Tipping varies extensively among cultures. Though by definition a tip is never legally required, and its amount is at the discretion of the patron, for travellers it can cause some serious dilemmas.
Understand
A gratuity (also called a tip) is a sum of money customarily given by a client or customer to a service worker in addition to the basic price. Tipping is commonly given to certain service sector workers for a service performed, as opposed to money offered for a product or as part of a purchase price. Depending on the country or location, it may or may not be customary to tip servers in bars and restaurants, taxi drivers (including ridesharing), hair stylists and so on. The exchange is typically irreversible, differentiating it from the reward mechanism of a placed order, which can be refunded.
Tips and their amount are a matter of social custom and etiquette, and the custom varies between countries and settings. In some locations tipping is discouraged and considered insulting, while in some other locations tipping is expected from customers. The customary amount of a tip can be a specific range of monetary amounts or a certain percentage of the bill based on the perceived quality of the service given.
In some circumstances, such as with U.S. government workers and more widely with police officers, receiving gratuities (or even offering them) is illegal; they may be regarded as bribery. A fixed percentage service charge is sometimes added to bills in restaurants and similar establishments. Tipping may not be expected when a fee is explicitly charged for the service.
From a theoretical economic point of view, gratuities may solve the principal–agent problem (the situation in which an agent, such as a server, is working for a principal, such as a restaurant owner or manager) and many managers believe that tips provide incentive for greater worker effort. However, studies of the real world practice show that tipping is often discriminatory or arbitrary; workers receive different levels of gratuity based on factors such as age, sex, race, hair color and even breast size, and the size of the gratuity is found to be only very weakly related to the quality of service.
Reasons for tipping
Tipping researcher Michael Lynn identifies five motivations for tipping:
Showing off
To supplement the server’s income and make them happy
For improved future service
Avoid disapproval from the server
A sense of duty
In countries such as Australia and Japan where no tipping is provided, the service is found to be as good as in America.
A 2009 academic paper by Steven Holland calls tipping “an effective mechanism for risk sharing and welfare improvement” which reduces the risk faced by a service customer, because the customer can decide whether or not to tip. Tipping is sometimes given as an example of the principal-agent problem in economics. One example is a restaurant owner who engages servers to act as agents on his behalf. In some cases, “ompensation agreements increase worker effort if compensation is tied to the firm’s success” and one example of such a compensation agreement is waiters and waitresses who are paid tips. Studies show however that, in the real world, the size of the tip is only weakly correlated with the quality of the service and other effects dominate.
Mandatory tipping
Tipping may not be expected when a fee is explicitly charged for the service. A service charge is sometimes added to bills in restaurants and similar establishments. Attempts to hide service charge by obstructing the line on the receipt have been reported.
In the United States, criminal charges were dropped in two separate cases over non-payment of mandatory gratuities. Courts ruled that automatic does not mean mandatory. Some cruise lines charge their patrons $10/day in mandatory tipping; this does not include extra gratuities for alcoholic beverages.
Attitudes towards tipping
In some circumstances, failing to give an adequate tip when one is expected to is a serious faux pas, and may be considered very miserly, a violation of etiquette, or unethical. In some other cultures or situations, giving a tip is not expected and offering one would be considered at best odd and at worst condescending or demeaning. In some cultures it might be seen as a bribe, and in some circumstances (for example tipping government workers), tipping can even be illegal and prosecutable as a serious crime.
In countries where tipping is not customary, attitudes towards the practice can differ. For instance, in Hong Kong or Australia, while tipping is generally not practiced by the locals and not expected, it is still welcome by service staff should you decide to tip. On the other hand, in Japan and South Korea, tipping is seen as an insult, and attempts could offend your server. Additionally, in many places (Russia is one), foreigners who are perceived to be from countries where tipping is widespread (such as the U.S. or Canada) may be expected to tip even if locals aren’t, and they may even encounter hostility if they fail to do so. In Malaysia and Singapore, hotels and restaurants may include a 10% “service charge” before tax in the bill that one is expected to pay, but otherwise tipping is not customary nor expected, and may actually be prohibited at Singapore’s Changi Airport.
