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Calculating Employee Discounts

post #1 of 20
Thread Starter 

In the restaurant I work in, the owners allow us an $8 allowance for food per shift. If we want, we can use that towards a hookah for our breaks or after shift.


We have great rice bowls that cost $8. Hookas cost $12, and we pay the $4 difference if we use our allowance for that.


My question is from the perspective of the business owner:


Why wouldn't I charge my employees Cost for the items they consume? Why would I charge them in a manner that would be indicative of Loss of Profit?


For instance, isn't it better for the business to charge the cost of the ingredients instead of the menu price? It would seem to be beneficial to mark down a $3-$4 loss, as opposed to an $8 loss.  And, in the case of the hookah (which is ridiculously marked up), I would rather take a $2 hit than charge my employees $4.


How do other restaurants charge their employees' consumption?





post #2 of 20
I've seen this done lots of ways. One place deducted money from your check- about .30¢ an hour, give or take 3$ a day. One place we had a menu of what we were allowed to eat and had to have tickets rung in and voided. My current job, the owner just figures a meal cost for every kitchen employee. Of course this is all kitchen, foh usually gets a discount on whatever they decide to order.
In the end, its all about tracking costs. It's not unusual to track 'free' items at sales price rather than cost. It just helps account for your costs better,I think; maybe someone else can explain that better.
When you say a hookah do you.mean a hookah? Sounds like a hell of a break
post #3 of 20

He may be adding those monies ($8 per employee) into the emp benefit package.

By doing so when it is time to pay the tax man there is a tiny bit more for the company to deduct.

So adding a bit to the bottom line (when employee has to pony up extra $ for meal) plus taking a bit more off taxes is a win-win situation.


One comment... there was a thread about BOH going on strike in hopes of getting their grubby hands on the waitstaff tips.

The free meal for those in the kitchen (waitstaff pays some amt) may calm that beast.

Maybe he will see this and be :D .



post #4 of 20



You can pay someone $8 for their meal or you can deduct $8 from their paycheck.


Which one is it?

post #5 of 20
Man, don't places do staff meal anymore? FOH gets 30 percent off. kitchen staff get staff meal. Most of the time a pasta dish or soup and some hunks of break. Sometimes they are guinea pigs for specials. At the end of the night most leftovers or for the taking.
post #6 of 20
Originally Posted by kuan View Post



You can pay someone $8 for their meal or you can deduct $8 from their paycheck.


Which one is it?


If this was for me.....

A lot of benefits are like Monopoly money.

It is there for the employee to purchase something at the place of employment but never show up on the paper check stub.

Like the discount you may be eligible for if you work at a snazzy department store (like WM ;-)

If I wanted a hamburger and the menu price is $10 (but only "cost" $1.99 to make) then I pony up $2 real currency and pull $8 from my bene package.

The house made one cent from me that day.

Then the next day I ate on the way to work.

The $8 per day food benefit did not get used.... will not accrue... but since it was offered the boss can still claim as a benefit come tax time.

Like when you have sick days (in benefit package) and don't use them by fiscal year end.

I don't know of any business that lets you roll those over (there may be some and good on them,,,).




Comment about paid time off (PTO)...

One of the medical centers I worked for gave you so many hours per year as part of the bene package.

These hours were not designated for anything.

They were were there for vaca, sick time as well as holiday time off.

It was rare for me (as well as my co workers) to call in sick as we saved up that time for killer vacas and longgg weekends lol.

Plus they accrued from year to year.

Smart people at the top were protecting their bottom line as they hardly ever had to call in a temp (a HUGE amt of $$$ for an agency nurse) and this save untold monies.

If they got to a certain amt you were issued a check for the overage  :bounce:


That was a sweet job ;-)





Edited by flipflopgirl - 6/23/14 at 5:01am
post #7 of 20

He is writing off  8.00 per meal per employee as a business expense for tax purposes

post #8 of 20
Originally Posted by ED BUCHANAN View Post

He is writing off  8.00 per meal per employee as a business expense for tax purposes


Exactly ed.

Where has the family meal gone?

Lack of interest?

Too many lost hours on the clock?



post #9 of 20
How bigs the family?
What hours is the kitchen open?
If its three guys per shift and kitchen doesnt close its not the best solution, i think
post #10 of 20
Thread Starter 

Kitchen open Mon-Sun 12p-9p.


