Gratuities?

[GeezerCouple]

4 hours ago, ovccruiser said:

Strangest thing I have witnessed on a Cunard cruise was an American ordering a drink and tipping the wait staff. So he will pay for the drink plus the 15% charge(gratuity) and gave a tip on top. It looked almost like a habit to give the tip.

 

For those of us raised in the USA (or most parts of it?), it *is* a "habit" to tip.

It actually feels strange in a place where tipping isn't just not conventional but it could be considered rude.

 

Do we (DH and I, and many others) like this?  Not at all.  But most of the people who tend to get tipped are not paid what they should be paid.  Why?  Well, now, it's "because they get tips", so it's ended up as a circular explanation.

 

Truly, some workers are paid a pittance, in our opinion anyway.

(I was once "there", so I know... it was almost entirely "tips... or nothing".  I'll never forget - way back circa 1970 - when someone ordered one drink and then tipped me with a $5 bill and insisted I keep it.  I know what that amount meant to me at that time.  So we try to make a point to tip well, when the service warrants, even though the price point has changed.)

 

So in the above case that you mention, it may be an oversight and inadvertant "double tipping", or it may be that the person giving the extra tip is very intentionally trying to help out with wages, etc.

 

GC

[BruceMuzz]

When cruise ship service staff from most countries get cash tips, they pay income tax only on their incredibly small official salaries.

If the "Tips" are included in their salaries, they are taxed on all of it.

 

Almost every cruise ship employee on earth belongs to a maritime labor union.

That union negotiated all the terms of the crewmember's contract, including air tickets, uniforms, medical care, housing and food, salary, tips, length of contract, overtime, salary currency, etc.

Changing even one of those details requires a re-negotiation of the entire labor agreement with the cruise line. The time and money required for the re-negotiation is something most cruise lines do not want to go through. Although it is possible, nobody really wants to do it.

 

Travel agents receive a percentage of the cruise fare for booking a cruise for you.

The more items included in the total fare, the more money the cruise line has to pay the Travel agent.

Cruise lines will go to any lengths to avoid increasing the amount of money they need to pay the travel agents.

Adding the "gratuities" to your fare would nearly force the cruise lines to give a higher percentage of your fare payment to the travel agent, cutting into the cruise lines' bottom line. 

[LHT28]

I would  think  the  included gratuities  would be part of the  NCF  like port taxes  so TA's would not be getting commission on  those ??

[ovccruiser]

2 hours ago, BruceMuzz said:

When cruise ship service staff from most countries get cash tips, they pay income tax only on their incredibly small official salaries.

If the "Tips" are included in their salaries, they are taxed on all of it.

Where would the Tax liability be paid, country of birth of the crew, registration country of the ship, os where the ship is owned? In order to pay the tips to the crew, the cruise line would also need to show the income to cover the tips of course. Is it possible the crew are responsible for their own tax liabilities and are paid gross with no tax deductions, otherwise their "board and lodging" whilst on a cruise would also be a liability as "gift in kind" as it is termed in the UK. 

[BruceMuzz]

21 minutes ago, ovccruiser said:

Where would the Tax liability be paid, country of birth of the crew, registration country of the ship, os where the ship is owned? In order to pay the tips to the crew, the cruise line would also need to show the income to cover the tips of course. Is it possible the crew are responsible for their own tax liabilities and are paid gross with no tax deductions, otherwise their "board and lodging" whilst on a cruise would also be a liability as "gift in kind" as it is termed in the UK. 

The tax laws vary by country of course. But in countries like Philippines and Indonesia, crew are often legally required to send part or all of their earnings home through their agency, where typically a bit of monkey business with exchange rates happens, and then the government takes a piece as well.

[BruceMuzz]

39 minutes ago, LHT28 said:

I would  think  the  included gratuities  would be part of the  NCF  like port taxes  so TA's would not be getting commission on  those ??

The included gratuities would be part of NCF if the cruise lines had their way. But that sort of thing creates a negative atmosphere between the agencies and the cruise lines; something the cruise lines are desperately trying to avoid.

[Heidi13]

5 hours ago, ovccruiser said:

Where would the Tax liability be paid, country of birth of the crew, registration country of the ship, os where the ship is owned? In order to pay the tips to the crew, the cruise line would also need to show the income to cover the tips of course. Is it possible the crew are responsible for their own tax liabilities and are paid gross with no tax deductions, otherwise their "board and lodging" whilst on a cruise would also be a liability as "gift in kind" as it is termed in the UK. 

 

Seafarers normally pay taxes in their country of residency and being a global industry, some seafarers have options in selecting a country of residency. Some country tax codes are more preferential to seafarers, so those of us with options, will use them to advantage.

 

While still working for P&O Cruises, but taking leave in Canada, I elected to remain a UK resident, as the tax laws are very favourable for seafarers. Provided you are out of UK for 6 months (in those days), you paid the "Stamp", but no tax. Whereas, Canada taxes on your entire worldwide income.

 

Our son, who has left cruise ships for working on the largest mega yachts does exactly the same. As a dual citizen, he uses UK as his residence.

[NoBoozeCruise]

Interesting misinformation.

 

 

[notalandlover]

On 9/4/2023 at 11:09 AM, Heidi13 said:

 

Not aware of any list, but you can generally go by the target market and in addition luxury/premium cruise lines often include gratuities in the base fare.

