they just scrap the charge and adjust their prices accordingly? It’s not a tax - it goes to the company, not the government. It’s not a tip - it goes to the company, not the servers.

[quote=“Chris”]I…

But I also get pissed off at Americans tipping according to US tipping customs (15-20%) in other countries, thus changing the expectation of the locals for all Americans.

And if the “service charge” goes to the company here in Taiwan, why don’t they just scrap the charge and adjust their prices accordingly? It’s not a tax - it goes to the company, not the government. It’s not a tip - it goes to the company, not the servers.[/quote]

It changes expectations for all of us whiteys not just the Americans.

I think the earlier comment meant that the restaurant saves tax by charging a service charge instead of one fixed price. i.e. the service charge is either tax free or at a reduced rate of tax. Why not have a 90% service charge and 10% price?

[quote=“Chris”]I get pissed off that American companies pay servers below-minimum-wage pay, meaning that tips are the servers’ primary income source.

[/quote]

I’m curious as to how they can get away with that. Don’t the waiters, bartenders etc have a union that can negotiate something, or can’t they all go on strike or something? Surely if the whole tip-based service industry nationwide shut down for a day or two, things would soon change. Or am I missing something?

Service charges in Taiwan are just there to pretend the restaurant, hotel or spa is somewhat “international” standard. You won’t find any service charges for restaurants in France (they always write “service inclus”) or Germany (but its common to tip a few euros).

In China the same. But the good thing is there have been occasions where I actually insisted that I don’t pay it if their service sucked. One time I was in a hotel restaurant with a customer in Wuhan and it took them like 30 minutes to get ready to take our order (after they gave out the menu). When they gave me the bill I just took a pen and erased the 10% service Charge. They didn’t argue and came back with a new bill that didn’t have it.

I don’t like tipping at all. Especially in the US it seems to be tough who you actually have to tip and who you don’t have to tip (especially outside restaurants). Larry David in the TV Show “Curb your Enthusiasm” made great use of it for his comedy sketches. :slight_smile:

In the end, its not something to get mad about, unless its a restaurant which asks for payment in advance (and the service charge is mentioned). :popcorn:

[quote=“cfimages”][quote=“Chris”]I get pissed off that American companies pay servers below-minimum-wage pay, meaning that tips are the servers’ primary income source.

[/quote]

I’m curious as to how they can get away with that. Don’t the waiters, bartenders etc have a union that can negotiate something, or can’t they all go on strike or something? Surely if the whole tip-based service industry nationwide shut down for a day or two, things would soon change. Or am I missing something?[/quote]

There aren’t many unions left in America, and when I worked as a server, there definitely wasn’t one for us. There’s actually two minimum wages in America, one regular and one for tippable positions. It varies from state to state, too. In Ohio it was $2.13 an hour for servers, but in Hawaii it was $6.50 because the government knew that most foreign tourists would not know to tip (also the cost of living was considerably higher).

[quote=“Tiare”][quote=“cfimages”][quote=“Chris”]I get pissed off that American companies pay servers below-minimum-wage pay, meaning that tips are the servers’ primary income source.

[/quote]

I’m curious as to how they can get away with that. Don’t the waiters, bartenders etc have a union that can negotiate something, or can’t they all go on strike or something? Surely if the whole tip-based service industry nationwide shut down for a day or two, things would soon change. Or am I missing something?[/quote]

There aren’t many unions left in America, and when I worked as a server, there definitely wasn’t one for us. There’s actually two minimum wages in America, one regular and one for tippable positions. It varies from state to state, too. In Ohio it was $2.13 an hour for servers, but in Hawaii it was $6.50 because the government knew that most foreign tourists would not know to tip (also the cost of living was considerably higher).[/quote]

I didn’t know that. I often here people talking about union shops and the like in the US, so I figured they were quite strong and prevalent.

Maybe that’s not the problem per se, but that the tip needs to be higher (30% perhaps?) so they can make more. Because whilst Amercain waiters can be a little too eager at times, service in America shits all over service in many other English speaking countries where sometimes you literally have to go and pour your own drink and give your order to the cook yourself.

Japan is probably the best for service (without extra charge) in the world.

Larry David should write the guidebook for certain American social norms. He really hits the nail on the head with many his insights plus he’s fucking hilarious.

[quote=“rocky raccoon”][quote=“engerim”]
I don’t like tipping at all. Especially in the US it seems to be tough who you actually have to tip and who you don’t have to tip (especially outside restaurants). Larry David in the TV Show “Curb your Enthusiasm” made great use of it for his comedy sketches. :slight_smile:
[/quote]

Larry David should write the guidebook for certain American social norms. He really hits the nail on the head with many his insights plus he’s fucking hilarious.[/quote]

Some links:

And eatmedaily.com/2009/11/larry … -gratuity/

I’m mostly with Mr. Pink on this tipping matter. If the service is below average in N. America, it’s about 10% or even less. If it’s abysmal, I will walk out before my food is served. If it’s good, then it’s about 15 to 20%. If it’s outstanding, and in a situation where I’m pushing the envelope, such as ordering a round of drink after last call, then it’s even more.
Situational Ethics. This tipping automatically is ludicrous.

