One of the biggest reasons people want to start a career bartending is because of the money. And its very good money. Stories of bartenders pulling in six figures are not unheard of, and the median pay is reported to be around $24.00. This article will explain not only how much bartenders actually make, but also cover issues with the current state methodology to calculate bartending income and other issues that new bartenders may not understand about how bartenders make money.
To start, Bartenders working in city hot spots regularly pull in six figures a year. Others who work in neighborhood bars tend to make a little less, but will still pull in $15-20 an hour and have the added plus of not having to drive hours to work everyday. Finally, despite not making as much raw dollars as bartenders in high volume places, some of the most prestigious shifts are working in a hotel or other high end corporate chain. These companies typically not only pay a high base salary and allow tips, but they also give benefits like healthcare and matching 401ks to there employees.
So why don't all bartenders make a lot of money?
There are other shifts known as training shifts or the dreaded "Sunday shift" that are almost exclusively reserved for new hires. These are dead shifts where there might be a slow influx of customers and is a manager's tool to get new bartenders familiar with all there POS system, back bar, and where inventory is so that when it is busy they will be prepared. Earnings during this type might drop to minimum wage to $11 an hour. Many new bartenders get stuck on these slower nights for a few weeks before they're allowed to move up and the more prepared you are, the less stuck you will be working in these dead shifts.
The Government is telling me that bartenders are making under $12.00 an hour. How are you coming up with these crazy high numbers?
The Bureau of Labor states that the average wage is $11.59 and it is problematic for those trying to understand the hospitality industry. While the methodology is mostly sound for other industries--specifically ones with salaries, in regards to the restaurant industry it is not 100% perfect nor will it ever be. It is not necessary for employers to give hourly rates and they may report employees despite employees not working a full year. When they do not have specific hourly rates, the Buearu of Labor defaults to a base year of 2040 hours and then takes the average of it. This is incredibly problematic as it is very possible that bartender could be working three days a week or 30 hours a week, but be calculated on a forty hour week methodology.
Next, bartenders are not separated from barbacks in this methodology and barbacks are known to take significantly less money until they move up in knowledge and experience to become a barback.
However, perhaps the greatest discrepancy comes from the tip reporting. The Bureau of Labor requires accurate numbers from state agencies and surveys. However, bartenders typically make around 70-90% of there income in tips. More specifically, the minimum wage in Pennsylvania for a hospitality worker is a paltry $2.83. However, very few restaurant and bars have accurate systems to calculate the tips of all there employees and subsequently, report their earnings to the IRS. Moreover, most bartenders aren't accountants nor do most spend each day plugging in there tips in an excel sheet so they can send the IRS accurate data. Instead, bartenders are only required to fill out an IRS 4070 due on the tenth of every month with the amount they made--weeks after they actually made the money.
The reality of what happens is that most bartenders miscount or lose track of there tips when it's split between other workers or after a very busy day of working. Since the infrastructure isn't completely there in most restaurants, many bartenders and bar owners only follow general guidelines based on gross sales. The gross sales require the employer to report just 8% of the gross sales to the IRS (when people on average tip 18% of the gross sale in America!). Moreover, bars can regularly ask for deductions so that the income recorded in behalf of the employees filed are as low as 6% of the gross receipts!
These huge discrepancies in methodology make it impossible for the government to accurately track the earnings for bartenders!
Rather than looking at bartending through the lens of tax returns, it is easier to understand tips through experience and common sense. For a visual presentation of how bartenders earn money, try using our Prezi!