Gratuity

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Leaving some currency on a restaurant table is a common way of giving a tip to the serving staff.

A gratuity (also called a tip) is a sum of money customarily tendered, in addition to the basic price, to certain service sector workers for a service performed or anticipated. Tips and their amount are a matter of social custom, 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 one of a specific range of monetary amounts or a certain percentage of the bill. In some circumstances, such as with U.S. government workers[1] or more widely with police officers, receiving gratuities (or even offering them) is illegal, as they may be regarded as bribery.[2] A 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.[3]

Etymology and history[edit]

The first usage of the term "tip" in the sense of giving a gratuity dates back to 1706. Pictured here are European waiters from the early 1900s.

According to the Oxford English Dictionary, the word tip originated as a slang term, and its etymology is unclear. According to the Online Etymology Dictionary, the meaning "give a small present of money" began around 1600, and the meaning "give a gratuity to" is first attested in 1706.[4] The noun in this sense is from 1755. The term in the sense of "to give a gratuity" first appeared in the 18th century. It derived from an earlier sense of tip, meaning "to give; to hand, pass", which originated in the rogues' cant in the 17th century. This sense may have derived from the 16th-century tip meaning "to strike or hit smartly but lightly" (which may have derived from the Low German tippen, "to tap") but this derivation is "very uncertain".[5]

The practice of tipping began in Tudor England.[6] "By the 17th century, it was expected that overnight guests to private homes would provide sums of money, known as vails, to the host’s servants. Soon afterwards, customers began tipping in London coffeehouses and other commercial establishments."[6]

The etymology for the synonym for tipping, "gratuity", dates back either to the 1520s, from "graciousness", from the French gratuité (14th century) or directly from Medieval Latin gratuitas, "free gift", probably from earlier Latin gratuitus, "free, freely given" . The meaning "money given for favor or services" is first attested in the 1530s.[4]

In some languages, the term translates to "drink money" or similar: for example pourboire in French, Trinkgeld in German, and drikkepenge in Danish. This comes from a custom of inviting a servant to drink a glass in honour of the guest, and paying for it, in order for the guests to show generosity among each other. The term bibalia in Latin was recorded in 1372.

By region[edit]

Asia[edit]

China[edit]

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.[7]

Hong Kong[edit]

Generally, mid-scale restaurants add 10%, noted as "service charge", but it is not given to the wait staff. It is typically added for dine-in customers, to pay for the seat. However, people might leave the small change left over after paying the bill or tip as a compliment for exceptional service. In budget restaurants, tipping is not expected.

India[edit]

Four cycle rickshaws in India.

Tipping is acceptable but not expected in India. Mostly tipping in employment is given once in a year unofficially to all those who provide service, by the end user as well as employer.

For example, tips may be given during Diwali to watchmen, news paper delivery, laundry, postmen and other service staff by most people annually. Tipping taxi and rickshaw drivers is rare and not expected. Tipping in restaurant or hotel is most common at 1% to 5% of actual amount and tips are not part of the salary.

Israel[edit]

In Israel, tipping in restaurants and bars is expected, usually 10%-15% service charge.[citation needed]

Japan[edit]

A rickshaw operator pulls two guests near Kyoto.

In Japan, tipping is not a part of the culture. Japanese people see tipping as insulting.[8]

Jordan[edit]

In Jordan, tipping is part of the culture, and it has always been used in restaurants, hotels, taxis, hookah lounges, coffee shops and bars; and it is expected if you are a regular, though bars and restaurants may add 5-35% service charge. It is called a tip or baksheesh (Arabic: ْبقشيش), which used to be given to laborers in advance to get better service, or afterwards as an extra reward for their work. It is both illegal and an insult to tip in public and government offices, the police, and the military.[citation needed]

Malaysia[edit]

Tipping is not customary in Malaysia, although guests may pay a little more at their discretion, especially if the service has been particularly good. In established restaurants there is a mandatory 6% government tax and often an additional 10% service charge on receipts.[citation needed]

Singapore[edit]

In Singapore, tipping is not common. Bars and restaurants typically add a 10% service charge although it is not given to the wait staff. Tips are seldom given in a Hawker centre, coffee shop, or taxi.[9]

South Korea[edit]

In South Korea tipping is not customary at restaurants, hotels or for taxi service.

Taiwan[edit]

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.

