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Salon & Spa Tipping: You're Probably Doing It All WrongWhen you're stressing over the gratuity at the salon or spa, keep these "tips" in mind |
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"If you tip on a credit card, the business is paying the merchant's fee and all of the FICA taxes for the employee on the credit card fee," says Phillips. "For example, if the business takes in $1,000 in gratuity, and we then have to pay that to employees, it will cost the business $1,200 to pay out $1,000 dollars."
That means the extra fees get subtracted from the tip you left, which is why most businesses won't accept a tip on a credit card.
Instead, clients can leave a tip in envelopes provided by most spas. Why the unnecessary clandestine paper transactions? "From an IRS perspective, the owner never even wants to see that cash," says Phillips.
SEE NEXT PAGE: When Not Tipping Is A-OK
