10% Service Charge, Where Does It Go?

[Smithson]

I'm curiuos about the 10% service charge at alot of places in Bkk. I've been told that in alot of countries this goes to the staff, but I don't know if that's the case here.

If it doesn't go to the staff what's the justification? If it does go to them, then I suppose customers don't need to tip?

Would be interesting to here from owners of a few places where this is practised.

[suegha]

I'm also curious about this!

[Ulysses G.]

I understand that in Thailand it hardly ever goes to the staff.

It is another way for greedy owners to jack up your bill while paying the staff a pittance.

The really sick thing is that it keeps people from tipping the staff, because they feel that they already paid for "service".

The places that don't pass on the service charge to the staff should be boycotted!

[khall64au]

I understand that in Thailand it hardly ever goes to the staff.

It is another way for greedy owners to jack up your bill while paying the staff a pittance.

The really sick thing is that it keeps people from tipping the staff, because they feel that they already paid for "service".

The places that don't pass on the service charge to the staff should be boycotted!

Only prob with your boycott UG is... hand us the list please!

I recently heard it from the "horses-mouth" - at a 3 star-hotel on Samui- the GM tells me that the 10%service-charge is NOT paid to the staff by the greedy owner/s & (surprisingly?) Samui hotels have big problems keeping staff....

[Guest endure]

If you want to tip someone you should give it to them personally.

[khall64au]

If you want to tip someone you should give it to them personally.

TOTALLY- if you have the time to waste arguing with hotel managers, then refuse to pay the "service charge" & pay it personally to the staff who "served you" ...

[sriracha john]

The justification from the owners in not giving it to the waitresses is that it's a "service charge," not a "waitress charge," which would exclude the other staff (cooks, bartenders, dishwashers, host, etc.) who don't traditionally get a tip directly from the customer nor share in the tip the waitstaff do receive.

They'll also say it's for any "extras" they may have from time to time... such as balloons or decorations on special occasions.

In the end, the result is that it all simply goes into the accounts book as income for the restaurant and/or bar, and the use of these funds is however the owner of the business sees fit. It's a 100% profit for the business with no costs. A few, but not very many, do share it with the staff. Those that do, typically do so to the entire staff (including the aforementioned "support staff").

Many, if not most, places that one encounters in Thailand that have service charges are typically connected to a Western business., eg. Western-chain hotel retaurants in BKK. They take the Western-custom of frequently-encountered service charge establishments... but utilize an Asian "twist" to it, as most Western places in the West actually do share the charge with their staff. Here, they charge you, but just then keep it... one of the fringe benefits of opening a franchise in the East.

Very, very few Thai-owned, Thai-based establishments have the service charge.

Those that do, will typically share a portion of it, albeit a small one, with their staff.

Edited May 19, 2006 by sriracha john

[khall64au]

The justification from the owners in not giving it to the waitresses is that it's a "service charge," not a "waitress charge," which would exclude the other staff (cooks, bartenders, dishwashers, host, etc.) who don't traditionally get a tip directly from the customer nor share in the tip the waitstaff do receive.

They'll also say it's for any "extras" they may have from time to time... such as balloons or decorations on special occasions.

In the end, the result is that it all simply goes into the accounts book as income for the restaurant and/or bar, and the use of these funds is however the owner of the business sees fit. It's a 100% profit for the business with no costs. A few, but not very many, do share it with the staff. Those that do, typically do so to the entire staff (including the aforementioned "support staff").

Many, if not most, places that one encounters in Thailand that have service charges are typically connected to a Western business., eg. Western-chain hotel retaurants in BKK. They take the Western-custom of frequently-encountered service charge establishments... but utilize an Asian "twist" to it, as most Western places in the West actually do share the charge with their staff. Here, they charge you, but just then keep it... one of the fringe benefits of opening a franchise in the East.

Very, very few Thai-owned, Thai-based establishments have the service charge.

Those that do, will typically share a portion of it, albeit a small one, with their staff.

Sriracha John- you do live here I assume? Phuket is rife with "service charges" & the Samui hotel example I gave above was a Thai-owned chain of resort hotels.

Do your homework! ..........

