Tipping Etiquette: Do You Tip on Tax?
I have always tipped on the total bill and it wasn’t till starting this series that I learned that there are people who don’t. Of all the things people say you’re not supposed to tip on this loophole made the most convincing argument.
First off, a little restaurant economics, and Vixen, feel free to correct me. A servers’ income is taxed on her sales, which is assumed to be 8% after tip outs. The sales tax is also based off the same items the servers are taxed on. In essence that line item is not a sale and therefore not income. From an accounting perspective, there is no obligation that one should have to tip on this amount.
But as the Straight Dope response so aptly illustrates, people get a little touchy when you talk about reducing a tip:
“The bottom line is: The cost-less-tax thing is a [BLEEP] argument so you can be a cheapskate. You’re talking about an extra quarter or buck or whatever. It’s a small difference for you. You’re the patron at the restaurant, you can afford the price of the meal. The waiter or waitress works on a crummy salary and depends on tips to earn a living. So, big deal, you save a buck and the waiter feels hurt and undertipped and gets paid less. Sorry, bud, but that’s about as cheap as it gets.”
Ouch!! Harsh words. But let’s re-examine the main point: the tip on tax is a trivial amount. Honestly here in Atlanta you can’t get out of a semi-nice dining establishment for less than fifty bucks. And as we saw with certain high ticket items, like wine, the incremental costs can really add up. So I decided to tally the numbers in Excel and see what the costs and savings actually were. I used a 10% sales tax and a 20% tip, which is around what I pay here. I’m not sure if the alcohol sales are taxed differently and given the preliminary results I’m not really that concerned. See for yourself:
Bill Sales Tax Tip on Tax $10.00 $1.00 $0.20 $50.00 $5.00 $1.00 $100.00 $10.00 $2.00 $300.00 $30.00 $6.00 $600.00 $60.00 $12.00
Now I’m hesitant to call any amount of money “trivial” but this just doesn’t seem to be worth getting that upset about. Even at a super-expensive level, there just isn’t that high a return from diligently tipping on the pre-tax amount. It equals out to about a 2% savings on the total bill.
Money aside, many people don’t believe in tipping on tax based on the principle. I don’t see anything morally reprehensible about omitting it, though you can expect some dirty looks if the server was expecting 15% of the total bill and gets what he thinks is 13%. And of course you always run the risk of being called cheap. But if you tip 20% or more on the base, I doubt anyone even notices. For me it’s worth the “extra” 2% just to keep things simple and tip on the total.
As always your comments are welcome. The “official” tipping etiquette Survey is still running, so click over to weigh in.
When not eating fifty-dollar meals at various restaurants in Atlanta, Mike writes Broken Cupid, a dating blog for single gay men.
I rather suspect that anyone who gets this anal about tipping are the ones who tip exactly 15% down to the penny.
I always tip 20-25% on the base price (without tax) and then round up to the nearest dollar. I don’t tip on tax (mostly because I calculate the tip and what I plan to pay in my head before the check comes and then pay in cash and the numbers I use are from the menu pre-tax items. I figure the rounding up to the nearest dollar is pretty much equivalent to paying tip on the tax.
Then again, I rarely pay more than $10-$15 before tip at a restaurant by myself or $30 with my partner. I live in an expensive major city so I am surprised that so many folks see $50 as the base price of a meal. For one person or two?
We also don’t drink so maybe that’s where I’m losing track?
WTTO- Alcohol is definately involved.
kathy– It will be interesting to see if that holds true when we analyze the survey.
It never occurred to me to tip on anything other than the whole tab. Booze included.
But then I’ve learned to quit ordering wine with food…one way to keep a restaurant bill within reason is to teetotal while you’re there. These days I don’t even order iced tea or soft drinks — I ask for water. Better to drink at home, anyway, after all your driving is done!