 

In the UK and Australian/NZ markets, included gratuities is the norm on ships based in those markets. Some of the American based cruise lines have tried to change the UK market to the US model, such as Carnival adding gratuities with P&O. It was a spectacular failure, so they had to revert to the British model of including in the base fare.

 

If you are a Brit or Aussie/NZ, most of the British based cruise lines have them included (exception being Fred Olsen), but the US based ships repositioning to Europe will not. In Australia/NZ, P&O Australia and the Princess ships that operate year-round will have them included. 

PCL added grats to me last yr when I did the British Isles cruise out of Southampton 

[Toofarfromthesea]

6 hours ago, NoBoozeCruise said:

Interesting misinformation.

 

 

 

Why do you call the experiences of people who work or have worked for cruise lines misinformation?  And don't specify what it is you are calling misinformation, or which post?  Or are we just stirring things up?

[Heidi13]

 

7 hours ago, NoBoozeCruise said:

Interesting misinformation.

 

 

I look forward to you outlining exactly what misinformation was provided.

 

Assuming you are making reference to the previous post, which i note isn't speculation, but actual facts from personal experience. I spent 40 yrs at sea on both British and Canadian ships and our son already has 20 yrs at sea, on British (Bermuda) and various FoC vessels/mega yachts.

 

So my post is based on a combined 60 years of seafaring, and how the tax system applied to us as dual citizen seafarers.

[Heidi13]

3 hours ago, notalandlover said:

PCL added grats to me last yr when I did the British Isles cruise out of Southampton 

 

Affirmative, as Princess are not a British based cruise line. Had you booked a similar cruise with sister company P&O, they would be included in the base fare.

[MBP&O2/O]

WhenI worked for P&O we had an optional 'overseas contract' which basically said you joined a ship for a minimum 12month voyage and as that ship was not scheduled to return the UK within that period then you were exempt from all income tax, and it was not taken from your salary.

All well and good but one ship I was on did exactly the opposite ....we came back to the UK and all non-taxable income was then subject to back tax. Caused absolute mayhem!

[Heidi13]

5 hours ago, MBP&O2/O said:

WhenI worked for P&O we had an optional 'overseas contract' which basically said you joined a ship for a minimum 12month voyage and as that ship was not scheduled to return the UK within that period then you were exempt from all income tax, and it was not taken from your salary.

All well and good but one ship I was on did exactly the opposite ....we came back to the UK and all non-taxable income was then subject to back tax. Caused absolute mayhem!

 

Yes, I recall hearing similar stories from other P&O cargo ship officers on foreign-service contracts. When on a regular contract, I still paid the tax, but when I didn't visit UK I claimed it all back. Unfortunately the foreign service contract wasn't available to Pax Division Officers, as we were on standard 4-month voyages, with 2-off.

 

Our son uses a UK accountant for his tax filing, so not sure if he pays up front and then claims it back, or if he only pays "Stamp" or whatever the new name is.

 

 

[chengkp75]

Just like anyone else who is employed as an expat, the crew are liable for taxes in their country of residence (though some expats are also liable in the country they work in).  As BruceMuzz has said, in the Philippines and Indonesia, any compensation the crew receives, whether it is called "gratuities" or "DSC", or whatever, if it is collected by, and distributed by the employer, it is taxable income.  The only non-taxable gratuities are those received directly from the customer.

[ilikeanswers]

It would be nice if cruise (and I would also add airlines to this pet peeve) websites clearly listed all the additional payments. One of the things I hate is having to do a mock booking just to discover the additional payments. A simple drop down box with all the listed prices of add ons displayed on the selection page would make working out the total cost of a cruise or flight much less tedious. 

Edited September 22, 2023 by ilikeanswers

[sanger727]

On 9/17/2023 at 7:47 AM, BruceMuzz said:

When cruise ship service staff from most countries get cash tips, they pay income tax only on their incredibly small official salaries.

If the "Tips" are included in their salaries, they are taxed on all of it.

 

 

I've heard this before but don't think it's a factor. In the US you are certainly taxed inclusive with your tips. The only reason people say they don't pay taxes on their tips is if they don't report them - which is tax fraud. It's hard to believe that other countries wouldn't tax the full income. 

[Peter Lanky]

The original question was a fair one, and it is important to some people that the price advertised is the price paid, and I am one of them. The tax implications, how the staff is paid, and how the calculation of the price is arrived at is of no importance to many. If I am buying a car, that is what I am buying: a car, not paying extra to have it assembled, and the same applies to cruises: I am buying a cruise in full.

 

Now I know there are people out there that like to hand over money, whether discretely of publicly, and that is their prerogative, but some people don't want to, and should not be hounded for thinking in any way. These are not tight, mean, cheap or any of the other terms often used, but simply realistic.

 

So to answer the question, I know that the luxury cruises, Seabourn, Silversea and Regent, as well as Azamara advertise the correct price, and also Marella and P&O. I also believe Crystal and Saga do the same. I'm sure there are others, but I have not researched them.

[Toofarfromthesea]

8 hours ago, sanger727 said:

 

I've heard this before but don't think it's a factor. In the US you are certainly taxed inclusive with your tips. The only reason people say they don't pay taxes on their tips is if they don't report them - which is tax fraud. It's hard to believe that other countries wouldn't tax the full income. 

 

Except it has been confirmed here many times by people who know.  It's a little provincial (arrogant?) to think other countries might do things differently than the US.