adding service charge to restaurant bill

No, the service charge can be included or not at the choice of the managment/owner. ITBIS should be included and shown although many restaurants don't do this.
Now, I'm fairly sure that's correct but I will bow to anyone with a more "hands on" knowledge than mine!

There is a law that says that service employees get 10% of the bill. There is another law that says that you have to add 16% as a VAT tax.

I am not sure that it is voluntary....ask a lawyer...

HB

It?s my understanding that the 10% service if on the bill is passed on to the customer and the staff is then gaurenteed a least some kind of tip for their kind and efficient service.

These are two different things, 10% profit sharing (which applies to all businesses) and the 10% service charges that applies to hospitality businesses (restaurants, bars, hotels).

The 10% is over the total check excluding 16% ITBIS, and so is the ITBIS. Yet I've seen places that make that 10% larger by charging it on the total of the check plus the ITBIS. Some restaurants have all the taxes included in their prices to make it easier for customers, but that doesn't exempt you from distributing the 10% or not paying the ITBIS.

It's easy then, what you do is you include the ITBIS, and the propina legal within the price. for instance if you want to sell a beer at $100 even, its price before tax would be about $79 (that is what you sell it, the additional $21 are tax + service, for a total of 26%). If you have a POS system you can program it into your pricing to display the tax, or you can just display totals. Its important to remember, that if the bar sells 100 pesos, taxes and service in, the emplyees don't get 10, but rather 7.93 pesos. And it is by law, there is no ifs or buts about it. The only exception I can think of is for take out orders, but that's all.

Basically if you include all taxes in the price, you devide sales by 126 parts, 100 is for the business, 16 are for taxes, 10 are for employees. 10/126 =0.794 if you were wondering where i got the number from.

Personally i think that including the taxes is better, it doesnt leave a bad taste in a clients mouth when they are hit with an unexpected 26% on their bill. And it is good to state this on your menu, that prices are as seen, AI, if you will.

Next thing you'll need to figure out is how to divide and pay the %. Usually management will get the largest amount, followed by Chefs (in the case of restaurant), Bartenders, waiters, kitchen staff, cleaners - some other staff might get a small bonus.

The logic is this, managers(good ones) will make a big impact on sales, they will attract clientele, prevent theft (can be huge in DR), maintain quality - it is also norlmal to offer managers sales based incentives for reaching sales targets. Bartenders will have a higher salaray, and receive more propina legal, because their access to tips is less than that of wait staff. etc.

If i've left anything unclear, feel free to PM, or I can clear it up in here, its a little late.

I agree. If you separate the 10% most tourist won't tip on top. I own a restaurant and have my prices with all taxes included (just don't specify which ones). Yet, I wrote on the menu, tips appreciated. For the most part, the employees get some extra money in tips. Some people will never tip if you say outright that 10% service included. Besides, this service tax is not a tip to your server. The law requires you to distribute it among ALL employees, that includes managers. In many places most of the 10% goes to the managers, and very little to the kitchen, waiters and bartenders. But even if it is distributed evenly and honestly by owners, it still is NOT a tip to the server of 10%, but the portion of that 10% that he/she gets could be really low if there are lot of other employees.

Royston said:

Ok
so that means it is obligatory to add the 10%?
The question is not borne from a desire to cheat employees, quite the reverse. My experience from having had my own restaurants in the past is that forcing a customer to pay 10% will result in just that - 10%. Whereas leaving it open will often result in a larger contribution overall

Click to expand...

Again, if you are using a POS software, you can program the fees so that they appear on your recepits. You can also disguise the "service" as " % Legal", because it is not really a "service charge" per se, nor is it a tax.

Your bill could looke something like this:

XXXX BAR & GRILL

1 Presidente $79
16% ITBIS $13
10% Legal $8
---------------------
Total: $100


As with the industry everywhere tips are the bread and butter, in the DR the % is also a signifigant amount of income. As mentioned above the more employees you have, the less each will be recieving in %. Its better to have a few really good employees, then a lot of mediocre employees. If you have less they will be more motivated, because there will be more money to make. Don't be afraid to fire on short notice, give warnings (amonestaciones), and watch them like hawks.

i dont actually see the point of listing the 10 percent tax on the bill if it has to be paid anyway - cant you just call it the price of the meal .When you see too many taxes on a bill it puts you off, no matter what the final price

If there are no taxes listed you think its a better deal even though it might be more expensive

am i making any sense lol

jrhartley said:

i dont actually see the point of listing the 10 percent tax on the bill if it has to be paid anyway - cant you just call it the price of the meal .When you see too many taxes on a bill it puts you off, no matter what the final price

If there are no taxes listed you think its a better deal even though it might be more expensive

am i making any sense lol

Click to expand...

