Tip vs service fee

[USNret]

Sorry if this has been discussed; couldn't find anything similar in the "business" forum. 

It seems like a 10% service fee has become pretty standard in family restaurants, at least around BKK.  My question is whether this money actually makes it to the people who earn it (servers & cooks) or is it just added profit for the owner?  If it goes to employees, then I see this in lieu of a tip.  Some of you work in the restaurant business or otherwise have connections -- can you shed light on this?

I did ask a server today at a nicer chain restaurant on Sukhumvit BKK.  He said the employees share 1/2 the money; the other 1/2 goes to the "boss" which I guess means the owner.  Is this standard? In the States, the wording is important... "service fee" can be taken by management; gratuity goes to the staff, and can actually be removed from the bill if you make an issue of it. Not sure if Thailand enjoys this degree of nuance.  TYIA! 

[4675636b596f75]

I have been told by Fuji, that the house takes 5 percent and gives 5 percent to the staff.  I don't like it.

[Halfaboy]

And who gets the 90% (or should it be 50 / 50 ?)....

[4675636b596f75]

31 minutes ago, USNret said:

the other 1/2 goes to the "boss"

It's a hidden tax on your food.  It's not ethical.  Did the "boss" provide a service?

[Pib]

I live in Bangkok, western Bangkok, and never experience in service charge in my area of town.  However, when going over into "central, high rise, where tourists are everywhere  Bangkok" I've encountered several restaurants who cater to farangs/tourist that charge the 10% service charge.

 

I expect these restaurants assume the tourists are use to service charge/tips charge added to their bill as it common in many western/1st world countries...and the tourists don't complain about it.  Yeap, it's just extra profit for the business.

[scorecard]

I've heard of customers, Thai and farang, here and in other countries who scrub out the service fee and pay only the actual published cost of the food and drink.

 

I've been at the table when a Thai wealthy businessman did this for the already printed credit card bill, he scrubbed it all out and told the cashier girl to print it again without any service charges.  Whilst the cashier and manager were trying to figure out how to do the cc slip again with no service charge the businessman quietly and quickly gave every waiter a personal tip in their pocket of 100Baht. 

 

 

[topt]

19 minutes ago, scorecard said:

businessman quietly and quickly gave every waiter a personal tip in their pocket of 100Baht. 

If you want to give a tip to someone specific who served you then do exactly that - even in beer bars in Pattaya.......otherwise it gets shared out.

[suzannegoh]

There's a highend veg restaurant in a touristy part of Chiang Mai that is upfront about the money going to the boss. They put a sign at the tables saying that the Service Charge is not a tip and that if you want to tip the staff you must leave money in addition to the 10% SC and 7% VAT.

[reargunnerph3]

if a Service Charge is applied to the bill then no extra tip is required. Service Charge is the tip.

[nycjoe]

I would imagine it is at the discretion of the owner, they may see it as paying for the staff and give nothing to the server but I doubt that all of it would go to the server.  I tip 10% for exceptional service. I believe most thais leave the coins only.

 

[scorecard]

1 hour ago, suzannegoh said:

There's a highend veg restaurant in a touristy part of Chiang Mai that is upfront about the money going to the boss. They put a sign at the tables saying that the Service Charge is not a tip and that if you want to tip the staff you must leave money in addition to the 10% SC and 7% VAT.

I wonder how many return customers they have?

 

But I guess that depends to some extent on the cost of the dishes and the quality.

 

On the other hand, seems to me to be unwise for the boss to be so blatant about where the 10% service charge goes 7% VAT should be going direct to the revenue department, but I'm not sure if VAT is payable on restaurant meals? Anybody?

 

[GalaxyMan]

13 hours ago, 4675636b596f75 said:

I have been told by Fuji, that the house takes 5 percent and gives 5 percent to the staff.  I don't like it.

I ate at Fuji in Samui last night and they added a service charge. Total bullshit. We didn't leave a tip.

Nikki Beach Samui charges a service charge which they use to pay for their entire entertainment program. Anything that might be left over is disbursed to the employees. It doesn't amount to much. Again, a total bullshit way of doing business.