Its definitely not a “tax.” Tax would imply that the government is imposing it on the restaurant, which in turn the restaurant imposes on the customer. The tax would be paid to the government for something or another, and the restaurant would not see any of that money. In this case, the “service charge” goes directly to the company, which goes into the owners pocket.

In America though, its a common misconception that companies are to blame for low wages forcing servers to live off tips. A few years ago, yes, restaurants would pay under minimum wage and tell servers that they will make it back in tips, forcing customers to leave tips to make up what restaurants wouldn’t pay.

For example, in Somewhere, Florida, the state minimum is $3.00/hr, but for tipped jobs, it can be $1.00/hr. The restaurant will hire a server for $1.00/hr and tells them they will make $50.00 in a shift of 6 hours. So that server will make $56.00 that day. When paycheck time comes along, legally, the restaurant would have to report all the tips the server had so that they can tax accordingly. The problem was, cash tips are very hard to track. If the server made $50 a shift, they would probably report about $10 to the govt. So in the govt. eyes, the server only made $16 a day, and they would take a tax out of that. If customers left a 1% tip or a 100% tip, it really wouldn’t affect the server any in terms of tax because they could report any amount they wanted. However, currently the American government has been able to come up with a “formula” to tax servers working in the US…

For example, in Somewhere, Las Vegas, the state minimum is $3.00/hr, but for tipped jobs, its $1.00/hr. The restaurant hires a server for $1.00/hr and tells them they will make $50.00 in a shift of 6 hours. So the server will make $56.00 that day. When paycheck time comes along, the government will add up the amount of sales you did within that period, and add on the “customary” 15% tip to that total, and then they will take the tax out of that. In other words, lets say in a day, the server sells $330 worth of food. The “customary” tip of 15% would mean that the server made $50. So now, the government knows that you have $50 in tips, and they will levy a tax on that. So the day you made $56, after government taxes of about 25%…you will have netted about $42 for the day. The problem here is that if your customers do not give the “customary” 15%, the government will still take taxes out of that 15%. In a more simple explanation, if a customer gives less than 15% tip, the server will have to pay the government out of their own pockets. So if a customer stiffs the server and the total bill came out to $60. The server will have to pay taxes on that $10 tip the customer didn’t leave. So basically, if a customer leaves no tip, the server will not only not have made money, but they will also end up paying out of their pockets to the government.

Sorry for the long winded math lesson, but a lot of people do not know what the service industry is like. Many people see tipping as an unnecessary custom, but since the American government has created this so called “formula”, it has turned a “custom” into a mandatory thing. The bottom line now is that if the server doesn’t make the “customary” 15%, they will have to pay taxes on it like they did which ends up as the server losing money instead of making money.

I agree with the fact that there are horrible servers which think that they deserve the 15% or more and will throw fits if they don’t get the 15% or more. They don’t realize that “tipping” is a custom, and it comes from hard work and good service. If i get crappy service, i will most definitely leave without tipping, or a less than average tip, but on the same note, if i get an extraordinary server that keeps me happy throughout the meal and is a hard worker, i’ll might leave them a 100% tip. At least i know that the money i give them will go to them. The money i want to give to the restaurant, i will have already paid for on the bill, the “service charge” is what I give to the server for doing an extraordinary job.

I have seen other countries that do a service included in the bill, but that money usually goes into a pot that is given to everyone from the chef to the server. In Taiwan though, it seems that this charge goes straight into the pockets of the restaurant. I think this is mainly because of greed and there are no laws about this kind of thing here.

Yes, what I mean is that it’s a tax manipulation strategy. It’s nothing to do with freebies or salary for the waitresses. If you want to give the waitress something, leave on the table. Taiwan’s culture is different.

So does that mean that its optional? I mean, since it has nothing to do with the servers salary, or a tax imposed by the government. Would I be able to refuse to pay it like if a server did a crappy job back in the states, since it is a “service charge”, or do you HAVE to pay it?

Yes. It’s part of the price. It’s not taxable, I believe.

You could probably argue the toss and get it removed, but they’d jizz on your salad, the next time you went in. And it would do nothing for the ‘Foreigners aren’t ALL cheap, aggressive tossers’ campaign.

I hate at those self-serve fucking hot pot chains how they add a 10% service charge. That’s outright bullshit and theft. If I have to get my food and cook it, who in those restaurants is actually working and why should I have to pay a so-called service fee?