I think you're right JR, though it pains me to admit it LOL We both know people wh as soon as they see tax or a service charge listed on the bill refuse to go back as if they've just been cheated, even if the overall cost has been less than somewhere that includes the taxes in the menu price. Some people are just funny like that!

im always right it just takes some people longer to admit it lol

is that a quote

jrhartley said:

im always right it just takes some people longer to admit it lol

is that a quote

Click to expand...

it is now lol

jrhartley said:

i dont actually see the point of listing the 10 percent tax on the bill if it has to be paid anyway - cant you just call it the price of the meal .When you see too many taxes on a bill it puts you off, no matter what the final price

If there are no taxes listed you think its a better deal even though it might be more expensive

am i making any sense lol

Click to expand...

Well i think for transparancy and accounting its ok to list the taxes, as in my example. On your menu, you put the price of a beer at $100, The receipt would show this breakdown (beer $79, ITBIS $13, % 8) with a $100 total. This way people don't feel ripped off or anything, they are paying the advertised price. Plus it makes it a whole lot easier for accounting to calculate accumulated ITBIS and %legal, and also for comprobante fiscal.

The other way is to list your prices without tax. This is not the way to go. Person sees Beer $100, then receives a bill of $126 - the customer feels decieved.

In an informal setting you could just advertize prices, and charge what they say, and give hand written receipts. However going with handwritten tracking and billing at a restoraunt or bar leaves a lot of opportunties for theft - and audit. A computerized POS makes it easier to track this info, and easier to spot employee theft. It all depends on your volume I guess, if you're small, have trustworthy employees, you can go the informal route, if big, you want to cover your ass in case of audit - Outback was shut down for tax evasion.

So let me try to get this straight...
I'm planning on opening with my dominican hubby a small comedor for locals with comida criolla. At most at the beginning, we will have a part-time cook and a cashier.
Plan is for the customer to come up to the window/counter, order their food, food is cooked, customer takes their food to a table and eats it. No plans for waiters for now...

1) So as a small restaurant even for locals, I have to charge 16% on everything including food which normally bought at supermarket would have no ITBIS charged (like say a chuleta de cerdo or salami)???

2) But, the 10% service charge is optional???

3) If our business is small and we make little money, do we have to pay this 10% profit sharing thing??? If yes, does this apply to all employees full and part-time?

SIDE-NOTE: Am I required to get comprobante fiscal facturas for all my purchases of food that I plan to resell to customers in order to deduct the expenses? Because, fruits and vegetables at the market are much better than those in some supermarkets but small markets surely don't offer facturas con NCF...

Hmmm, good question. I'm not certain, but would incline towards there not being a 10% legal for the employees in this type of establishment, as it wouldn't have servers - I might be wrong, but can't remember ever seeing a %legal on a mcdonalds receipt.

As for ITBIS, I presume you would charge tax, as you are no longer selling an unprepared food product. i.e. a bag of chips would have itbis, but potatoes wouldn't. As for comprobante fiscal, get it for anything you do buy at a supermarket, and for things you buy at the market, ask them to write you up a receipt, it maybe just for accounting purposes, and it is very easy to "fudge" the numbers, but it is good to have some backing in case of an audit. I doubt many businesses of this type are 100% true to the letter of tax law, and being somewhat informal, there are a few things you can probably omit.

Best bet would be to talk to someone who already operates a similar business.

The mandatory tip is governed by articles 228 to 230 of the Labor Code copied below.

Art?culo 228.- En los hoteles, restaurantes, caf?s, barras y en general, en los establecimientoscomerciales donde se expende para su consumo en esos mismo lugares comidas o bebidas, es obligatorio para el empleador agregar un diez por ciento por concepto de propina en las notas o cuentas de los clientes, o de otro modo que satisfaga dicha percepci?n, a fin de ser distribuido ?ntegramente entre los trabajadores que han prestado servicio.

Art?culo 229.- Los empleadores deben adoptar los m?todos pertinentes para que las percepciones
obligatorias por concepto de propinas sean liquidadas semanalmente o en cualquier oportunidad
convenida, para ser repartidas en partes iguales entre el personal.

Art?culo 230.- La liquidaci?n de las sumas a que se refiere el art?culo precedente debe ser justificada por los empleadores, as? como su reparto y entrega.

Sr. Guzman,
El articulo 228 se aplique por mi tipo de restaurante? Vamos a tener un tipo como Burger King/McDonalds que la gente necesito de ordenar su comida y pagar a la cajera...
Gracias,
Chantale
PS: what about the 10% profit sharing, does it apply to a small business such as mine?