[1FinickyOne]

14 hours ago, 4675636b596f75 said:

It's a hidden tax on your food.  It's not ethical.  Did the "boss" provide a service?

have you ever been a business owner.... he rented the premises, bought all the provisions necessary, buys the food, supervises the prep, likely is the first one in and last to leave at night... etc etc etc...

 

It should not be hidden but usually is listed on the menu... 

 

Ethics? up for debate. 

[mtls2005]

I've also heard that only a portion 10% service charge goes to servers and other employees, and that portion varies by the establishment. 

 

Some places have menus with prices before VAT, some include VAT.

 

It seems like more and more places - and not just those catering to a tourist clientele. are adding the 10% service charge. I'd prefer the menu prices reflect the real price, so just jack it up 10%, but maybe there are some accounting/tax benefits to doing it this way?

 

I think VAT is applied after the service charge is added, so the net is ++ 17.7%.

 

I rarely leave a tip - other than in my local pub, definitely do not if the 10% service charge has been paid. 

[Pib]

Why don't they start billing separately for electricity....telephone....maintenance....rent....and all the other many costs involved in running any business? 

 

A Service Charge is just something a business adds on for more profit since they know many folks are use to seeing such a charge....think of it as a tip for service.

[suzannegoh]

Just now, Pib said:

Why don't they start billing separately for electricity....telephone....maintenance....rent....and all the other many costs involved in running any business? 

 

A Service Charge is just something a business adds on for more profit since they know many folks are use to seeing such a charge....think of it as a tip for service.

"thinking of it as a tip for service" goes to the heart of the problem.  If there's a service charge then almost definitely the customer won't leave a tip, so if the owner doesn't give the service charge money to the staff (as is often the case in Thailand) then the staff is getting shafted out of a tip.

[AAArdvark]

25 minutes ago, kenk24 said:

have you ever been a business owner.... he rented the premises, bought all the provisions necessary, buys the food, supervises the prep, likely is the first one in and last to leave at night... etc etc etc...

 

It should not be hidden but usually is listed on the menu... 

 

Ethics? up for debate. 

I have and it is a pretty simple calculation.  You figure out how much profit you want/need and subtract your expenses.  There is no need to resort to unclear addons like service charges, just add the 10% or whatever to the price of product.

[Krataiboy]

At one of my regular restaurants, the staff told me that the owner insists on pocketing all tip money.  As a result, my friends and I now leave a coin or two on the plate and discreetly slip a 20 baht note into the waitress's hand or pocket.

 

The service we get has improved no end!

[baansgr]

Some even put 7% tax also....tips need to be earned and are not a prequesit to being a waiter/ess hence why I very very rarely tip in Thailand if at all.

[Snow Leopard]

3 hours ago, suzannegoh said:

There's a highend veg restaurant in a touristy part of Chiang Mai that is upfront about the money going to the boss. They put a sign at the tables saying that the Service Charge is not a tip and that if you want to tip the staff you must leave money in addition to the 10% SC and 7% VAT.

So its a 10% tax then. 

[cracker1]

My wife works for an International Five Star hotel where the service charge is divided equally by all staff. Last month they received 19,700 TB each. I am aware of some locally owned 4 and 5 Star Hotels that take a large slice  themselves and share the balance with the staff. The "Thai Way" ?

[Snow Leopard]

 

I see the 10% service charge on a bill as an additional tax. Basically, robbery so the restaurant owner can make more money. I like what someone posted about a Thai guy asking for it to be removed. If I don't see the statement written down somewhere on the menu that all prices are subject to a 10% service charge I might try it. 

 

I also don't like to see the 7% VAT added on after either because in most other countries it is included in the printed price on the menu. I don't want to look at the price of something on a menu and then start adding 7% to see what the actual price is. I am the end user at the point of sale so I cannot claim the VAT back. 

