I understand what you’re saying. But for a person who is now down from $5 to $2.50 to a $100 that is then taxed you’re effectively making less money than you earned. That’s why you can have negative net even while making take home pay.
But think about what might happen if the bill is paid incorrectly in cash. The company will absolutely take cash tips to compensate in the event that you or someone else messed up when counting the cash or giving change or whatever. With tip pools it’s unlikely. But it has happened.
I understand what you’re saying. But for a person who is now down from $5 to $2.50 to a $100 that is then taxed you’re effectively making less money than you earned. That’s why you can have negative net even while making take home pay.
But think about what might happen if the bill is paid incorrectly in cash. The company will absolutely take cash tips to compensate in the event that you or someone else messed up when counting the cash or giving change or whatever. With tip pools it’s unlikely. But it has happened.
Wait, you’re taxed on money you didn’t earn?
It’s technically tax fraud, but yes. You could be.