Thailand[edit]

In Thailand a small tip is often left in restaurants. Taking back small change if you pay with a large bill is somewhat rude. For example if a meal is 950 baht, and one pays with a 1000 baht note, the remaining 50 baht can be left. A strict percentage is not needed.

Turkey[edit]

In Turkey, tipping, or bahşiş (lit. gift, from Persian word بخشش, often rendered in English as "baksheesh") is usually optional and not customary in many places. However, a tip of 5-10% is expected in restaurants, which 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 made to a hotel porter.[10]

Viet Nam[edit]

In Vietnam, normally there is no tipping-especially when eating in street and in cafes, however this may change in big restaurants and hotels.

Europe[edit]

Albania[edit]

Buskers often punctuate their performances with requests for tips.

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. If you don't want to leave money for porters, bellhops and the like, duty-free alcohol is often very welcome – but this must be doled out with discretion, as some people (such as Muslims) may actually find it offensive.[11]

Belgium[edit]

Tips (fooi or pourboire) are not expected in Belgium. When tipping in pubs/restaurant, it will mostly be a simple round up to the nearest integer.[citation needed]

Bosnia[edit]

Tips (bakšiš, napojnica) are not expected in cafes and casual restaurants- especially not from people not earning their own money i.e. students. However, tips are welcome if the service was good- for example if it included free refills or a favor like giving tourist information. Tips between 10%-20% are excepted in more expensive restaurants and hotels. If guests want to tip they either pay the price plus desired tip and say "taman" (no change) or specify how much money they want back if paying with a large bill.[citation needed]

Croatia[edit]

Tips (napojnica, manča, tip) are sometimes expected, mostly in restaurants – but they are not mandatory. Restaurant tip is around 3-5%[12] (or more if you are really satisfied with overall dining experience). In clubs or cafe bars, on the other hand, it is common to "round up the bill". It is not common to tip taxi drivers or hairdressers, but it's up to you.

In tourist countries such as Croatia and Singapore, tips can "open a lot of doors" and surely will leave a good impression, which will be recognized on your next visit.

Czech Republic[edit]

Tips (spropitné, dýško,tringelt) are optional but welcome in taxis, restaurants, and similar services; this usually involves rounding up the bill to the next multiple of ten korun. Payments with credit cards are never tipped. According to Czech law, service must be always included in the bill, however the tip must not be. In Prague and some other cities often visited by the foreigners there are often adapted Western practices and tips about 10% are expected, but not required.[citation needed]

Denmark[edit]

Tips (drikkepenge, lit. "drinking money") are not required in Denmark since service charges must always be included in the bill by law.[13] Tipping for outstanding service is a matter of choice, but is not expected.[14]

Finland[edit]

Tips (juomaraha) are not at all expected in Finland since any service charges must be included in the bill by law. However, people might leave the small change left over after paying the bill or tip as a compliment for exceptional service.

France[edit]

Tips (pourboires) are not expected in France since service charges are included in the bill. However, French people occasionally leave the small change left after paying the bill or one or two euros if they were satisfied with the service quality in some contexts, such as restaurants, hairdressers, deliveries, ...[citation needed]

Germany and Austria[edit]

Coat check staff are usually tipped for their service.

Tipping (Trinkgeld) is not seen as obligatory, as it is in the United States. 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 rarely done, to charge a service fee without the customer's consent. But a tip of about 5% - 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, and often the money is said to be given for a good cause[clarification needed]. Rounding up the bill in Germany is commonplace, sometimes with the comment stimmt so ("keep the change"),[15] 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). A pool of service companies actually uses this for their marketing strategy: Aufrunden bitte[16] ("round up please") and the difference goes to a good cause[clarification needed].

Greece[edit]

In Greece tipping ("Φιλοδώρημα", transl. filodórima, or the loanword "πουρμπουάρ" from French pourboire) is commonplace, but not mandatory. Usually an amount on top of the small change left after paying the bill is left on the table in restaurants or bars. There is no set formula as to the proper amount, but for a large bill the tip is usually larger as well. The setting is also a factor; for instance, dining at an upscale establishment would merit more consideration to the tip than simply having coffee at a café. Common tips for a fast-food delivery may be up to 1 or 2 euros, for a large restaurant order it may be up to 10 or 20 euros but usually not larger.[citation needed]

Hungary[edit]

Strippers are often tipped after their performances.