[Cats4ever]

Tipping is an American disease that has spread. When I first came to Thai in the early 70's, the guides all made a point of stating that tipping was not required. It has spread unfortunately, back in Oz also. I like to tip people who have gone over and above only.

[Snow Leopard]

Just now, cracker1 said:

My wife works for an International Five Star hotel where the service charge is divided equally by all staff. Last month they received 19,700 TB each. I am aware of some locally owned 4 and 5 Star Hotels that take a large slice  themselves and share the balance with the staff. The "Thai Way" ?

That's good to hear. I am sure that in most cases 50% of the 10% charge is the best that can be expected to be received by the employee. 

[suzannegoh]

So its a 10% tax then. 

It would be a 10% tax if it went to the government.

[khunPer]

And if service is included in the price, you don't think (too much) about tips or not...

 

Some restaurants and resorts just show their prices without service charge and v.a.t. – makes dishes look 15 percent or thereabout more affordable – but they still pay a salary to their staff, just like the ones that include staff expenses and v.a.t. in the menu-card price; same-same, but different.

 

If you feel you got a good service, leave some tips with the bill, or in the tip box, the staff will be happy for even little extra.

 

Tip box, or tips left with the bill, are normally distributed between the staff, so also the ones in the kitchen, dish washers etc., which you don't see, get a share; and sometimes the owner also has a cut from tips, that's how it works, and don't think too much about it.

 

If you wish a certain waiter/waitress to have the tip, put it directly in his/her hand.

 

If you don't wish to pay extra tip at all, simply don't – but even small tips generate a nice smile and happy staff, and they might even remember you when you come next time – some times it's amazing what 20 baht or relative similar, depending of the size of the bill, can do...????

[Vacuum]

10 minutes ago, khunPer said:

If you feel you got a good service

You mean the staff are actually doing their job?

[scorecard]

4 hours ago, reargunnerph3 said:

if a Service Charge is applied to the bill then no extra tip is required. Service Charge is the tip.

Well that was always my understand, also meaning it's for the wait staff and in some places also shared with kitchen staff.

 

But nowadays it seems that owners feel entitled to either all of 50% of the service staff.

 

Seems to me owners should price their dishes (on the menu) so that they make a good workable margin which customers will not see as excessive. 

[55Jay]

Hey, it's 2019, Bro, like, you totally need to get with the times, Bro. 

 

The new business model is to advertise food products for sale.  You chose what you want and let the owner/staff know.   The kitchen staff prepares the product, the front end staff carry the plate to your table and wave it around under your nose, "Mmmm, looks and smells good, don't it?  Bet you would like to try it, huh?  Psych!  Ha ha ha!", then they carry it back to the kitchen. 

 

"But wait, that's what I asked for!  Can you bring it back, please?" 

 

"Ooohhh!  You're actually hungry?  Heh heh, I bet you are."

 

"Well, yeah, I am, that's why I came into a restaurant.  Your sign out front advertised hot dogs for 50 Baht.  It's lunch time.  I agreed to buy one.  I sort of thought you handing me the hot dog was part of the deal?" 

 

"Heh heh, *Terms and **Conditions apply, sucka.   Here's the deal - you can look for free and if you chose one of my products, the advertised price only covers my cost to procure and prepare it.  That's it.  If you actually want me to hand the hot dog to you, that's going the extra mile and not factored into my business plan, so you have to pay an additional delivery fee.

 

"And before you ask, no, I don't allow customers into the kitchen area, so you can't eat the hot dog back there, or go get it and carry it back to the table yourself to avoid the fee, you cheap charlie!  This ain't McDonalds, bud, this is a full service restaurant!"

[jvs]

2 hours ago, cracker1 said:

My wife works for an International Five Star hotel where the service charge is divided equally by all staff. Last month they received 19,700 TB each. I am aware of some locally owned 4 and 5 Star Hotels that take a large slice  themselves and share the balance with the staff. The "Thai Way" ?

That is why i kind of like service charge charged by bigger hotels and restaurants.It is equally divided so also the staff who does not deal directly with customers gets a share.Gardeners,parking attendents and dishwashers etc.