Tip Computation: How do you Determine the Tip?

[Varmint]

An observation while looking over a Ruth's Chris (see this thread) receipt for reimbursement purposes: the waiter added a 20% gratuity. No big deal, but something that is VERY common here is that the gratuity is based on the bill AFTER sales tax is added. As a result, the gratuity is closer to 22%. It's always been my thought that gratuity should be based on the pre-tax amount.

[Peter B Wolf]

Here is something of great concern. Yes, tipping, as it is commonly known by the average restaurant guest, should only be added to the price of the food without tax. This can or maybe even should include individual beverage(s) service, except ‘Wine by the Bottle’. In my opinion, bottled wine sales have a huge mark-up, and adding a ‘gratuity’ of the (now recommended) 20% is outrageous. I also do not believe that any establishment’s management should ever automatically add a ‘service charge’ or gratuity to anyone’s bill except if a party consists of more than 6/8 people. This should also be clearly conveyed to the patron at the beginning of the order taking.

But here is what I do not completely understand:

Right here on eGullet, and in other forums, or in conversations with people in ‘the industry’ or even just simple daily ‘restaurant goers’ has it been common practice to ‘tip’ or expect to ‘get tipped’ a whopping 20 percent of the bill.

Can someone please explain this to me?

In the Sixties and Seventies and even the Eighties, people normally never tipped more than 15 percent, and many still thought that 10/12 percent was plenty.

Now, I know prices have gone up, and especially the cost of living and everything else, but what made us change the “PERCENT POINTS”.

I mean, lets say in 1965 a Steak was selling for $ 15.00 (all numbers appearing here are just hypothetical), the ‘tip came to 15%, so that was $ 2.25.

Today the Steak is $ 28.00 and the server gets $ 5.60 (20%)

Why has the price of steak gone up (by inflation and other) 86% but the ‘Tip’ by 148%.

You can apply the math to any real menu figures and might understand this kind of math better then I can.

[Fritz Brenner]

Varmint, I agree that the patron should be able to choose the tip they give their server, and a service charge should be added before the sales tax. At the restaurant where I wait tables, we never add a gratuity, no matter how large the party, so the tip is always up to the customer.

Peter B. Wolf, I really have no explanation for you as to why the "expected" tip percentage has risen to 20%. I will say, however, that I often don't receive 20%, and the managers at my restaurant tell us to aim for, and be pleased with, 18%. It's hard for me to take issue with a 20% tip-- I don't think it's too large a percentage of the bill at all (except, of course, if your service was awful and the server was rude and unapologetic). Clearly, though, I am biased: I only make $2.65 an hour as a waitress.

[ErinB]

This can or maybe even should include individual beverage(s) service, except ‘Wine by the Bottle’. In my opinion, bottled wine sales have a huge mark-up, and adding a ‘gratuity’ of the (now recommended) 20% is outrageous. I also do not believe that any establishment’s management should ever automatically add a ‘service charge’ or gratuity to anyone’s bill except if a party consists of more than 6/8 people.

I always add tips on top of the wine tab. Have i been wrong to do it all along? What about wine by the glass? I also assume that if there is a sommelier, you should tip extra?

[KNorthrup]

My completely unverified assumption has been that tip %s are increasing because the wages to waitstaff have not been increasing at the same rate as most other occupations. In some (most?) states, they don't even have to get minimum wage. Assuming the restaurant lobby argues that if the customers didn't pay the waitstaff salary via tips, they'd be doing it via higher prices and those would somehow be even more.

[Bux]

Tips in New York City generally range from 15% to 20%. Many people in NY double the tax, which until recently has been 8.25% of the cost. That means the base tip has been around 16.5% of the pre-tax amount or 15% of the amount with tax. 20% of the amount with tax is not uncommon where the service is exceptional or the patron is a regular. For many, 20% seems to be becoming commonplace.

[MsRamsey]

No big deal, but something that is VERY common here is that the gratuity is based on the bill AFTER sales tax is added.  As a result, the gratuity is closer to 22%.  It's always been my thought that gratuity should be based on the pre-tax amount.