The Hungarian word for tip is borravaló (literally "money for wine", a loose calque from German: Trinkgeld) or colloquially baksis (from Persian: بخششbakhshesh[17]), 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, also influenced by the satisfaction of the customer.[18]

Depending on the situation, tipping might be unusual, optional, expected or obligatory. Similarly, some employers calculate into the wage that the employee would 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 given percentage regardless 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 its almost boundaryless transition into bribery is considered a main factor contributing to corruption. A particular Hungarian case of gratuity is hálapénz ("gratitude money") or paraszolvencia, which is the very much expected – almost obligatory 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[edit]

In Iceland tipping (þjórfé, lit. "serving money") is not customary and never expected.[19]

Ireland[edit]

Tipping is generally optional but often expected for certain types of services. It's customary to tip for table service in bars and restaurants but not for barmen. People generally tip postal workers and sanitation workers around Christmas time. Services like hairdressing, especially for women, often expect tips. Tips are not based on a percentage of the transaction.

Although it has been cited that tipping for taxis is typical,[20] it is not common in practice.

Italy[edit]

Tips (la mancia) are not customary in Italy, and used only if a special service is given or as thanks for high quality service.[21] Almost all restaurants (with the notable exception of those in Rome)[22] have a price for the service (called coperto) and waiters do not expect a tip but will not refuse it, especially if given by foreign customers. In cafés, bars, and pubs it's not uncommon, on paying the bill, to leave the change saying to the waiter or to the cashier "tenga il resto" ("keep the change"). Recently tip jars near the cash register are becoming widespread,[citation needed] however in public restrooms they are often forbidden.[23] Leaving the change is also quite common with taxi drivers. When using a credit card, it is not possible to add manually an amount to the bill, so it is possible to leave some coins as a tip.[citation needed]

The Netherlands[edit]

Small tips are expected in the Netherlands. When tipping in pubs/restaurant, it will mostly be a simple round up to the nearest integer. Service is included in the given prices and rates, but leaving a 5-10% tip is considered a kind gesture. In some bars and restaurants the workers collect all tips in a jar ("fooienpot") of which each employee gets an equal share.[citation needed]

Norway[edit]

Service/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. Tipping is often practiced as a remark of 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.[24]

Oslo Servitørforbund and Hotell- og Restaurantarbeiderforbundet (The Labor Union for Hotels and Restaurants employees) has multiple times said that they discourage tipping, unless it is a service out of the ordinary, because it makes salaries decreases over time, makes it harder to negotiate salaries and does not count as retirement points, unemployment insurance, loan and other benefits.[25][26][27][28]

Poland[edit]

Tipping in Poland is not obligatory and expected mostly at restaurants with a table service. The amount depends on the quality of the service, and is 10% or more when it was good. Taxi drivers may be often tipped small amounts, to avoid waiting for the change. Government workers (policemen, doctors) will often refuse taking a tip, which might be considered a bribery. It is, however, common practice to leave flowers or sweets for doctors, nurses or teachers on certain occasions (such as leaving the hospital or school).[citation needed]

Portugal[edit]

In Portugal tipping ("gorjeta") is mainly customary in restaurants, taxis, food delivery services, hair sallons and home repair services. Tips are not given based on percentages and are usually small.[citation needed]

Romania[edit]

The tip (bacşiş) is usually 10% of the bill and is expected in restaurants,[29] coffee shops, and taxis.[29]

Russia[edit]

In Tsar Russia tips were well established, partly in order to show wealth and generosity, but was banned in Soviet Union. In modern Russia, this tradition is revived. 10-15 % is normal at better places.

Slovakia[edit]

Tipping is optional and its percentage usually expresses level of satisfaction with a service. Tips (sprepitné) in restaurants, bars and taxis are around 10%. When paying with a credit card tip in form of a cash money is left on the table together with a signed bill.[citation needed]

Slovenia[edit]

Tipping is not common in Slovenia and most locals don't tip other than to round up to the nearest Euro. Recently, areas visited by a large amount of tourists have begun to accept tips at around 10 - 20%.[30][31]

Spain[edit]

Tipping ("propina") is customary but 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 economic status of the customer and on the kind of locale, higher percentages being expected in upscale restaurants. In bars and small restaurants, Spaniards sometimes leave as a tip the small change left in their plate after paying a bill.[32][33] Outside the restaurant business, some service providers, such as taxicab drivers, hairdressers and hotel personnel may expect a tipping in an upscale setting. In 2007 the Minister of Economy Pedro Solbes put the blame on the excessive tipping for the increase of the inflation.[34]

