20% Service Charge?!?!

Leslie&Ralph

Just got the final bill from our reception hall. Not only is there a 20% service charge (or $1173),  but in the body of the email, my maitre D wrote:

 Attached find your final bill for the Wedding. The balance due should be a bank check or certified. Please be advised this does not include a suggested Maitre d’ Gratuity of 5-7%

What's the $1200 bucks for then? Do I need to tip the bartenders too, or is at least that covered in this 1200 dollar service charge? What does it cover exactly?

The tip she's getting will be 5% of the food/liquor bill, not including the sales tax and service charge.  Is that common?

danieliza1127

You should ask the venue directly what the service charge covers, but typically it does cover gratuity for the bartenders, wait staff, etc.  Obviously according to the e-mail it doesn't include the tip to the Maitre D'. 

kaederose

You need to ask them what it covers, because each venue is different.  Our service charge includes all the tips, but I've seen other places where that's not the case.

It sounds like the whole tipping thing there is crazy.  Did you ask what the tips/gratuities/service charges/any other fees were for and how much when you booked?  If so, did you get that in a quote, and is it different from what you're being told now?

mandysmear

Ask what it covers.  Don't ask the maitre D though.  Ask the manager. 

If the maitre D is not included in the service charge then I'd tip assuming the maitre D does well at t heir job.

hlq2011

We have a service charge for our venue - an NFL stadium - and the contract specifically says that it doesn't include gratuity.  I asked our coordinator specifically about it, and she was happy to answer, and explained that their staff are paid normal wages and not reliant on tips. They're appreciated but not necessary.

Anyway, the point of that was, ask.  They should have no problem telling you what it includes.  And if it were me, I'd probably be inclined to ask someone other than the maitre d', because I'm suspicious like that.

marissa_claire

Also - you should have asked them of these fees upfront.  Almost all vendors have service charges, transportation charges, gratuities.  This is almost always in guidelines about budgeting your wedding.  

bellebride116

Service charges are completely normal. 20% is a pretty normal amount. However, additional tips on top of that are completely up to you. 

Leslie&Ralph

Thanks for the responses!  I don't consider the service charge completely unexpected as it was quietly mentioned in the contract.  I'm just shocked at her brazenness about asking for a tip in the email. And I'm assuming the service charge includes gratuity for bartenders/wait staff.

LuluP82

Just ask if the service charge includes gratuity for the bartenders and waitstaff, if it's not specifically stated in the contract. It probably is, since otherwise, it would probably have been mentioned in the email as well.

nebbiolo

Did you note whether tax was added before or after the gratuity/admin charge of 20%? I've seen places that tax ontop of it and before. It doesn't seem right to me that I should have to pay taxes on gratuity/admin charges too.  Does anyone know about this?

Leslie&Ralph

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-boards_etiquette_20-service-charge?plckFindPostKey=Cat:Wedding%20BoardsForum:9Discussion:3c3997c1-9827-4023-8d6c-c038f7a32e9fPost:8310ff88-2655-41d4-ae40-baea705866ea">Re: 20% Service Charge?!?!</a>:
[QUOTE]Just ask if the service charge includes gratuity for the bartenders and waitstaff, if it's not specifically stated in the contract. It probably is, since otherwise, it would probably have been mentioned in the email as well.
Posted by LuluP82[/QUOTE]

Yup, I asked her and it is. One less thing to worry about.

I'm tipping the maitre d on the food/liquor cost only, not on tax and service charge. Fair?

mica178

What did your maitre'd do?  Was he the event coordinator, or was he just the guy sitting at the front, showing people to their seats?

5-7% sounds high if he was just involved in seating guests for one night.

Meg1979

I can't remember what ours was for.  I think it might have covered the valet parking, but not the matre'd.  I agree about the tax thing.  I tip pre-tax.  Maybe that makes me a cheapskate (I think it might), but I do...lol

Leslie&Ralph

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-boards_etiquette_20-service-charge?plckFindPostKey=Cat:Wedding%20BoardsForum:9Discussion:3c3997c1-9827-4023-8d6c-c038f7a32e9fPost:5c0dfffa-a9f0-4ecd-be1c-6f59b725e25e">Re: 20% Service Charge?!?!</a>:
[QUOTE]In Response to Re: 20% Service Charge?!?! : That is what I'd do.  I <strong>think the fact that the maitre d "suggested" their own tip of 5-7% if pretty unprofessional.</strong>
Posted by ILoveMilkDuds[/QUOTE]

Ugh, I agree. It's not the first time she mentioned it either. When we when for our menu choices and finalizing meeting she said, "Ok so I'll see you on the 24th with your table cards and seating chart, and hopefully a tip for your hard-working maitre D  <img border="0" alt="Wink" title="Wink" />"  I was like,  "Ok then?"

clearheavens

FWIW, my service charge was 22%, and that included gratuity to all staff.  Hope that helps.