In countries where tipping is expected, complicated unofficial standards and customs have developed over the exact percentage to tip, and what should and should not be included in this calculation. In other countries and cultures the topic is way more relaxed.
It is not easy for the traveler to know what to expect when they go to a foreign country—sometimes the rules are so arcane even locals have a hard time keeping it all straight. While in some cases you as a visitor from a foreign country might be given a certain limited degree of leeway, no one—especially in countries where the law allows employers to pay tip-earning workers lower wages—has complete carte blanche to ignore the rules. It therefore behooves overseas tourists to learn at least the basics of tipping custom in the country they are visiting. (Conversely, if you’re a foreigner in a tip-expectant country, you can even work the system to your advantage: locals might assume foreigners will tip less than they should, and if you surprise them by tipping appropriately you may get even better service than a local would get by giving the same amount!)
Worker payment and tipping
In most countries, service personnel get paid enough to live on and thus do not have to rely on tips. While intentions are clearly good, tourists from some places (North America especially) are sometimes not aware of this—or they may simply feel bad not tipping—and they export their generous behavior to other countries where tipping is traditionally not customary. Of course, this is quickly accepted (how would you react if someone gave you extra money?) and creates expectations that did not exist before. In some places, this may also lead to the phenomenon of American tourists getting shoddier service than locals, because it’s assumed they’ll leave a tip regardless.
If you are tipping in a foreign country, it’s best to think in terms of what the amount means for the recipient, rather than how much (or how little) it is for you. In some countries, people occasionally get tipped a month’s salary in one go. While this definitely is cool for them, it can cause serious trouble. Think about a waiter earning more than the chief of police…
Another problem is that, even if tipping was originally intended to improve service, some employers use it to underpay workers with the expectation that tips will make up the difference. A prototypical example is the American restaurant industry, where the “service wage” can amount to as little as one-quarter of the minimum wage in other sectors of the economy, as well as places like Namibia where it’s common practice even at government-owned facilities. There is no guarantee the recipient even gets to keep the money; some employers may split tip revenue between large groups of workers (as a pretext to pay a lower wage to all of them) or, where legal safeguards are weak, even pocket a significant percentage for themselves.
Use of tipping as a de-facto commission on sales in restaurants, with a corresponding reduction in workers’ base pay, has unpredictable impacts on how much servers get paid. On a slow night, servers make little or may even be sent home early. Conversely, tipped servers in an overpriced establishment in a busy location stand to profit more with a palm outstretched for gratuities than if they were simply making an honest, predictable fixed wage. These wide variances have little to do with the quality of the service offered, but serve as a means for the restaurateur to shift commercial risks (of wage costs which would otherwise be incurred even when business is slow) onto the workers.
Tipping is also an end-run to avoid taxes, which may be another reason for tips spreading into previously tip-free areas. While there often are technical rules that make income from tips subject to the same taxes as other income, it is hardly if ever reported and thus tips are most often de facto tax-free (especially if given in cash). Exceptions include the United States, where the federal Internal Revenue Service assumes that all waitstaff receive tips and penalizes those who fail to report any; even so, it’s very much the rule rather than the exception for U.S. restaurant workers to deliberately underestimate their cash-tip earnings and pocket the (often substantial) difference tax-free.
In countries where tipping is widespread, a restaurateur who quotes an inclusive price (with the various sales taxes and a fair wage for the workers already reflected) would be placing themselves at a severe competitive disadvantage. Their rivals would appear to be cheaper by quoting a moderate initial price, then raising that price to add taxes later (at up to 15% in some jurisdictions), then soliciting tips (which can add another 15% or more). At the individual establishment level, any experiments in all-inclusive pricing will therefore be ill-fated and short-lived.
Services for which tipping might be customary
Food at restaurants, for table service or food delivered, but not for takeaway, fast food or cafeteria fare.
Alcoholic beverages in bars
Hotels; opinions vary but this may include housekeeping, room service, porters, and shuttle drivers
Taxicabs and rideshare service (Uber, Lyft, etc.). It may also be appropriate to tip the person who calls or hails the taxi for you.
