By Bill Hardekopf for

NEW YORK (TheStreet) -- Many of us don't think twice when we pay for dinner with a credit or debit card and add a couple dollars on the tip line. But what happens to that tip, especially when customers pay with a credit or debit card? How much of the tip does the waiter or waitress actually get?

Before looking at paying by card, it's worth appreciating how tipping affects your servers.

Waiters and waitresses make less than minimum wage because tips are supposed to more than make up the difference. In some states, waiters and waitresses earn half of the minimum wage. According to a 2008 study by the Bureau of Labor Statistics, the median hourly wage (including tips) for waiters and waitresses was $8.01.

Tipping policies vary by restaurant, with not all restaurants passing on the total tip amount to a waiter or waitress. You may be surprised at how many employees get a portion of your tip.

In some restaurants, servers place all of their tips into a tip pool that is distributed among qualifying workers, including employees who don't usually get tips directly from customers.

Restaurants may also use a distribution formula that gives a percentage of the tip to the hostess, bartender and others involved in the dining experience.

At other restaurants, servers distribute tips to others based on net sales. For example, 1% of total net sales could go to the hostess, 1% to the bartender, 1% to the food runner and 0.5% to the busboy.

If the tip is left on a debit or credit card, the server gets the tip when cashing out at the end of the shift, or the tip could be included in the paycheck. Tips on credit cards are reported as income and taxed. Cash tips should also be reported and taxed.

Fees paid to processors such as Visa (V) - Get Report , MasterCard (MA) - Get Report or American Express (AXP) - Get Report can also reduce the tip because some restaurants deduct the processing fee from tips charged to credit cards. This fee can be split between the restaurant and the server or can cost up to 3% if the server has to pay the total fee. Deducting this fee from the tip may seem unfair to the server, but some restaurants view servers as independent contractors and processing fees as part of their cost of business.

Tipping on a card can also affect the customer's bank account. If you use a debit card, banks can place a hold on a card for the expected tip, adding a 20% tip when the card is authorized. This is done before the tip is added by the customer, and the money is frozen until the hold is removed. Removing the hold can take up to 72 hours. If a cardholder is low on funds, this could cause problems with an overdrawn account or declined payment.

—For the best rates on loans, bank accounts and credit cards, enter your ZIP code at