Tipping – Why, When, How Much, and To Whom?

      No Comments on Tipping – Why, When, How Much, and To Whom?

Tipping is theoretically a thank you for nice or exceptional service.  But in reality, it is the mechanism that employers use to pass along the cost of their employees to their customers – us.  Many employers are legally exempt from paying their employees the minimum wage if they routinely receive tips including restaurant wait staff.  This means that much of our tipping is no longer optional.  But which?  And how much?  And to whom?  Tipping may be routine or a mystery, so here is a quick tip sheet to print and stuff in your wallet, purse, briefcase, and glovebox.  Or add this page to your smartphone and Evernote favorites.

Tipping for food service

Restaurants – Tipping is normally 15-20%.  Tipping is not optional even when you are dissatisfied.  Remember, problems may not be the server’s fault.  You can express your displeasure or delight by tipping more or less, even as low as 10% if you are really displeased.

Food delivery – $2-$3 for amounts under $20, 10-20% if larger.  Take into account weather, prime-time, and holidays.  Remember, the “delivery charge” on your bill is NOT a tip.

Counter service – Do not feel obligated to drop money in tip jars when you place an order and pick up your own food at the counter.  They are working for wages not tips, although you may remember that they are likely working for a microscopic minimum wage.

Bar tabs – $1 per drink or 15-20% if running a tab.

Tipping for travel

Taxis – 15% or more for help with luggage.

Uber – No

Lyft – Allows tipping which can be done thru their app.

Luggage – $1 – $3 per bag for airport curbside assistance and hotel bell-hops.

Hotels – Doorman, $1-$2 for getting you a cab.  Bell-hops, $1-$3 per bag.  Valets, $3-$5.  Room service, 15-20% if not already included.  Maids, $2-$3 per day; tip each day rather than at the end.  Remember maids may rotate from day to day and they are in there alone with all your stuff.

Tipping for services

Barbers, salons, stylists – 15-20%

Holiday season / New Years – $20 to people who provide you service throughout the year is a nice thank you and perhaps incentive for the coming year.

Calculating a tip

Calculating the amount of the tip is easier than ever; smartphones have calculator apps and bills increasingly include suggested amounts for 15%, 18%, and 20%.  But being able to quickly calculate a tip in your head is a very useful skill, so here is a quick method.

  1. Bill amount                                                                  64.78
  2. Round up so it’s easy to calculate                          65.00
  3. Divide by 10 or drop a zero                                     6.50                   (This is 10%)
  4. Add one-half more                                                    9.75                   (This is 15%)
  5. Double your 10% calculation                                   13.00                   (This is 20%)
  6. Now pick an amount between 15-20%                 $9.75 – $13.00              (Depending upon your generosity)

Try it; it’s easier than you think, especially with practice.

It’s tempting to consider tipping an annoyance, but instead consider it a routine way to express your generosity to people who help you.  But it’s still nice to travel to other countries like Japan that don’t do tipping.

About John Kimball

Over the past few decades, I have experienced most of these financial issues with both mistakes and successes. I sure wish someone had told me these things when I was first starting out. So many times I have cried out, "I want a do over!" when I learned a new financial lesson or tip. I aim to pass along to you the financial insights I have gained from experience, reading, analysis, and living the financial aspects of managing, saving, investing, and spending your money. I am an analyst with a large organization and happily married with two children on their way to an expensive college, no doubt. I read numerous financial blogs, websites, newsletters, magazines, newspapers, and books to bring you the latest news, insights, tips, and lessons combined with decades of experience.

Join the discussion, lend your wisdom, ask a question.

This site uses Akismet to reduce spam. Learn how your comment data is processed.