Are they allowed to do that by law in NC? Here in Washington State they are, which I learned the hard way not long ago.

[tommy]

As a result, the gratuity is closer to 22%.  It's always been my thought that gratuity should be based on the pre-tax amount.

but that's just a standard. if you'd like, they can say that the gratuity will be added automatically for parties of x at a rate of 22% pre-tax.

ok then. you feel better?

remember, the 10-20% tips are just guidlines to help cheap people act appropriately and tip based on service. service charges aren't there to help people act appropriately and tip appropriately for service: they are there to protect the servers (i think at least). many of us here, i would guess, tip much more than 20% for great service, especially if BYO'ing is involved. that's not exceptional. it's the norm, to me at least. (edit: in the NYC/NJ area)

my problem is when it's not clearly noted that a service charge is being added (and yes, this applies mostly to the US), and when the server doesn't make it a point to point it out when he/she presents the bill. but that's a different thread.

Edited July 8, 2003 by tommy (log)

[jeniac42]

I second the theory that tip percentage has gone up because waitstaff hourly wages haven't. As far as I can tell it's been $2.13/hr in Ohio since the 70s, and obviously the cost of living is now higher. I'm not sure how that's been relayed to customers, but I think that explains why servers now expect more. At least where I work, it's not really greed so much as needing to pay the bills.

(My restaurant is a bit strange; on a busy night a server might end up with six tables total, because the meal takes so long compared to the average Columbus restaurant, and we spend a lot of time tableside; 20% is the average tip there.)

[beans]

Tips. Always a touchy subject. The summer I was a server....

The POS software, when a large party was served and one guest check was issued automatically "tagged" the tip at 18 percent of the subtotal, not including the tax into the sum. However that was always the gamble -- to tag or not to tag a party's check with the straight line 18 percent. Some groups it was a blessing, while other groups were most generous and tipped upwards to 30 percent! ("Party" is defined as a group of eight or more and clearly denoted upon our menus, along with one guest check per table/party as well).

However when a two or four top, for example, received their guest check and chose to pay with credit card, the total would be there with the blank line for a tip to be written and then the blank for the entire total. It has been of general intent that it is to make it easier to add up for the guest. No sneaky way to earn two percent more!

Trust me, you'd be surprised at how many times the guest cannot add the subtotal (including tax) and their designated amount to tip together correctly! Imagine those that have a hard time with three figures, one of which is an odd say $2.37 in tax!

As for why tipping has seemed to become 20 percent as a norm -- dunno. However I'm always grateful for the generosity of others when they are my guests seated at my bar, ordering food and drink.

edit: How did that smilie get there in mid sentence? Oops, sticky fingers...

Edited July 8, 2003 by beans (log)

[Nick]

Back when 10% was the norm, I'd tip 15% for decent service. Then when 15% became the norm, I'd do 20%. It might have had something to do with the fact that I'd had some friends over the years making a living waiting on tables and none of them were living in big houses or driving shiny new cars.

But, I'll be damned if I'll go to 25% now that the norm is 20%. Gotta stop some place. I get around the plastic problem by always tipping with cash. Keeps the bookkeeping simpler for the one that's getting it.

[tommy]

I get around the plastic problem by always tipping with cash. Keeps the bookkeeping simpler for the one that's getting it. 

and i know that just about every single server appreciates that. although i don't always do it.

[Fritz Brenner]

I get around the plastic problem by always tipping with cash. Keeps the bookkeeping simpler for the one that's getting it. 

and i know that just about every single server appreciates that. although i don't always do it.

What I appreciate above all is a customer that tips decently, according to how well I serve them

[elfin]

When paying with plastic, we usually tip in cash so the server gets the $ that night. We have heard horror stories about restaurants making the waitstaff wait until the credit card company actullay pays the restaurant- and servers who have left have missed out or there is a lag. Another story is that after another restaurant shut down, it refused to reimburse the staff for the charged tips and back pay.