LuluP82

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-boards_etiquette_20-service-charge?plckFindPostKey=Cat:Wedding BoardsForum:9Discussion:3c3997c1-9827-4023-8d6c-c038f7a32e9fPost:18279643-5e77-487f-bd41-227a11bb0601">Re: 20% Service Charge?!?!</a>:
[QUOTE]In Response to Re: 20% Service Charge?!?! : Ugh, I agree. It's not the first time she mentioned it either. When we when for our menu choices and finalizing meeting she said, "Ok so I'll see you on the 24th with your table cards and seating chart, and hopefully a tip for your hard-working maitre D  "  I was like,  "Ok then?"
Posted by Leslie&Ralph[/QUOTE]

Ew. This I find ridiculous. The email...is borderline. I think people probably don't realize they're "supposed" to tip her, if that makes sense. I find it akin to a spa having a little sign that says it's customary to tip for good service. Some people might think she gets a cut of the 20% charge, and it's clearly not the case. But to mention it to you...twice...is ridiculous.

quotequeen

Why would she be asking you to give her a tip before the wedding (at the time you drop off the placecards and stuff)??

saisongbird

We had the standard 20% service charge, but that went to the waitstaff, busboys, coatroom attendants, and valet attendants.  We were told to tip our bridal attendants between $100 and $200, and the maitre'd between $400 and $500.  It sucked, because when we read the contact we knew about the service charges, but not about the extra tips.  But we did it anyway because they were awesome.

mizachan1

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-boards_etiquette_20-service-charge?plckFindPostKey=Cat:Wedding BoardsForum:9Discussion:3c3997c1-9827-4023-8d6c-c038f7a32e9fPost:4c1b8142-2456-4720-90b6-445e175de59d">Re: 20% Service Charge?!?!</a>:
[QUOTE]Did you note whether tax was added before or after the gratuity/admin charge of 20%? I've seen places that tax ontop of it and before. It doesn't seem right to me that I should have to pay taxes on gratuity/admin charges too.  Does anyone know about this?
Posted by nebbiolo[/QUOTE]

It depends on the state you live in and your politicians.  You need to look up your state tax comission, they should have forms and packets available at no cost concerning this.  You could try calling the sales tax department at the state tax comission and have someone explain it to you. 

I'm an accountant living in Utah and planning my wedding there...service charges/tips are taxed IF they are listed on the receipt.  Tip is automatically calculated to groups of 8 or more usually.  So reception venue, caterer, restaurant or any business who's main source of income is preparing and selling food will do this.  Utah also has a 1% "restaurant tax" added to the sales tax (varies slightly by county)  So instead of 6.85% in Salt Lake it will be 7.85%.  Caterers, reception venues, hotels, restaurants etc are taxed at this rate.  Keep in mind they charge you tax since they will have to be taxed on it on their business return. 

<a rel="nofollow" href="http://tax.utah.gov/forms/pubs/pub-55.pdf">http://tax.utah.gov/forms/pubs/pub-55.pdf</a> here's a form explaning about Utah restaurant tax along with taxing service charges/tips in more detail. 

I'll also show a simple example of how you need to caculate your total bill living in Salt Lake County with a 18% service charge and taxed along with your food and drinks.

Food and drinks $2000 ($20 for 100 guests)
Calculate tip ($2000*18%=$360) 
Add tip to total food & drink bill ($2000+$360=$2360)
Calculate tax ($2360*7.85%=$185.26)
add tax to your food, drink and tip amount ($2360+$185.26)
Your total bill is $2545.26
Even if you hate math, do this calculation when planning your reception budget.  Do not round/guesstimate your total food bill!  :-D

Most caterers and hotels have service charges ranging from 20%-26%.  I would ask them why they charge such a high rate, break down costs per person.  Service charge is usually negotiable.  18% is industry standard.

IMPORTANT: You also need to ask your venue if the service charge is for food and drinks only or the entire bill (set ups, decor, equipment etc).  If they do add service charge to the entire bill it would be huge rise in costs especially if you have a set budget.  

Hope this helps.  Accountants usually bore people out :)