Switzerland[edit]

15% service has been included in menu prices and hence in the bill in Switzerland by law since 1985. Hence tipping is not expected, although it is common for a customer to round-up the bill to the nearest franc for a small amount, or to add a couple of francs (certainly not 10%) to a larger bill.[citation needed] Anything left in addition is a compliment for great service, but not expected.[citation needed]

Sweden[edit]

Tipping (Dricks) is commonly not expected but is practiced as a remark of high quality service or as a kind gesture. Tipping is most often done by leaving small change at the table or rounding up the bill. This is mostly done at restaurants (less often if payment is done at the desk) and in taxi cabs (some taxis are very expensive as there is free pricing, so they might not be tipped). Less often hairdressers are tipped.[35]

United Kingdom[edit]

Golfers often tip the caddies who carry their golf clubs.

Tips of 10% are common in restaurants, but not compulsory. It is a legal requirement to include all taxes and other obligatory charges in the prices displayed. Service charges, which may be expressed as discretionary (although it is very unusual to refuse to pay) or mandatory, are sometimes levied, more often in London and other large cities than in other areas. If a restaurant customer feels the service or product inadequate, he must only pay what he feels is fair value: the restaurant may contest it in court if it chooses, but the customer cannot pay nothing, he must pay what he feels is fair value.[36]

The service charge may be included in the bill or added separately. 12.5% is reported as a common amount.[37]

Tipping for other services such as taxis and hairdressers is not expected, but tips are often given to reward good service. In some large cities it is customary to tip both taxi drivers and hairdressers/barbers.[citation needed]

A tronc is an arrangement for the pooling and distribution to employees of tips, gratuities and/or service charges in the hotel and catering trade. The person who distributes monies from the tronc is known as the troncmaster. When a tronc exists in the UK, responsibility for deducting pay-as-you-earn taxes from the distribution may lie with the troncmaster rather than the employer.[38][39] (The word 'tronc' has its origins in the French for collecting box.) In June 2008, the Employment Appeals Tribunal ruled that income from a tronc cannot be counted when assessing whether a wage or salary meets the national minimum wage as a test case Revenue and Customs Commissioners v Annabel’s (Berkeley Square) Ltd.

North America and The Caribbean[edit]

Tipping is customary in restaurants offering traditional table service. The amount of a tip is ultimately at the discretion of the patron. In buffet-style restaurants where the waiter brings only beverages, 10% is customary.[40]

Canada[edit]

Tipping is practiced in Canada in a similar manner to United States. Quebec provides alternate minimum wage schedule for all tipped employees. Some other provinces allow alternate minimum wage schedule for "liquor servers".[41]

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."[42] Another newspaper refers to this as a tip pool.[43]

"Tipping out the house (the restaurant) is occasionally explained as a fee for covering breakage or monetary error[s]."[43]

A Member of the Ontario Provincial Parliament, Michael Prue, has introduced a Bill in the Ontario Legislature regarding tipping.[44]

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 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, CDN $1.7million was unreported.[45] 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.[46]

Mexico[edit]

A taxi driver waiting for customers

Workers in small, economy restaurants usually do not expect a significant tip.[47] 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,[48] "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.[48][49]

Gratuity may be added to the bill without the customer's consent, contrary to the law,[50] 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.[51]

United States[edit]

A server at Luzmilla's restaurant.

Tipping is a widely practiced social custom in the United States. In restaurants,[52] a gratuity of 15% to 20% of the amount of a customer’s check is customary when good service is provided.[53] Tips are also generally given for services provided in golf courses, casino, hotels, food delivery, taxis, and salons.[54] 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.[55]

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, 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.[56]

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.[57]

Until the early 20th century, Americans viewed tipping as inconsistent with the values of an egalitarian, democratic society.[58] Also, proprietors regarded tips as equivalent to bribing an employee to do something that was otherwise forbidden, such as tipping a waiter to get an extra large portion of food.[58] The introduction of Prohibition in 1919 had an enormous impact on hotels and restaurants, who lost the revenue of selling alcoholic beverages. The resulting financial pressure caused proprietors to welcome tips, as a way of supplementing employee wages.[59]

In spite of the trend toward tipping as obligatory behavior, six states, mainly in the South, passed laws that made tipping illegal. Enforcement of anti-tipping laws was problematic.[58] The earliest of these laws was passed in 1909 (Washington), and the last of these laws was repealed in 1926 (Mississippi).[58]

Hair stylists are among the service workers who are often tipped for their service.