Some organized private transportation such as shuttles or boats
Tour guides
Toilet attendants, although adding attendants to washrooms primarily to solicit gratuities may be controversial
Gambling
At the airport, for basically anyone other than you who helps you move your luggage
Parking valets
Beauty salons and barbershops
Massages
Tattoo parlors
Grocery store baggers
By region
Africa
Nigeria
In Nigeria tipping is not so common at upscale hotels and restaurants because service charge is usually included in the bill though the employees seldom get this as part of their wages. In recent times however, the service provider usually coerce the customer for tips in a subtle manner. There have been reported cases of security guards asking bank customers for tips.
Asia
China
In China, traditionally there is no tipping. However, hotels that routinely serve foreign tourists allow tipping. An example would be tour guides and associated drivers.
Hong Kong
In Hong Kong, tipping is not typically expected at hotels or restaurant establishments, where a “service charge” of 10% is added to a bill instead of expecting a gratuity. Taxi drivers in Hong Kong may also charge the difference between a fare and a round sum as a “courtesy fee” to avoid making change for larger bills.
Japan
Tipping culture is not practiced in Japan and may cause confusion or insult if attempted without utilizing an envelope. Like many other countries in East Asia, Japanese people see tipping as insulting. But it’s mostly because the Japanese traditionally accept tips in specialized envelopes.
India
In India tipping is not normal in hotels and restaurants. But if given it is appreciated. If eating a casual meal—breakfast or snack—with a bill total less than IN₹300, then a 10% tip is expected and appreciated. If small bills are handy, tip can be in multiples of IN₹10 notes.
Indonesia
In Indonesia tipping is common in large tourist areas, such as Bali or Lombok. 10% gratuity is expected at full-service restaurants. Bar tipping is discretional and depends on the style of a bar: in Bali, most bars are owned by expatriates and, normally, expat’s country of origin reflects the style of a bar. Pubs do not expect tips. Restaurants – 10% to 15%. High end bars accepts over-the-counter cash tips in any amount. Massage parlous, which are located practically on every corner in Bali, expect 10–20%. Taxi drivers expect 5%. Bellboys at high end hotels expect around $1 per bag.
Malaysia
In Malaysia tipping is not the norm and is not expected in any service. Instead restaurants can add a service charge of 10% to the bill. In Malaysia the people are familiar with tipping, so if a person does leave a tip then it is accepted and appreciated. When tipping occurs it is usually done by rounding up the bill.
South Korea
Tipping is not customary in Korean culture, and tipping is not expected in general service industry. Some people even regard tipping as an inappropriate behavior. High-end hotels and restaurants often include service charge between 10% to 15%, but it is always included in the bill and customers are not expected to leave separate gratuity for servers beyond what is included in the bill.
Singapore
In Singapore, tipping is not practiced and is rarely expected in most instances. However, bars and restaurants typically add a 10% service charge, which is compounded by the 7% Goods & Services Tax, although it is not given to the wait staff. Taxi drivers given a tip will mistake it for excess cash and return exact change.
Taiwan
In Taiwan, tipping is not customary, but all mid and high end restaurants include a mandatory “10% service charge”, which is not given to the service staff, but rather considered by Taiwanese law as general revenue, as reported by the Taipei Times in “False Gratuity” on July 9, 2013.
Europe
Albania
Tipping (bakshish) in Albania is very much expected almost everywhere. In recent times it has become more common, as many foreigners and Albanians living abroad visit Albania. Leaving a tip of around 10% of the bill is customary in restaurants; even porters, guides and chauffeurs expect tips. Duty-free alcohol is often used as a type of tip for porters, bellhops and the like, however some people (such as Muslims) can find it offensive.
Austria
Tipping is not required but often expected, particularly in restaurants where roughly 5 to 10% is common. This belongs to the service one got and the restaurant level (low, medium, high prices). In standard restaurants it is OK to round up to the next Euro. By tipping roughly 5% one can’t be wrong in bars or restaurants. Taxi bills might be just rounded up to the next Euro. Another common setting where tipping is customary is taxis.
