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| Tips and Tipping Aug 2008 |
What is the origin of the word tip in the
context of giving thanks for good service?
The short answer is that no-one really
knows.
There are two romantic urban myths; the
first that a gentleman in the 17th century
would ‘tip’ his hat to say thank you and
one day this coincided with the handing
over of monies.
The second, and considerably more
popular romantic conjecture, is that early
tea and coffee houses held a box in the
corner with the words inscribed “To Insure
Prompt Service.” Over time this was
abridged to TIPS.
Etymologists tell us that, prior to the start
of the 20th Century, there’s no single
example of an acronym providing the
derivation of a word. One suggested fact
often cited is that literature first described
a tip in 1706, “Then I, Sir, tips me the
verger with half a crown” in George
Farquhar play, the Beaux Strategem.
Three hundred years later there’s a lot of
confusion, for different reasons, about tips
in restaurants. At the turn of the 1990’s
the US IRS noticed missing tax dollars
from the tipping of croupiers in Casinos.
This prompted closer examination of
restaurants where the IRS later found an
estimated $9bn tax revenue shortfall.
Where the spotlight falls in the US
sometime later the spotlight falls in the UK.
The UK however is more complicated, not
only because it is laden with different old
customs and practices but also the legal
structure is very different. There’s the
minimum wage, PAYE, National Insurance
and VAT.
context of giving thanks for good service?
The short answer is that no-one really
knows.
There are two romantic urban myths; the
first that a gentleman in the 17th century
would ‘tip’ his hat to say thank you and
one day this coincided with the handing
over of monies.
The second, and considerably more
popular romantic conjecture, is that early
tea and coffee houses held a box in the
corner with the words inscribed “To Insure
Prompt Service.” Over time this was
abridged to TIPS.
Etymologists tell us that, prior to the start
of the 20th Century, there’s no single
example of an acronym providing the
derivation of a word. One suggested fact
often cited is that literature first described
a tip in 1706, “Then I, Sir, tips me the
verger with half a crown” in George
Farquhar play, the Beaux Strategem.
Three hundred years later there’s a lot of
confusion, for different reasons, about tips
in restaurants. At the turn of the 1990’s
the US IRS noticed missing tax dollars
from the tipping of croupiers in Casinos.
This prompted closer examination of
restaurants where the IRS later found an
estimated $9bn tax revenue shortfall.
Where the spotlight falls in the US
sometime later the spotlight falls in the UK.
The UK however is more complicated, not
only because it is laden with different old
customs and practices but also the legal
structure is very different. There’s the
minimum wage, PAYE, National Insurance
and VAT.
Untangling where and when tips qualify as
income for each or any is a matter for
sophisticated consultants and
accountants.
Some clarity has come into view recently
with acknowledgement that tips cannot
make up the difference in a basic wage that
is set below the minimum wage. The
minimum wage is the minimum wage and
tips go on top.
The most commonly used system for
pooling and dividing up tips in the UK is
called a tronc – literally meaning trunk, or
the French example tronc des pauvres
meaning poor box. Here a points system
is used to reward members of the front of
house and kitchen staff.
The administrator, or troncmaster (sounds
grand and slightly Masonic), has the
unenviable job of ensuring that all taxes are
appropriately avoided and not evaded.
More complexity arises from the UK
practice of a 12.5% discretionary charge
taken on credit card slips.
The restaurateur has processed this
payment and experienced a 2%
administration charge from the credit card
company. Owners too point to damages
and breakages and whether they should be
covered as expenses taken from the pool
of tips?
In any event – Everyone - The
restaurateurs, the waiting staff, the
customers and the government would all
appreciate clarity and transparency;
although achieving this is understandably
more difficult than first thought.
income for each or any is a matter for
sophisticated consultants and
accountants.
Some clarity has come into view recently
with acknowledgement that tips cannot
make up the difference in a basic wage that
is set below the minimum wage. The
minimum wage is the minimum wage and
tips go on top.
The most commonly used system for
pooling and dividing up tips in the UK is
called a tronc – literally meaning trunk, or
the French example tronc des pauvres
meaning poor box. Here a points system
is used to reward members of the front of
house and kitchen staff.
The administrator, or troncmaster (sounds
grand and slightly Masonic), has the
unenviable job of ensuring that all taxes are
appropriately avoided and not evaded.
More complexity arises from the UK
practice of a 12.5% discretionary charge
taken on credit card slips.
The restaurateur has processed this
payment and experienced a 2%
administration charge from the credit card
company. Owners too point to damages
and breakages and whether they should be
covered as expenses taken from the pool
of tips?
In any event – Everyone - The
restaurateurs, the waiting staff, the
customers and the government would all
appreciate clarity and transparency;
although achieving this is understandably
more difficult than first thought.