nebbiolo

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-boards_etiquette_20-service-charge?plckFindPostKey=Cat:Wedding BoardsForum:9Discussion:3c3997c1-9827-4023-8d6c-c038f7a32e9fPost:f25c867b-198d-4529-a439-0debded14324">Re: 20% Service Charge?!?!</a>:
[QUOTE]In Response to Re: 20% Service Charge?!?! : It depends on the state you live in and your politicians.  You need to look up your state tax comission, they should have forms and packets available at no cost concerning this.  You could try calling the sales tax department at the state tax comission and have someone explain it to you.  I'm an accountant living in Utah and planning my wedding there...service charges/tips are taxed IF they are listed on the receipt.  Tip is automatically calculated to groups of 8 or more usually.  So reception venue, caterer, restaurant or any business who's main source of income is preparing and selling food will do this.  Utah also has a 1% "restaurant tax" added to the sales tax (varies slightly by county)  So instead of 6.85% in Salt Lake it will be 7.85%.  Caterers, reception venues, hotels, restaurants etc are taxed at this rate.  Keep in mind they charge you tax since they will have to be taxed on it on their business return.  <a href="http://tax.utah.gov/forms/pubs/pub-55.pdf" rel="nofollow">http://tax.utah.gov/forms/pubs/pub-55.pdf</a> here's a form explaning about Utah restaurant tax along with taxing service charges/tips in more detail.  I'll also show a simple example of how you need to caculate your total bill living in Salt Lake County with a 18% service charge and taxed along with your food and drinks. Food and drinks $2000 ($20 for 100 guests) Calculate tip ($2000*18%=$360)  Add tip to total food & drink bill ($2000+$360=$2360) Calculate tax ($2360*7.85%=$185.26) add tax to your food, drink and tip amount ($2360+$185.26) Your total bill is $2545.26 Even if you hate math, do this calculation when planning your reception budget.  Do not round/guesstimate your total food bill!  :-D Most caterers and hotels have service charges ranging from 20%-26%.  I would ask them why they charge such a high rate, break down costs per person.  Service charge is usually negotiable.  18% is industry standard. IMPORTANT: You also need to ask your venue if the service charge is for food and drinks only or the entire bill (set ups, decor, equipment etc).  If they do add service charge to the entire bill it would be huge rise in costs especially if you have a set budget.   Hope this helps.  Accountants usually bore people out :)
Posted by mizachan1[/QUOTE]
Thanks for the details!

In CT, I believe that anything listed as a "service charge" cannot be considered tip, thus they can tax it. So basically, we are paying more per person than we think because the prices are just inflated by 20%. My contract reads this:
<font face="Times-Roman" size="3"><font face="Times-Roman" size="3"><p align="left"><em>"All food and beverage is subject to a 20% service charge and 6% CT state Sales Tax."</em>
So, they tax it all at 6%. Sucks for us!</p></font></font>

mizachan1

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-boards_etiquette_20-service-charge?plckFindPostKey=Cat:Wedding BoardsForum:9Discussion:3c3997c1-9827-4023-8d6c-c038f7a32e9fPost:320d998b-d6f3-4010-b5f9-4c24d5411729">Re: 20% Service Charge?!?!</a>:
[QUOTE]In Response to Re: 20% Service Charge?!?! : Thanks for the details! In CT, I believe that anything listed as a "service charge" cannot be considered tip, thus they can tax it. So basically, we are paying more per person than we think because the prices are just inflated by 20%. My contract reads this: "All food and beverage is subject to a 20% service charge and 6% CT state Sales Tax." So, they tax it all at 6%. Sucks for us!
Posted by nebbiolo[/QUOTE]

"Service charge" is a formal way of saying tip, they're the same thing. Not only you're paying 20% but an additional 6% to that 20% charge.  When you get your final bill back make sure they didn't apply the service charge to your rental of the venue (unless they put in some discreet wording in the contract somewhere saying they can, but from what I'm reading, service charge is for food and drinks only), you can find that out by doing the math somewhat backwards from how I explained it and finding out the percentage from your final bill.  If it's higher than 20% you would know they applied the 20% service charge elsewhere (for linens, chocolate fountain rental, rental of venue etc). 

nebbiolo

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-boards_etiquette_20-service-charge?plckFindPostKey=Cat:Wedding BoardsForum:9Discussion:3c3997c1-9827-4023-8d6c-c038f7a32e9fPost:e1e785aa-9556-4c2a-b5ef-d1782244ec85">Re: 20% Service Charge?!?!</a>:
[QUOTE]In Response to Re: 20% Service Charge?!?! : "Service charge" is a formal way of saying tip, they're the same thing. Not only you're paying 20% but an additional 6% to that 20% charge.  When you get your final bill back make sure they didn't apply the service charge to your rental of the venue (unless they put in some discreet wording in the contract somewhere saying they can, but from what I'm reading, service charge is for food and drinks only), you can find that out by doing the math somewhat backwards from how I explained it and finding out the percentage from your final bill.  If it's higher than 20% you would know they applied the 20% service charge elsewhere (for linens, chocolate fountain rental, rental of venue etc). 
Posted by mizachan1[/QUOTE]

When I read this: <a href="http://www.ctdol.state.ct.us/wgwkstnd/wage-hour/restaurant.htm">http://www.ctdol.state.ct.us/wgwkstnd/wage-hour/restaurant.htm</a> , I got the impression that the service charge is considered additional taxable revenue for the venue, and they have the <em>option</em> to pass it along as tips to the staff, but the staff are paid minimum wage regardless. So I don't think it's considered gratuity.

And yes, the contract states the "service charge" is only for food and beverage, nothing else.