Croatia
Even though most people in the service industry are paid a living wage, tips (in Croatian: napojnica, manča) are quite common. 10% (or more, depending on the service) is expected in restaurants. Absence of a tip is generally interpreted as not being satisfied with the food and/or service. In clubs and café bars, it is common to round-up the bill (i.e. 10 if the bill is more than 5 kn, or 100 if the bill is 88 kn). Tips are always expected in cash, even when the bill is paid by a credit card, If you leave a tip with a credit card, please note that the employee does not receive any of it. It is not common to tip hairdressers, but the rounding-up method is common for taxi drivers.
Denmark
Tips (drikkepenge, lit. “drinking money”) are not required in Denmark since service charges must always be included in the bill by law. Tipping for outstanding service is a matter of choice, but is not expected.
Finland
In Finland tipping is not customary and never expected.
France
Tipping in France is not required, and what one sees on the menu is what one get charged. Waiters are paid a living wage and do not depend on tips. Cafés and restaurants include a 15% service charge on the bill, as required by French law for tax assessment. Service compris indicates that the tip has been added to the bill, but sometimes the wait staff do not receive any of it (it is split between the wait staff and sometimes the restaurant owner can keep a portion of it). Tipping is better received in venues accustomed to tourists, but can be treated with disdain in smaller food establishments and those in more rural areas. The amount of the tip is also critical. A 5% tip will do nicely for good service. For superior service in higher-end eating establishments, a more generous tip would not be out of place. However, the rare waiter/waitress accustomed to more generous foreign customers has no problem receiving a tip of up to 10% or more. A tip in cash rather than on a credit card may be preferred. Attending a performance in a private theater may be the only case in France where a tip is expected (generally €1), even though it is illegal.
Germany
Tipping (Trinkgeld) is not seen as obligatory. In the case of waiting staff, and in the context of a debate about a minimum wage, some people disapprove of tipping and say that it should not substitute for employers paying a good basic wage. But most people in Germany consider tipping to be good manners as well as a way to express gratitude for good service.
It is illegal, and rare, to charge a service fee without the customer’s consent. But a tip of about 5% to 10%, depending on the type of service, is customary. For example, Germans usually tip their waiters but almost never the cashiers at big supermarkets. As a rule of thumb, the more personal the service, the more common it is to tip. Payments by card can include the tip too, but the tip is usually paid in cash when the card is handed over.
At times, rather than tipping individually, a tipping box is set up. Rounding up the bill in Germany is commonplace, sometimes with the comment stimmt so (“keep the change”), rather than asking for all the change and leaving the tip afterwards. Or the customer says how much he will pay in total, including the tip: thus if the basic price is €10.50, the customer might, rather generously but not unusually, say zwölf (“twelve”), pay with a €20 note and get €8 in change. When paying a small amount, it is common to round up to the nearest euro (e.g. €1.80 to €2.00).
Sometimes a sign reading Aufrunden bitte (“round up please”) is found in places where tipping is not common (like supermarkets, or clothing retailers). This requests that the bill be rounded up to the nearest €0.10. This is not to tip the staff, but a charity donation (fighting child poverty), and completely voluntary.
In Germany tips are considered as income, but they are tax free according to § 3 Nr. 51 of the German Income Tax Law.
Hungary
The Hungarian word for tip is borravaló (literally “money for wine”, a loose calque from German: Trinkgeld) or colloquially baksis (from Persian: بخشش bakhshesh), often written in English as backsheesh. Tipping is widespread in Hungary; the degree of expectation and the expected amount varies with price, type and quality of service, and also influenced by the satisfaction of the customer. As in Germany, rounding up the price to provide a tip is commonplace.
Depending on the situation, tipping might be unusual, optional or expected. Almost all bills include a service charge; similarly, some employers calculate wages on the basis that the employee would also receive tips, while others prohibit accepting them. In some cases a tip is only given if the customer is satisfied; in others it is customary to give a certain percentage regardless of the quality of the service; and there are situations when it is hard to tell the difference from a bribe. Widespread tipping based on loosely defined customs and an almost imperceptible transition into bribery is considered a main factor contributing to corruption. A particular example of a gratuity is hálapénz (“gratitude money”) or paraszolvencia, which is the very much expected – almost obligatory even though illegal – tipping of state-employed physicians. (Hungary’s healthcare system is almost completely state-run and there is an obligatory social insurance system.)
