UnderCover Waitress: Paycheck Deductions

Wednesday, October 31, 2012

Paycheck Deductions

Ask the Waitress!
Hi!  I am considering taking a server position in Oregon.  I understand that I should get min wage. My question is: how much can be taken out of my paycheck?  

Oregon is a state that does not allow tip credits. That means that servers make a base wage of full minimum wage. As of January 1, 2012, in Oregon that wage is $8.80 per hour. In 2013, that wage is set to rise to $8.95. Waitresses in Oregon currently make a base wage of $8.80 per hour.

Waitresses in Oregon receive tips. Therefore, they usually make more than $8.80 per hour by the end of the shift. Tipped employees are required to claim their income for tax purposes.

The short answer to "how much can be taken out of my paycheck" depends upon a number of factors, including how much tip money you claim. I don't know the exact set-up of the restaurant the asker is considering working for, but will walk you through a common scenario.

Base wages are paid via paycheck every two weeks.

At the end of every shift, each waitress much claim her tips. Sometimes that is done via a computerized POS ("point of sale") system, some restaurants instruct servers to fill out a quick form with their name, date, and tip monies earned.

Okay, let's say you work six shifts in a two-week period. Each shift is six hours long.

6 shifts x 6 hours = 36 hours.
$8.80 x 36 hours = $316.80 before taxes.

To make the numbers easy, let's say you make $50 in tips each shift.
$50 x 6 shifts = $300.

Your before-tax income for the two-week period is $616.80. You already took $300 home with you. Your paycheck, before taxes, will be $316.80. However, and this is the important part: Taxes based upon an income of $616.80 will be taken from your paycheck. Remember, you already took $300 home as pre-tax income.

This is why waitresses see different amounts of tax removed from their paychecks each pay period. Tipped employees' income varies, therefore, so do taxes paid each pay period. Sometimes, a waitress will do so well in tips that she actually owes the restaurant money for taxes. That, however, is much more likely to happen in states with tip credits (i.e., waitresses only make $2-$3 per hour.)

Waitresses pay the same categories of taxes as any other salaried or wage-earning employee, such as state income tax, federal income tax, social security, medicare. Other paycheck deductions may include employee contribution to health care; you must check with your employer about what deals they offer, if any.

Another thing to be aware of: no employer may remove monies owed to you from your paycheck without your permission. Many restaurants like to hold waitresses responsible for non-paying customers, which is unreasonable for reasons I have detailed in the past, including waitresses are not security guards. However, they will try to get you to sign something giving them permission to do this. It is often in fine print, and if you do not sign you will likely not be hired.

I hope this helps explain how waitress paychecks work, in general. Thanks for asking the waitress!

Edit: I need to add to what I said about waitresses owing the restaurant money for taxes. In states that have tip credits (pay waitresses less than minimum wage,) employers are responsible for ensuring that the waitress is taking home at least minimum wage minus tips. If her income dips below that, the restaurant must make up the difference. This is not relevant in states such as Oregon that do not allow tip credits to begin with. Even in Oregon, if a waitress made, let's say, $1000 in tips in the above scenario, she may owe the restaurant money back for taxes. That, however, is unlikely.


  1. I can see the tax situation with this field of work getting very complicated, very fast...

    1. I actually think it is hilarious that people complain about waitresses not claiming all of their tips, but don't want to make millionaires pay tax on their income. So, the waitress is a dead beat, but the multi-millionaire is just off the hook. Hopefully, this will change soon...


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