Tips are considered income. The entire tip amount is treated as earned wages are, with the exception of months in which tip income was under $20.[60] According to the IRS, at least 40% of tips to waiters are not reported for taxation.[61]

Tips are normally not stated on the bill, expected to be paid on top of it. Sometimes restaurants specify tips for European guests who are often not used to tips.

Government employees[edit]

The US Government recognizes tips as allowable expenses for federal employee travel.[62] However, US law prohibits federal employees from receiving tips under Standards of Ethical Conduct. Asking for, accepting or agreeing to take anything of value that influences the performance of an official act is generally not allowed. [1][63]

The Caribbean[edit]

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 you tip 10% to 15% if gratuity isn't already included.[64]

Taxation[edit]

Research by tax authorities finds that consistent tax evasion by waitstaff due to fraudulent declaration is a concern in US and Canada. In both countries, tip is a taxable income like any other form of earned income.

IRS Case Study (1991-1992)[edit]

An IRS audit was triggered by major discrepancies between employees' declared tip percentage and percentage from credit card slips maintained by the business. It was discovered that employees of Fior D'Italia in San Francisco were significantly under-reporting their tip income. The average tip amount as computed by IRS through calculating the average of credit card slips for fiscal years 1991 and 1992 were 14.4 and 14.29% respectively. IRS applied those rates toward all sales including cash sales to estimate the actual tip. Reported tip amount was subtracted from estimated amount to estimate tax evasion. In the Fior D'Italia case, the IRS estimated the total tip for FY1991 as $403,726 and unreported portions as $156,545. For FY1992 estimated total was $368,374 and unreported portions $147,529. Calculating from these figures, Fior D'Italia underreported tip income by 38.8% in FY1991 and 40.0% in FY1992.[65]

Amount[edit]
Waiters at the King David Hotel.

There is only limited data available on documented tip data, however based on two audits, the average was in the range of 13.57 to 16%. A case study hosted on Iowa State University's statistics course provided data for a suburban restaurant surveyed early 1990s. The sample size was 244; the mean persons per table was 2.57. The mean tip was $3.00 on a mean bill of $19.78. As such, the mean tip rate was 16.1%, with a standard deviation of 6.1%. Page 7 reports two outliers with a 41% and 71% tip rate on $7.25 and $9.60 bill respectively. Based on histogram shown on page 8, the median tip rate is about 15% with approximate 95% CI of 6 to 26%.[66]

Based on an IRS audit of FIOR D'ITALIA in San Francisco, CA, it showed that for FY1991 and FY1992 actual tip amount was found to be 14.4 and 14.29% respectively. [65] In a 2003 audit conducted in a research report under advise of Ron Worsham at Brigham Young University, it was found that the data collected from sample restaurants had an average tip percentage which ranged from 13.57 to 14.69% between 1999-2002.[67]

Service charges[edit]

Service charges are mandatory payments, typically added by caterers and banqueters. Restaurants commonly add it to checks for large parties.[68] Some bars have decided to include service charge as well, for example in Manhattan, New York.[69] Disclosure of service charge is required by law in some places, such as in State of Florida[70] A standard predetermined percent, often ~18%, is sometimes labeled as a "service charge".[71]

South America[edit]

Argentina[edit]

Tipping is common in restaurants and bars, usually around 10% of the bill when happy with the service received. Leaving no tip when feeling dissatisfied is not uncommon, and the reason is understood. Many restaurants also levy a small fixed cover charge (cubierto; typically no more than 12 Argentine pesos per person). Tips are also usually given for food delivery services and luggage carrying and loading/unloading from buses. Taxi drivers are not tipped.[citation needed]

It is customary to tip the ushers in theaters and opera houses if they hand out programmes.[citation needed]

It is now starting to be a common practice to tip taxi drivers.

Bolivia[edit]

Service charges are included with the bill. A tip of around 5% or so is sometimes given, and is considered polite.[72]

Brazil[edit]

A service charge (gorjeta) of 10% is usually added to a bill at a restaurant that offers table service. The charge is optional but it is very unusual for a customer not to pay it. Some people choose to give a little more for excellent service, but it's never required. It has become more prevalent for nightclubs to also apply a service charge of 10% to the bill at the end of the night, including not just food and drink consumed, but also the entrance charge (which may often be the majority of the cost). Customer are often unaware of this charge, and it is common for the nightclub to remove it upon request. There is rarely any tipping in other situations. It is believed that tips are often not paid out to servers/staff and restaurant owners pocket the money.