Iceland
In Iceland tipping (þjórfé, lit. “serving money”) is not customary and never expected. Foreign tourists sometimes still tip without thinking because that is the custom in their home country. Tourist guides in Iceland also sometimes encourage their guests to tip them, but there is no requirement to do so.
Ireland
It is uncommon for Irish people to tip taxi-drivers or cleaning staff at hotel. Tips are often given to reward high quality service or as a kind gesture. Tipping is most often done by leaving small change (5–10%) at the table or rounding up the bill.
Although it has been cited that tipping taxi drivers is typical, it is not common in practice.
Italy
Tips (la mancia) are not customary in Italy, and are given only for a special service or as thanks for high quality service, but they are very uncommon. Almost all restaurants (with the notable exception of those in Rome) have a service charge (called coperto and/or servizio). As restaurants are required to inform you of any fees they charge, they usually list the coperto/servizio on the menu.
Netherlands
Tipping (fooi) in the Netherlands is not obligatory; it is illegal, and rare, to charge a service fee without the customer’s consent. However, tourists are made to believe[clarification needed] that tipping is required in restaurants, bars, taxis and hotels (bar, restaurant, maids and bellboys). If service was normal or poor, it is normal not to tip, while guests who receive good to excellent service can tip in a 5–15% range, with an average of 10%, and 20% if service was exceptionally good. Around 1970, regulations were adopted that all indicated prices must include a service charge. As a result, all prices were raised by about 15%. This was called “service compris”. Also wages were adjusted so that employees were not dependent on tips.
Norway
The service charge is included in the bill. It is uncommon for Norwegians to tip taxi drivers or cleaning staff at hotels. In restaurants and bars it is more common, but not expected. Tips are often given to reward high quality service or as a kind gesture. Tipping is most often done by leaving small change (5–15%) at the table or rounding up the bill.
Oslo Servitørforbund and Hotell- og Restaurantarbeiderforbundet (The Labor Union for Hotel and Restaurant Employees) has said many times that they discourage tipping, except for extraordinary service, because it makes salaries decrease over time, makes it harder to negotiate salaries and does not count towards pensions, unemployment insurance, loans and other benefits.
Romania
The amount of the tip (bacşiş) and method of calculating it will vary with the venue and can vary from 1–2 RON to 10% of the bill. The tips do not appear on bills and are not taxed. If paying by card, the tip is left in cash alongside the bill. While tipping is not the norm, servers, taxi drivers, hairdressers, hotel maids, parking valets, tour guides, spa therapists et al. are used to receiving tips regularly, and are likely to consider it an expression of appreciation for the quality of the service (or lack of it). If offering a tip, 5–10% of the bill is customary, or small amounts of 5, 10 or 20 RON for services which are not directly billed. For other types of services it depends on circumstances; it will not usually be refused, but will be considered a sign of appreciation. For instance, counter clerks in drugstores or supermarkets are not tipped, but their counterparts in clothing stores can be.
Tipping can be used proactively to obtain favors, such as reservations or better seats. However, care should be taken for it not to be seen as a bribe, depending on circumstances. While tipping is overlooked in Romania, bribery is a larger issue which may have legal consequences. There is an ongoing aversion about both giving and receiving tips in coins, due to the low value of the denominations. It is best to stick to paper money. Offering coins can be considered a rude gesture and may prompt sarcastic or even angry remarks.
On the other hand, the coin handling aversion has resulted in the widespread practice of rounding payments. This is not technically a tip, and as such is not aimed primarily at the individual at the counter, but rather at the business. Nevertheless, if done with a smile it can be seen as a form of appreciation from the customer towards the clerk. Etiquette demands that one of the parties offers the change, but the other can choose to tell them to keep all or part of it. Small businesses may sometimes force the issue by just claiming they are out of change, or offering small value products instead, such as sticks of gum; this is considered rude and it is up to the customer to accept or call them out[clarification needed] for it. The reverse can also happen, where the clerk does not have small change to make for the customer’s paper money, but chooses to return a smaller paper denomination and round down in favor of the customer, in exchange for getting them through faster. The latter usually happens only in the larger store chains.