Mike: I tip on total…
I’ve always considered people to be cheap when they tip on tax and / or the ones that just double the tax and use this as their calculation – which is 7.25% in California, local supplements might push it to 8.75% in some places – but still – either way coming up way short of 20%.
Funny– A dinner without wine?!?! I could never do it. But you’d absolutely be able to have a meal for $30.
Nina– Tipping on pre-tax is more common than you’d think.
Mike: one more thing… this just in about the tip jar at Starbucks.
$100 million tip for Starbucks servers – Judge says baristas shouldn’t have to split take with bosses
106 comments there so far… seems people have an opinion about this one…
How can you say “it shouldn’t be a big deal to you to tip another dollar”? If the amount is that trivial, does it break a server’s bank to not receive an extra dollar?
Bottom line, if the server gives me good service, I’ll tip well. If they don’t, I won’t. Earn your tips. You are not entitled to them.
nobody force you to be wait staff. you applied for that job, accepted it, and nobody forces you to go there day after day. it’s a free country and take your queeny ass to work somewhere else if you don’t like it. based on that, i’ll tip you bitches whatever i damn well please, sales tax or no sales tax. OH SNAP!
@ Nina– seems people have an opinion about this one too.
@ Erica– good point, Honestly if I had to choose sides between a server who felt cheated and the person who tipped a buck less, I’d be hard pressed to be sympathetic towards either side.
@ Tabitha– I’m just glad I’m not waiting on your table 😉
Lovely survey by the way.
From a server’s perspective, if you pay with a credit card, I end up with only that final copy receipt. The bill says $40, a person tipped $4 and I scoff that that person tipped only 10%. The next time that person comes in, I point out to that server that they only tip ten percent. Granted, I didn’t see what the before tax equivalent was. But, I distinctly remember when people tip me less than 15%. I usually receive 20% or even occasionally more because I am a very good server. Pardon the arrogance. 😀
Not to mention, I’m usually too busy to glance at what the before tax part was and what the correlating percent would be.
I’ve gone out with parents of friends before and was extremely embarassed to see them tip 15% based on the before tax and then round down the cents. These people are as cheap as they come and their daughter is the same way. I ended up stopping the server as I made a trip to the bathroom and slipped him an extra five.
I can understand people tipping pre-tax, but it just seems cheap to me. An extra dollar goes a long way in a server’s mind. I remember who tips a little over and I’ll remember it for the next time they come in.
@ Vixen: I was on a date with this guy who was giving me a clingy vibe and was looking for an escape route. He was a server so I made them split the bill and I put down 15% to the exact cent, post tax. It was cheap of me — but the guy never called the next day.
15% was reasonable in that situation, regardless, though normally I’m in the habit of leaving 20% since the math is easier.
Anyway my point is that tipping makes an impression on everyone around and it seems like the wrong time to pinch pennies. Unless your date is going badly 😉
If I spend $10 to $12 on a meal, I usually throw in three to five bucks depending on the quality of the service.
I have worked in many restraunts, and I know the crap that servers have to deal with. So I start with 20%, then go from there depending on the service. The worst I have givin was 10%, but looking back on the situation the server deserved to be stiffed.
I prefer to tip 20% or higher, tax included. Easier math, and honestly the meals that I eat are so cheap that the tax/no tax consideration is trivial.
I always tip 20%, tax included. I know I should be more careful with my money, but it’s always easiest for me to just look at the total, multiply by 2, then move the decimal over. I guess I’m lazy…
I always tip on the total after taxes and round up to the nearest dollar (although in honestly, that’s me being lazy, more than me being altruistic).
It never occurred to me to not tip on the total bill.
20% seems to be the norm nowadays, so that’s my default. Usually it’s on the total after tax because it’s just easier that way. And yeah I do sympathize with the servers, having to rely on just tips and all. I even cut them some slack for having the occasional crappy day as long as they’re attentive. I could never do it; they’d have to call the cops to pry me off of the first obnoxious customer who gave me any grief!