Chile[edit]

Tipping is common at restaurants and bars, 10% of the total bill is the usual tip, sometimes tip is included or suggested in the total bill, but it depends entirely if the customer is satisfied with the service granted, and they must say the tipping amount or percentage when paying the bill.

Taxi drivers are not tipped although if heavy luggage and good service are given, tips are often given.

Performers at traffic lights are tipped low amounts, windshield wipers are not tipped..

Hotel room service is not tipped, but cleaning service is left a generous tip when leaving.

Colombia[edit]

You decide how much you want to tip, otherwise they will charge 10%. Most of the times the restaurant doesn't share the full tip received in a month with their employees. Tourists might be expected to tip even more than 10%.

Paraguay[edit]

Service charges are included with the bill, and tipping is uncommon.[72]

Oceania[edit]

Australia[edit]

A young man (in white) caddies the golf clubs of an older golfer.

Tipping is not the norm in Australia. The minimum wage in Australia is generally A$16.37 per hour (A$20.30 for casual employees)[73] and this is fairly standard across all types of venues.

Tipping at cafes and restaurants (especially for a large party), and tipping of taxi drivers and home food deliverers is common, but not an expectation. Such tips are usually around 10%, or for small bills, along the lines of "keep the change".

Tipping staff of any other kind of business is very unusual. 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."[74]

There is concern that tipping might become more common in Australia.[75]

New Zealand[edit]

Tipping is not a traditional practice in New Zealand, though has become more prevalent 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. Where tipping does occur among New Zealanders it is usually to reward a level of service that is 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".[76] 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[77]

South Africa[edit]

Tipping waiters and bartenders is customary, though not mandatory in South Africa. It is customary to leave small change behind from a bill (for example, paying a bill of R17 with a 20 rand note), and in some cases restaurant and bar staff are tipped quite generously for outstanding service. The rule of thumb is a 10% tip for a large bill or a cocktail order, and giving R1 or R2 for a single drink order is customary.

Perspectives[edit]

Inconsistency of percentage-based gratuities[edit]

Crossing sweepers cleared the way for rich people to cross the road without dirtying their clothes, and they were normally tipped for this service. London, 1893. The modern version of this service are squeegee kids who clean windshields during the time vehicles are stopped for traffic lights.

In countries where tipping is the norm, such as in the US, Canada, and in a few countries in Western Europe, some employers pay workers with the expectation that their wages will be supplemented by tips. Some have criticized the inherent "social awkwardness" in transactions that involve tipping, the inconsistency of tipping for some services but not similar ones, and the irrationality of basing tips on price, rather than the amount and quality of service (a customer pays a larger tip to a server bringing him a lobster rather than a hamburger, for example).[78]

Cases where no gratuity is expected[edit]

Tipping may not be expected when a fee is explicitly charged for the service.[3]

Mandatory tipping[edit]

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 has been reported.[79]

Mandatory tipping and voluntary tipping are illegal in some cases: Australian casino employees,[80] and US government employees, for example. Tipping is not generally part of Japanese culture, and can be confusing or offensive.[81] Tipping in China is frowned upon, except for those living in Hong Kong, until 1997 a colony of the United Kingdom, and Macau, previously a colony of Portugal.[82]

In the United States, charges were dropped in two separate cases over non-payment of mandatory gratuity. Courts ruled that automatic does not mean mandatory.[83][84] Some cruise lines charge their patrons $10/day in mandatory tipping; this does not include extra gratuities for alcoholic beverages.[85]

Other concerns[edit]

Bribery and corruption are sometimes disguised as tipping. In some developing countries, police officers, border guards, and other civil servants openly solicit tips, gifts and dubious fees using a variety of local euphemisms.[citation needed]

Other perspectives[edit]

An 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.[86]

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 or her behalf.[87] In some cases, "[c]ompensation agreements [can] increase worker effort...if compensation is ...tied to the firm's success"; one example of such a compensation agreement is waiters and waitresses who are paid tips. [88]

See also[edit]

References[edit]

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  61. ^ IRS Bulletin No. 2002–47, November 25, 2002, presents some examples of tipping discrepancies that led to some investigations.
  62. ^ GSA
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External links[edit]