Russia
In Russian language a gratuity is called chayeviye, which literally means “for the tea”. Tipping small amounts of money in Russia for people such as waiters, cab drivers and hotel bellboys was quite common before the Communist Revolution of 1917. During the Soviet era, and especially with the Stalinist reforms of the 1930s, tipping was discouraged and was considered an offensive capitalist tradition aimed at belittling and lowering the status of the working class. So from then until the early 1990s tipping was seen as rude and offensive. With the fall of the Soviet Union and the dismantling of the Iron Curtain in 1991, and the subsequent influx of foreign tourists and businessmen into the country, tipping started a slow but steady comeback. Since the early 2000s tipping has become somewhat of a norm again. However, still a lot of confusion persists around tipping: Russians do not have a widespread consensus on how much to tip, for what services, where and how. In larger urban areas, like Moscow and St Petersburg, tips of 10% are expected in high-end restaurants, coffee shops, bars and hotels, and are normally left in cash on the table, after the bill is paid by credit card; or as part of cash payment if a credit card is not used. Tipping at a buffet or any other budget restaurant, where there are no servers to take your order at the table (called stolovaya) is not expected and not appropriate. Fast food chains, such as McDonald’s, Chaynaya Lozhka, Teremok and so on, do not allow tipping either. Tipping bartenders in a pub is not common, but it is expected in an up-market bar. Metered taxi drivers also count on a tip of 5–10%, but non-metered drivers who pre-negotiate the fare do not expect one. It should also be noted that the older Russians, who grew up and lived most of their lives during the Soviet era, still consider tipping an offensive practice and detest it. In smaller rural towns, tipping is rarely expected and may even cause confusion.
Slovenia
Tipping is not common in Slovenia, and most locals do not tip other than to round up to the nearest euro. Since about 2007, areas visited by many tourists have begun to accept tips of around 10–20%.
Spain
Tipping (propina) is not generally considered mandatory in Spain, and depends on the quality of the service received. In restaurants the amount of the tip, if any, depends mainly on the kind of locale: higher percentages are expected in upscale restaurants. In bars and small restaurants, Spaniards sometimes leave as a tip the small change left on their plate after paying a bill. Outside the restaurant business, some service providers, such as taxi drivers, hairdressers and hotel personnel, may expect a tip in an upscale setting. In 2007 the Minister of Economy, Pedro Solbes, blamed excessive tipping for the increase in the inflation rate.
Sweden
Tipping (dricks) is commonly not expected, but is practiced to reward high quality service or as a kind gesture. Tipping is most often done by leaving small change on the table or rounding up the bill. This is mostly done at restaurants (less often if payment is made at the desk) and in taxis (some taxis are very expensive as there is no fixed tariff, so they might not be tipped). Less often hairdressers are tipped. Tips are taxed in Sweden, but cash tips are not often declared to the tax authority. Cards are heavily used in Sweden as of the 2010s, and tips paid by cards in restaurants are regularly checked by the tax authority.
Turkey
In Turkey, tipping, or bahşiş (lit. gift, from the Persian word بخشش, often rendered in English as “baksheesh”) is usually optional and not customary in many places. Though not necessary, a tip of 5–10% is appreciated in restaurants, and is usually paid by “leaving the change”. Cab drivers usually do not expect to be tipped, though passengers may round up the fare. A tip of small change may be given to a hotel porter.
United Kingdom
Tipping is not expected in Britain the way it is in some other countries, however for the majority of people tipping is customary as a sign of appreciation. Workers don’t officially have to rely on their tips to live and all staff in the UK must be paid at least the National Minimum Wage, which varies by age, and is £7.38 for those aged 21 and over.
Employers are also banned from topping up wages with tips from customers. However rounding up a bill is acceptable (but not required) at restaurants where you are served at the table, and also for barbers, hairdressers and taxi drivers.
Sometimes, more often in London than in other areas, or at expensive restaurants, a service charge may be included in the bill, or added separately. 12.5% is reported as a common amount. Since it is a legal requirement to include all taxes and other obligatory charges in the prices displayed, a service charge is compulsory only if it is displayed, or the trader makes it clear verbally, before the meal. Even so, if the level of service is unacceptable, and in particular it falls short of the requirements of the Supply of Goods and Services Act 1982, the customer can refuse to pay some or all of a service charge.