[sriracha john]

The justification from the owners in not giving it to the waitresses is that it's a "service charge," not a "waitress charge," which would exclude the other staff (cooks, bartenders, dishwashers, host, etc.) who don't traditionally get a tip directly from the customer nor share in the tip the waitstaff do receive.

They'll also say it's for any "extras" they may have from time to time... such as balloons or decorations on special occasions.

In the end, the result is that it all simply goes into the accounts book as income for the restaurant and/or bar, and the use of these funds is however the owner of the business sees fit. It's a 100% profit for the business with no costs. A few, but not very many, do share it with the staff. Those that do, typically do so to the entire staff (including the aforementioned "support staff").

Many, if not most, places that one encounters in Thailand that have service charges are typically connected to a Western business., eg. Western-chain hotel retaurants in BKK. They take the Western-custom of frequently-encountered service charge establishments... but utilize an Asian "twist" to it, as most Western places in the West actually do share the charge with their staff. Here, they charge you, but just then keep it... one of the fringe benefits of opening a franchise in the East.

Very, very few Thai-owned, Thai-based establishments have the service charge.

Those that do, will typically share a portion of it, albeit a small one, with their staff.

Sriracha John- you do live here I assume? Phuket is rife with "service charges" & the Samui hotel example I gave above was a Thai-owned chain of resort hotels.

Do your homework! ..........

With apologies, I live in Thailand, not Phuket or Samui.... I should have added that disclaimer.

[Totster]

The Rimpao Hotel in Kalasin makes a 10% service charge.. When I realised I said to the wife we wouldn't be tipping anymore... but this made her feel uncomfortable.. So now..if we want to tip we give the tip personally to the waiter/waitress after the bill has been paid.

totster

[Guest endure]

If you want to tip someone you should give it to them personally.

TOTALLY- if you have the time to waste arguing with hotel managers, then refuse to pay the "service charge" & pay it personally to the staff who "served you" ...

If you want individual staff to benefit then you hand them a tip personally regardless of whether you pay the service charge or not. One has nothing to do with the other.

[Smithson]

If you want to tip someone you should give it to them personally.

TOTALLY- if you have the time to waste arguing with hotel managers, then refuse to pay the "service charge" & pay it personally to the staff who "served you" ...

If you want individual staff to benefit then you hand them a tip personally regardless of whether you pay the service charge or not. One has nothing to do with the other.

I want all the staff to get something extra because the salary they receive is rarely enough to live on and there often 'fined' by employers for things like coming a few mins late, taking a sick day on a weekend or messing up an order. What most/alot of places do with tipping is pool it and share it amongst the staff.

The smallest print on the menu is always the part that refers to the 10% service charge and applicable govt taxes. I would be also interested to know how often the tax charge is pocketed as profit (since most business don't have this charge).

It's always the expensive places with the extra charges, so I think it's a bit greedy.

Would be good to hear from some business owners on this topic.

[stats]

Yeah i do tip them personally rather then putting it no the tip box

[Gary A]

Bourbon Street in Washington Square, Bangkok has a plus, plus system. Ten percent service tax plus VAT. Since I no longer go in there to eat I have no idea where the money goes.

[Digger]

I accept the 10% service charge but what always hacks me off is the 7% vat being added as an afterthought. In one of the businesses I own, we include VAT in our prices and do not add any service charges. Any and all tips are shared out by the staff concerned, be that in contact or not with the customer.

[meadish_sweetball]

I'm curiuos about the 10% service charge at alot of places in Bkk. I've been told that in alot of countries this goes to the staff, but I don't know if that's the case here.

If it doesn't go to the staff what's the justification? If it does go to them, then I suppose customers don't need to tip?

Would be interesting to here from owners of a few places where this is practised.

It varies from place to place. Ask the person serving you. Of course they could claim they do not get it, even though they do, just to get extra from you - but there really is no other way of knowing.

Here in Chiang Mai, the policies at different hotels are completely different - in some places the staff see nothing of the service charge, in one place they get 1000 baht each per month, irrespective of the amount, in another they get 50%... and so on.

[cobra]

.. If you want to tip someone you should give it to them personally...

