If it feels like tipping culture is more confusing than ever, you’re not alone. Recent national headlines about “tipping fatigue” show a growing frustration with the state of tipping — particularly at restaurants — and the murkiness surrounding when and how much people are supposed to tip these days.
So much of tipping, especially in the restaurant industry, is a matter of convention rather than rule, so deciphering current etiquette is headache-inducing for many people. Here’s what to know about tipping, and how restaurant workers answer some of the most common tipping questions.
How do restaurant tips work? Do servers keep 100% of the tips diners leave?
Under federal law, restaurant employers must pay tipped workers (anyone who makes more than $30 in tips every month) a minimum wage of $2.13 an hour. States have the ability to set their own laws regarding tipped minimum wage, however. In Texas, the tipped minimum wage matches the federal minimum of $2.13 an hour. In Arizona, that hourly rate is $10.85, and in California, the hourly rate is $15.50. In most cases, tipped restaurant workers like servers and bartenders rely almost solely on tips as their income. Hosts and kitchen staff typically receive nontipped wages.
Depending on a restaurant’s tip structure, the tip a customer leaves either goes directly to the server in full, or it goes into a tip pool that is split amongst the restaurant’s tipped staff. Those splits are usually calculated based on hours worked. Tip pooling or tip sharing is allowed by the U.S. Department of Labor as long as the workers receiving the tips participated in serving the customers who left the tips, such as servers, counter-service employees and table bussers.
How much should I tip at a sit-down restaurant?
For years, the standard socially acceptable tip percentage for restaurant dining was 15%, but that’s changed. Now, 20% is the recommended go-to.
One server at a Dallas fine dining restaurant told The Dallas Morning News that servers are never upset by a 20% tip. Tips over 20% are always appreciated in the service industry, though, especially if a server or bartender goes above the call of duty to deliver a good experience.
How should I handle tipping at coffee shops or counter service restaurants?
When it comes to coffee shop tipping, Maricsa Trejo, owner and pastry chef behind La Casita Bakeshop in Richardson and La Casita Coffee, says it’s expected for customers to tip a smaller percentage than they would at a sit-down restaurant. This goes for food businesses like her bakeshop, too, she says.
Baristas and counter service employees often make more than the minimum tipped wage, so their income usually isn’t reliant on tips the way a restaurant server’s is.
“I feel like there is a rule of thumb that if someone is just handing you something, 10% to 15% is more expected versus 20% or more at a sit-down place,” Trejo says.
Trejo says while tipping for counter service is recommended, she never takes it personally if someone doesn’t tip, especially with current inflation.
“Some people don’t have the ability to spend any more on something and that’s fine,” Trejo says. The rest of the people who come through the doors usually make up for it.”
What about takeout orders?
June Chow, owner of Hello Dumpling restaurants in Dallas, says it’s always a good practice to leave a tip on takeout orders because even though table service isn’t provided, several sets of hands still go into making the food, packaging it and getting it to customers.
“It’s not mandatory, but it’s always nice,” she says. “We’re not going to give them less service if they don’t tip.”
As for how much someone should tip on a takeout order, Chow says 10% seems to be standard, although she personally tips more than that when she orders out.
“For me, because I’m in the industry I know how hard people work, so I tip 15% to 20% on orders like that. If it’s a small order, I actually tip more like 30%,” she says.
What’s the difference between gratuity and service or hospitality fees?
Gratuity is the tip a customer adds onto their bill in recognition of the service they received. A service fee, also called a service charge or hospitality charge, confusingly has nothing to do with the service given by a server. It is a nontip charge that is automatically added to a diners’ check by the restaurant. These are typically calculated as a fixed percentage of the total bill.
The usage of service fees varies from restaurant to restaurant, which makes them confusing for many diners and sometimes for employees as well. Under federal law, service charges belong to the restaurant and may be retained solely by the restaurant or distributed to employees in any amount of the restaurant’s choosing, according to Dallas restaurant and hospitality attorney Ty Sheaks.
Some restaurants use these fees to help cover incurred costs while others redirect them to employees, often nontipped employees like dishwashers and cooks, either in the form of wages or benefits. It is expected in the industry for diners to still leave a tip on top of service fees.
Dallas-based Walkabout Hospitality Group recently added a 3% service fee to all checks in order to help fund a new employee benefits package that includes health insurance and paid time off. Owner Tanner Agar said all funds collected from those charges go into the employee benefits fund. But many other restaurants that implement service fees don’t state exactly how those funds are used, and they don’t have to.
Am I expected to leave an additional tip if gratuity is included in the bill?
No. Some restaurants automatically add gratuity (typically 18% to 20% of the bill) when a party size is over a certain number of people. This is to ensure that servers are adequately compensated for the amount of labor it takes to provide service to large groups. It’s not expected that guests leave a tip on top of automatic gratuity.
Although it isn’t required for servers to verbally notify diners of automatic gratuity, which is usually conveyed on menus, doing so is industry standard and viewed as a professional courtesy.
Why don’t restaurants just pay employees full wages instead of relying on tips and service charges to support their staff?
This is a complicated question with a complicated answer. In short, it’s because that’s just not the way it’s done in the U.S., and there’s little incentive to change the status quo. Attempts at doing away with tipping haven’t found staying power, and for some tipped workers in the restaurant industry, their earning potential from tips outweighs that of receiving regular wages, although benefits like health insurance and vacation time are nonexistent for most of them.
Restaurants also operate on extremely slim margins. To pay staff full wages and benefits would mean significantly increasing the cost of dining out, and most restaurants are not willing to take that approach out of fear of losing business.