North America and the Caribbean
Canada
Tipping is practiced in Canada in a similar manner to the United States. Quebec provides alternate minimum wage schedule for all tipped employees. Some other provinces allow alternate minimum wage schedule for “liquor servers”. According to Wendy Leung from The Globe and Mail, it is a common practice in restaurants to have servers share their tips with other restaurant employees, a process called “tipping out.” Another newspaper refers to this as a tip pool. “Tipping out the house (the restaurant) is occasionally explained as a fee for covering breakage or monetary error.”
A Member of the Ontario Provincial Parliament, Michael Prue, has introduced a Bill in the Ontario Legislature regarding tipping. On December 7, 2015 it was reported that “Ontario is banning employers from taking a cut of tips that are meant for servers and other hospitality staff.” The Protecting Employees’ Tips Act makes it illegal for employers “…to withhold their employees’ tips, except temporarily if they are pooling all of the gratuities to redistribute them among all employees.”
Canadian Federal tax law considers tips as income. Workers who receive tips are legally required to report the income to the Canada Revenue Agency and pay income tax on it. In July 2012, The Toronto Star reported that CRA is concerned with tax evasion. An auditing of 145 servers in four restaurants by CRA mentioned in the report uncovered that among 145 staff audited, C$1.7 million was unreported. In 2005, The CRA was quoted that it will closely check the tax returns of individuals who would reasonably be expected to be receiving tips to ensure that the tips are reported realistically.
Caribbean
Tipping in the Caribbean varies from island to island. In the Dominican Republic, restaurants add a 10% gratuity and it is customary to tip an extra 10%. In St. Barths, it is expected that a tip be 10% to 15% if gratuity isn’t already included.
Mexico
Workers in small, economy restaurants usually do not expect a significant tip. However, tipping in Mexico is common in larger, medium and higher end restaurants. It is customary in these establishments to tip not less than 10% but not more than 15% of the bill as a voluntary offering for good service based on the total bill before value added tax, “IVA” in English, VAT. Value added tax is already included in menu or other service industry pricing since Mexican Consumer Law requires the exhibition of final costs for the customer. Thus, the standard tip in Mexico is 11.5% of the pre-tax bill which equates to 10% after tax in most of the Mexican territory, except in special lower tax stimulus economic zones.
Tips to taxi drivers are unusual in Mexico, but drivers used to ask for them from tourists, knowing that is common in other countries. Locally, taxi drivers are only tipped when they offer an extra service, like helping with the luggage or similar help.
A gratuity may be added to the bill without the customer’s consent, contrary to the law, either explicitly printed on the bill, or by more surreptitious means alleging local custom, in some restaurants, bars, and night clubs. However, in 2012, officials began a campaign to eradicate this increasingly rampant and abusive practice not only due to it violating Mexican consumer law, but also because frequently it was retained by owners or management.
If a service charge for tip (“propina” or “restaurant service charge”) is added, it is a violation of Article 10 of the Mexican Federal Law of the Consumer and Mexican authorities recommend patrons require management to refund or deduct this from their bill. Additionally, in this 2012 Federal initiative to eliminate the illegal add-ons, the government clarified that contrary even to the belief of many Mexicans, that the Mexican legal definition of tips (“propinas”) require it be discretionary to pay so that an unsatisfied client is under no obligation to pay anything to insure the legal definition of a tip is consistent with the traditional, cultural definition, and going as far to encourage all victims subject to the increasing illicit practice report the establishments to the PROFECO, the Office of the Federal Prosecutor for the Consumer, for prosecution.
United States
Tipping is a practiced social custom in the United States. Tipping by definition is voluntary – at the discretion of the customer. In restaurants offering traditional table service, a gratuity of 15–20% of the amount of a customer’s check (before tax) is customary when good to excellent service is provided. In buffet-style restaurants where the server brings only beverages, 10% is customary. Higher tips may be given for excellent service, and lower tips for mediocre service. In the case of bad or rude service no tip may be given, and the restaurant manager may be notified of the problem. Tips are also generally given for services provided at golf courses, casinos, hotels, spas, salons, and for concierge services, food delivery, and taxis. This etiquette applies to bar service at weddings and any other event where one is a guest as well. The host should provide appropriate tips to workers at the end of an event; the amount may be negotiated in the contract.