Agreed, this has been my practice,

[suegha]

My biggest bug-bear is when the service is cr@p and when you get your bill there it is 10% service charge! This happened in Samui recently, we had some great Sushi but the waiting staff were miserable as h£ll, we decided not to tip and the service charge meant they stopped our free choice to give. Having said that I don't know if the staff got the 10%!

[Erwin1011]

.. If you want to tip someone you should give it to them personally...

Agreed, this has been my practice,

That doesn't work. your tip to the individual goes in a pot and at best is shared between all the staff.

In most cases, it is kept by the owner.

[Totster]

.. If you want to tip someone you should give it to them personally...

Agreed, this has been my practice,

That doesn't work. your tip to the individual goes in a pot and at best is shared between all the staff.

In most cases, it is kept by the owner.

And how do you know this.. ?

In my experience the waiter/waitress will keep any tip given to them personally.. tips left in with the bill are put into a pot and more often than not kept by the management.

totster

[Guest endure]

.. If you want to tip someone you should give it to them personally...

Agreed, this has been my practice,

That doesn't work. your tip to the individual goes in a pot and at best is shared between all the staff.

In most cases, it is kept by the owner.

If you hand a tip to a nong personally they know it means that is for them and they keep it.

[StateSix]

At the hotel where my missus works the service charge is shared amongst the staff. It can add up to a fair percentage of her salary. Having said that, I have no idea what percentage of the service charge is paid to the staff, and what percentage is kept by the owners.

[oopapasan]

Bourbon Street in Washington Square, Bangkok has a plus, plus system. Ten percent service tax plus VAT. Since I no longer go in there to eat I have no idea where the money goes.

Bourbon St goes into Doug's pocket not to the staff.I don't go there anymore.

[Momenthai]

I completely agree with the others who have recommended giving the tip directly to the waiter.....I have a friend who's Mum owns a restaurant and he told me that if a customer tips on the credit card slip then the tip doesn't go to the staff, which I thought was ridiculous.

[farangene]

If you hand a tip to a nong personally they know it means that is for them and they keep it.

Whenever, we get good service from an individual or if we frequent a restaurant we ask what the tip split policy is. It varies widely.

At Fuji Restaurants, the tips are split at the end of the month. We were told that all tips, even tips personally handed to one individual, are included in the pot. Waitresses seemed happy with the system and I suspect it is a major supplement to their salary. Therir comparaitive employee turnover is remarkably low for Thailand, in my opinion.

At antoher place (Charcoal Gray) several years ago, the waiter brought the tray around and explained (unasked) that if we handed him the tip personally, he would get it exclusively and wouldn't have to share . We left the tip in the tray as we were waited on by more than just than the one waiter. Greedy bugger and one of the few that ever appealed for a personal tip. He was gone the next time we went there.

[ZZZ]

As far as I can see most of above are only speculations.

My own speculation is that in most cases whether you give tip direct to waitress, together with the change or in the tip box the tip will probably be pooled and divided among the staff after the owner has taken a cut. Even if you give direct to the waitress she will probably have to share with the others or risk being fired.

An easy solution to all this would be if all stopped giving tips altogether, this is Thailand and not the US. This stupid US tax avoidance scheme has already started spreading here in Thailand and should be stopped immediately.

Before tipping was introduced in Thailand you nearly always had excellent service as waitresses took pride in their job and to provide good service was part of the job description in service occupations.

If a waitress was very good she got promoted to shift leader or got a pay rise. All employed in the service industry knew exactly what the monthly pay check would be and all customers knew what the bill would be.

There is absolutely no point in introducing this stupid scheme here as it will not have the tax implementations that it was designed to avoid in the US.

If there were no tips the salaries would have to be adjusted and the best paying restaurants would get the best staff, there is a shortage of service staff in Thailand so they would only benefit from this.

If you work in the service industry you should provide good service to all customers, not only to customers giving high bribes (tips).

Is there really any reason why people in the service industry should not be rewarded for a job well done by pay rise and promotions just like in any other line of work?

[Smithson]

As far as I can see most of above are only speculations.