One cook per shift Mon-Fri, 2 cooks all day Sat and Sun.


One chef, three cooks.

post #11 of 20
No family, thats why no family meal!
post #12 of 20
Originally Posted by ED BUCHANAN View Post

He is writing off  8.00 per meal per employee as a business expense for tax purposes


He can't do that unless he's actually spending those $8.

post #13 of 20

At my restaurant we've tried a few different strategies over the years and settled in on a 50% employee discount across the board. Pretty straightforward and it seems to work for us.

post #14 of 20
Originally Posted by kuan View Post


He can't do that unless he's actually spending those $8.

Right. You can't write off lost sales as an expense, just the COGS of them. Also, if an audit were to come around, the tax auditor would actually expect to see those meals rung up through the POS, house accounted, and the sales tax for those meals sent to the State. 

post #15 of 20
Originally Posted by kuan View Post
Originally Posted by ED BUCHANAN View Post

He is writing off  8.00 per meal per employee as a business expense for tax purposes


He can't do that unless he's actually spending those $8.


He IS spending...... the $10 hamburger is rung up .... I use $8 Monopoly $$ (daily benefit package) and paid $1.99 from my pocket.

Since the actual cost of said employee meal was $1.99... the food cost was covered, the sale was documented, and the employer was able to claim that $8 as employee benefit.

One question tho... is the $8 benefit supposed to be added onto the employee's federal income taxes?




This thread was not only hijacked but is now FUBAR.



post #16 of 20

If the $8 is a benefit then it is considered compensation and subject to the same rules.  You pay all applicable taxes as an employee and an employer.  If this is the case then it's fine.  Employee just buys a meal and kicks in the extra couple bucks.


If the $8 is deducted as an expense then it is only allowable for the actual food cost.  You cannot deduct against the menu pricing.  You cannot ring up a $35 item where the food cost is $8. That's $27 worth of cheating.  If this were the case you could just mark up everything some stupid amount and declare a loss for the difference and pay yourself some silly salary for doing no business.


The rules are clear to me. 

post #17 of 20

At my current restaurant, all BOH can eat whatever they want, as much as they want, as long as they (or at least try to) write it down on the shrink/waste log. FOH gets half off and has to ring in a ticket.


At a previous restaurant--there was a period where the chef just made an employee meal for everyone who wanted one. Then they made a short menu that was 50% off for all staff, or 25% any other menu item (not on the 50% menu).

At another one (relatively small operation and family owned though), you are only allowed ~3.5oz (closer to 4) of protein, and whatever else starch/veggies you want.

post #18 of 20
Thread Starter 

This thread is very interesting. Many angles.


So, is it a matter of accounting style or regulations that SHOULD be considered when doing this?


It sounds as if ethics may even be a factor...

post #19 of 20
The fundamental thing is accounting for what gets eaten, then probably you turn it to your advantage if you can. Ethics... well, they're restaurant owners, so i don't know how far you go down that one. Some are better than others- a lot better...
post #20 of 20

When i worked at Piato in Ohio   BOH got .10% withheld from thee post tax pay. for food  We had Family meal once a day it was held between shift changes if you where late then you didn't get it and if you left early then you didn't get it.

FOH did not get Family meal they got 40% of Select Menu Items.

All FOH and BOH  where allowed to make reservations for their Family to come in and eat a Meal once a month for free but could only order of a Prix Fix  set menu. and never on Friday-Saturday 

Basically because your family had to come with you max of 4 people  and you where never lucky enough to have a Friday or saturday off unless you where about to be fired or they wanted you to quite. 


the Lobster bar said they where going to do Family meal for us but it only ever happened once in the 4 months i was their 

and that was after we complained about it and said something we showed up the next day and the Chef's made us a great dinner we ate then we worked.

a few weeks went buy nothing everyone just started making their own stuff at the line to eat. Got so bad that people where screwing up dishes on purpose to make it so they would not pass the expediters approval and then we would have free food to eat.


also each  Executive Souc Chef  Souc chef , cook 1 cook 2 cook 3  had authority to put up to 100 dollars of cost out for comps each evening to regulars as a thank you for coming.

needless to say these comps would get written up and marked off but never made it past the BOH staff the cooks 1 2 & 3 and the two chefs always made shur the ones below each other got food and had a reason to do their job good because they didn't like how some things where being run by the owner and the Executive chef 

they realized you had to take care of your people or they won't take care of you. 

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