The Fair Labor Standards Act defines tippable employees as individuals who customarily and regularly receive tips of $30 or more per month. Federal law permits employers to include tips towards satisfying the difference between employees’ hourly wage and minimum wage. Federal minimum wage for tipped employees in the United States is $2.13 per hour, as long as the combination of tips and $2.13 hourly wage exceed the standard minimum wage of $7.25 per hour, although some states and territories provide more generous provisions for tipped employees. For example, laws in Alaska, California, Minnesota, Montana, Nevada, Oregon, Washington, and Guam specify that employees must be paid the full minimum wage of that state/territory (which is equal or higher than the federal minimum wage in these instances) before tips are considered.
A tip pool cannot be allocated to employers, or to employees who do not customarily and regularly receive tips. These non-eligible employees include dishwashers, cooks, chefs, and janitors.
There is only limited information available on levels of tipping. A study at Iowa State University provided data for a suburban restaurant surveyed in the early 1990s. The mean tip was $3.00 on a mean bill of $19.78. As such, the mean tip rate was 16.1%, and the median tip rate was about 15%. In a 2003 research study at Brigham Young University, the sample restaurants had an average tip percentage ranging from 13.57 to 14.69% between 1999 and 2002. A 2001 study done at Cornell University exploring the relationship between tip amount and quality of service has shown that quality of service is only weakly related to the amount the server is tipped by the guest. This study suggests that servers who provide amazing service are tipped marginally better, if not better at all, than servers who provide standard service.
According to the National Restaurant Association, only a handful of restaurants in the United States have adopted a no-tipping model and some restaurants who have adopted this model returned to tipping due to loss of employees to competitors.
South America
Bolivia
Service charges are included with the bill. A tip of around 5% or so is sometimes given, and is considered polite.
Brazil
Most restaurants include a non-obligatory service charge on the bill, which under standard practice is 10% (so much so that “10%” is used in Brazilian Portuguese as a synonym for “tip”). There is no legal obligation to pay and it is not expected by the staff.
Paraguay
Service charges are included with the bill and tipping is uncommon.
Oceania
Australia
Tipping is not expected or required in Australia. The minimum wage in Australia is reviewed yearly, and as of 2017 it was set at A$17.70 per hour (A$22.125 for casual employees) and this is fairly standard across all types of venues. Tipping at cafés and restaurants (especially for a large party), and tipping of taxi drivers and home food deliverers is again, not required or expected. However many people tend to round up the amount owed while indicating that they are happy to let the worker “keep the change”.
There is no tradition of tipping somebody who is just providing a service (e.g. a hotel porter). Casinos in Australia—and some other places—generally prohibit tipping of gaming staff, as it is considered bribery. For example, in the state of Tasmania, the Gaming Control Act 1993 states in section 56 (4): “It is a condition of every special employee’s licence that the special employee must not solicit or accept any gratuity, consideration or other benefit from a patron in a gaming area”. There is concern that tipping might become more common in Australia.
New Zealand
Tipping is not a traditional practice in New Zealand, though has become less uncommon in recent years – especially in finer establishments. Tipping in New Zealand is likely the result of tourists visiting from tipping cultures (such as the United States of America) who may follow their own tipping customs. It is still extremely rare among locals, especially among the working and middle-class. It is expected that employers pay their staff fairly and the minimum wage is regularly raised with public pressure to ensure minimum wage employees have a reasonable standard of living with rising living costs and inflation. Where tipping does occur among New Zealanders it is usually to reward a level of service that is far in excess of the customer’s expectations, or as an unsolicited reward for a voluntary act of service. A number of websites published by the New Zealand government advise tourists that “tipping in New Zealand is not obligatory – even in restaurants and bars. However, tipping for good service or kindness is at the discretion of the visitor”. A Sunday Star-Times reader poll in 2011 indicated 90% of their readers did not want tipping for good service to become the norm in New Zealand.