My own speculation is that in most cases whether you give tip direct to waitress, together with the change or in the tip box the tip will probably be pooled and divided among the staff after the owner has taken a cut. Even if you give direct to the waitress she will probably have to share with the others or risk being fired.

An easy solution to all this would be if all stopped giving tips altogether, this is Thailand and not the US. This stupid US tax avoidance scheme has already started spreading here in Thailand and should be stopped immediately.

Before tipping was introduced in Thailand you nearly always had excellent service as waitresses took pride in their job and to provide good service was part of the job description in service occupations.

If a waitress was very good she got promoted to shift leader or got a pay rise. All employed in the service industry knew exactly what the monthly pay check would be and all customers knew what the bill would be.

There is absolutely no point in introducing this stupid scheme here as it will not have the tax implementations that it was designed to avoid in the US.

If there were no tips the salaries would have to be adjusted and the best paying restaurants would get the best staff, there is a shortage of service staff in Thailand so they would only benefit from this.

If you work in the service industry you should provide good service to all customers, not only to customers giving high bribes (tips).

Is there really any reason why people in the service industry should not be rewarded for a job well done by pay rise and promotions just like in any other line of work?

The post above makes alot of sense, after more than a decade here I've seen the increase in tipping. In some places staff will let you know they're unhappy if they don't get a tip, in others you have to pay the bill after each round and the staff want to be tipped each time.

The biggest problem with not tipping is most staff don't earn enough to live on and there's no way they'll get an increase.

I noticed the 10% + tax at Bourbon st only after the bill came, it was written so small on the menu.

The other place is Subway near Nana station, there's a tip box even though they're just handing stuff over the counter.

[ZZZ]

The biggest problem with not tipping is most staff don't earn enough to live on and there's no way they'll get an increase.

Of course with no tipping the compulsory service charge or the actual price of the service would have to be increased so the restaurant could pay higher salaries. It’s all about demand and supply.

The result would be the employees would earn the same, and they would know exactly how much they would earn.

The owner would still get the same resulting income.

The customers would still pay the same and everyone would get the same service. Also, the atmosphere between service personnel and customers would be more relaxed and friendly without the expectance of giving and receiving an arbitrarily decided amount of money.

Edited May 22, 2006 by ZZZ

[Erwin1011]

.. If you want to tip someone you should give it to them personally...

Agreed, this has been my practice,

That doesn't work. your tip to the individual goes in a pot and at best is shared between all the staff.

In most cases, it is kept by the owner.

And how do you know this.. ?

In my experience the waiter/waitress will keep any tip given to them personally.. tips left in with the bill are put into a pot and more often than not kept by the management.

totster

I've several friends working in the service industry, my wife is working in it, although now active in the back office and I worked myself a stint in the hotel industry. That's how I know

[Erwin1011]

My comments in color

As far as I can see most of above are only speculations.

My own speculation is that in most cases whether you give tip direct to waitress, together with the change or in the tip box the tip will probably be pooled and divided among the staff after the owner has taken a cut. Even if you give direct to the waitress she will probably have to share with the others or risk being fired.

Absolutely correct. The first action however will be taken by the co-workers: he/she will be ostracized by the rest of them. If that doesn't work, management is made aware of it.

An easy solution to all this would be if all stopped giving tips altogether, this is Thailand and not the US. This stupid US tax avoidance scheme has already started spreading here in Thailand and should be stopped immediately.

Before tipping was introduced in Thailand you nearly always had excellent service as waitresses took pride in their job and to provide good service was part of the job description in service occupations.

If a waitress was very good she got promoted to shift leader or got a pay rise. All employed in the service industry knew exactly what the monthly pay check would be and all customers knew what the bill would be.

There is absolutely no point in introducing this stupid scheme here as it will not have the tax implementations that it was designed to avoid in the US.

If there were no tips the salaries would have to be adjusted and the best paying restaurants would get the best staff, there is a shortage of service staff in Thailand so they would only benefit from this.

If you work in the service industry you should provide good service to all customers, not only to customers giving high bribes (tips).

Is there really any reason why people in the service industry should not be rewarded for a job well done by pay rise and promotions just like in any other line of work?