Can a Restaurant Owner Charge a Waitress Credit Card Fees?

Waiters and waitresses are typically paid a minimal hourly wage and rely primarily on voluntary contributions -- tips -- from the patrons they serve. At the time of publication, the standard tip amount to offer a server is 15 or 20 percent of your total bill. What many restaurant goers don't know is that when you put your tip on your credit card, it may cost the waitress.

Read more: Can a Restaurant Owner Charge a Waitress Credit Card Fees? |

Legal Allowances

  • Though there are two exceptions, federal laws do not prohibit the deduction of processing fees -- for the tip amount -- from the wages of a waitress who accepted credit or debit cards as payment. Nationwide, this practice is perfectly legal, provided such deductions do not reduce her hourly wage to an amount below the current national minimum wage guidelines. The only other exception applies to servers employed in states where municipal laws prohibit credit card processing fee deductions.

State Variances

  • In 2011, only a few states in the country prohibit restaurant owners from charging their serving staff for processing fees on credit or debit card tips. Some that do are Oregon, Colorado, Montana, Nevada, Alaska and California. The state of Washington allows the practice but enforces a disclosure law. In Washington, restaurant owners who deduct tip processing fees from employee wages are required by law to disclose this information to patrons, giving them the option to tip in cash. However, servers are not allowed to suggest or solicit cash tips.


  • Restaurant owners are not required to charge employees for credit card tip processing fees, and some don't. Unless prohibited by state law, this practice is totally optional, and as a waitress, it is your decision whether or not you care to agree to such an arrangement prior to accepting employment. If you choose to work for a restaurant that applies this rule, you can expect to pay between 1.5 and 3.0 percent of each credit card tip you receive. Many employers will charge you the full amount of the tip processing fees and other times a 50/50 split is applied.


  • Today, more and more people are using credit and debit cards as an alternative to carrying cash. Typically, credit card tips account for a considerable amount of a waitress's tips, and the processing fees of a full time server's tips can add up significantly; hence noticeably reducing her income. For instance, a waitress who earns five credit or debit card tips of $20 per day, five days a week -- $500 -- and pays a 3 percent processing fee for each one, will wind up paying $15 per week in tip processing fees. When multiplied by 52 weeks in a year, her income is reduced by $760 annually. On the other hand, credit card tips are 100 percent traceable and taxable by the IRS preventing any misappropriated tax filings.

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