Waitressing is tough work. Balancing dishes with the wishes of customers takes place largely in the pursuit of big tips. According to a 2010 report from the Bureau of Labor Statistics, waitresses make a median hourly wage of $8.81. That includes tips. Waitresses who work in Maryland will find that their tips are subject to state and federal withholding. All federal withholding shows up on paychecks.
Many patrons pay tips in cash, and although that money may seem like a bonus, tax officials consider it income. According to the Maryland Department of Labor, Licensing and Regulation, employers may pay tipped employees no less than $3.63 per hour, provided they earn enough in tips to bring their average hourly wage to at least the state minimum wage of $7.25 per hour. Regardless of whether you receive the money in cash, reporting tips is the law.
Record and Report
Resist the temptation to tuck a few bucks in your pocket to avoid paying taxes. That's illegal. Besides, it could come back to haunt you. Let's say you earn $45,000 a year -- plenty to qualify for a car loan -- but you only report $25,000 on your income tax return. To explain the discrepancy when applying for a loan, you must admit to cheating on your taxes. Many employers provide tip-tracking worksheets. But ultimately, you bear responsibility for tracking and reporting tips.
Facing the Fed
According to the IRS, if you earn less than $20 a year in tips, you don't have to report them. Otherwise, employees must give their employers written reports of tips by the 10th of the following month. You also must include tips as income on your tax return. Any tip-sharing arrangement, and charged tips, such as credit and debit card charges distributed to the employee directly from the employer, also count as income and will show up on your paycheck.
The State's Stake
In Maryland, tipped employees are those who regularly earn more than $30 per month in tips. Restaurants are exempt from paying minimum wage only if tips can cover the deficiency in minimum pay. The employer must make up the deficiencies to bring a waitress's pay to the minimum wage level. Waitresses who perform non-tip duties, such as acting as hostess for the day, must receive from their employer at least the full minimum wage rate for that nontipped period.
2016 Salary Information for Waiters and Waitresses
Waiters and waitresses earned a median annual salary of $19,990 in 2016, according to the U.S. Bureau of Labor Statistics. On the low end, waiters and waitresses earned a 25th percentile salary of $18,360, meaning 75 percent earned more than this amount. The 75th percentile salary is $26,590, meaning 25 percent earn more. In 2016, 2,600,500 people were employed in the U.S. as waiters and waitresses.
- Maryland Department of Labor Licensing and Regulation: Division of Labor and Industry
- Lawyers: Taxes When Most of Your Salary Comes from Tips
- Internal Revenue Service: Tips: Withholding and Reporting
- Bureau of Labor Statistics: Waiters and Waitresses Pay
- U.S. Bureau of Labor Statistics: Occupational Outlook Handbook: Waiters and Waitresses
- Career Trend: Waiters and Waitresses
- Photodisc/Photodisc/Getty Images