New regulation in hospitality: the service fee is maximized, the tip goes directly to the servers

By: Trademagazin Date: 2024. 10. 16. 11:25

According to the new decree of the Hungarian government, the service charge in restaurants will be maximized at 12 percent, and tips will be treated separately. The goal is for the tip to go directly to the servers, creating a more favorable tax environment for them, Minister of National Economy Márton Nagy announced at Monday’s press conference. The change is part of a new action plan aimed at the tourism sector, which aims to reduce bureaucracy and increase the competitiveness of hospitality.

The government intervenes in the system

According to the regulation, the service fee cannot be considered a tip and can be a maximum of 12 percent. While tips go directly to servers, the service charge can be used by restaurants to fund wages and benefits. According to Dániel Molnár, senior analyst at the Makronóm Institute, this change can increase transparency and help guests to be aware of the final price of services.

According to previous practice, the service charge was not always clearly indicated on the menu, so it was possible that guests were only confronted with the service charge when they received the bill. This secrecy could lead to abuses, as the service fee could be as high as 20 percent – even if the food was only requested for takeaway and no actual service took place.

With the new regulations, the government wants to make it easier for servers to receive tips directly, who will now be able to receive tips tax-free even when paying cashless. Since modern technologies and the decline in the use of cash have adversely affected servers in many cases, the new regulations may help in this regard as well.

According to Molnár, maximizing the service fee by 12 percent could lead to a price reduction for consumers, since restaurants are unlikely to react to the tightening by raising prices. Those restaurants that used higher service fees until now will now be forced to give up the previous extra income, while those places that have been more moderate so far may even enjoy a competitive advantage.