this post was submitted on 10 Aug 2024
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Well, a balance has been found. Prices factor tips in to some degree, that's economics. Cash tips can bypass taxes, so that's a little bit of a win for the employee, who both has a lower income bracket and under the table payments. Or if taxes are properly accounted, then the staff gets higher salary, so that's fine. Staff also knows that their performance counts, so there's a bit of a service quality benefit, compared to a restaurant where the staff doesn't get tips / has no incentive. At the end of the day, it's not really much different, you just remember that the prices on the menu are not final, just as you do for taxes, but the tipping model allows for flexibility in total cost
Tax is included in the price in the UK, and I'm pretty sure it's the same in most of Europe. (Maybe with the odd exception where a company primarily sells to businesses and excludes VAT)