[phaelon56]

Back when 10% was the norm, I'd tip 15% for decent service. Then when 15% became the norm, I'd do 20%. :

When was 10% the norm? Just curious as it was 15% back in the late 70's and early 80's when I was waiting table. I still tip based on service, total cost of bill and how much labor is really expended by the server. If I tie up a table for longer than the average patron and the server is likely to lose a turn, I add on accordingly. if i stop somewhere for breakfast or lunch and eat light with a bill of $5 or so, I'm likely to tip $2 - way out of whack percentage wise but makes sense based on circumstances when I do it.

I have always, always, always been under the impression that the tip should be calculated on the pretax total. Taking 10% and then adding half of that seems simple to me but people really do get flustered and flummoxed with the math, especially when they're relaxed and have already had a few cocktails.

I was unaware that restaurant minimum had not kep tpace accordingly with regular minimum wage. is that possible? In NY state it was always pegged at a couple $$ below "regular" minimum wage.

[Bux]

Back when 10% was the norm, I'd tip 15% for decent service. Then when 15% became the norm, I'd do 20%. :

When was 10% the norm? Just curious as it was 15% back in the late 70's and early 80's

A few of us go back as far as Nickn. The truth is that the earliest I recall, the discussions among the new tippers -- those picking up the tabs as adults or college students -- were about whether you include the tax, or the drinks, in the 15% tip. Nickn must be older than I am.

[hotle]

i travel a lot, and therefore 'dine' (it's a relative term......and sometimes WAY too elegant to describe eating alone at 10 pm in an empty hotel restaurant) out a lot. i, too, was raised in the 15% 'world', have watched the norm rise to 18%. i believe my company's policy is 15%, and i believe the policy states 'before taxes'. frankly scarlett, i don't give a damn (ok, i should also admit to not being inclined to carry a calculator with me to every meal, much like some of my annoying friends who figure out EXACTLY what they should pay for, AND the tip they're willing to pony up for......but i digress......and i don't eat with these people any more, either, come to think of it!).

if a server's good to me, makes sure i'm taken care of, isn't too nagging, etc., i usually tip 'high' - over 20% (i'll also admit to tossing bartenders $20 or more over the top of a tip when they've been exceptional, but that's another story! ) and up to 33%. sometimes, the server can make my night, whether it's when i'm on business or with my family or friends. they're right there when you need them, never there when you don't, always ready with the right comment or joke or question.......these servers enhance the experience.

if the service sucks, the server's rude, or the combination of server/chef is lousy, i'm down at 10%. while i've never really stiffed a server, i've come close. to me, it's a 'gratuity', not a 'birthright'.

fwiw!

matt

[Varmint]

I would have tipped this guy at least 20%, because he gave exceptionally good service, which is rare here in Raleigh. But I just happened to notice that the 20% gratuity that was automatically tacked on was based on the amount that included tax. Down here, that's standard practice, but I just wanted to know why that's standard here but not necessarily in NY.

[Nick]

Back when 10% was the norm, I'd tip 15% for decent service. Then when 15% became the norm, I'd do 20%. :

When was 10% the norm? Just curious as it was 15% back in the late 70's and early 80's

A few of us go back as far as Nickn. The truth is that the earliest I recall, the discussions among the new tippers -- those picking up the tabs as adults or college students -- were about whether you include the tax, or the drinks, in the 15% tip. Nickn must be older than I am.

Okay. I've got to admit to being 62 and started tipping back in the early sixties. 10% was standard for a long time. !5% for less time, and now, apparently, 20% for even less time.

[slkinsey]

Cecil Adams, the self-proclaimed "world's smartest human being" and writer of The Straight Dope column "fighting ignorance since 1973 (it's taking longer than we thought)" weighs in.

I found the following pretty much says it like it is:

The bottom line is: The cost-less-tax thing is a bullshit 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.

[KateW]

When the SO and I go out the bill is usually between $20-30 and I usually give $3. When the SO pays he gets all anal and figures out the tip so the bill will be an even dollar amount (no change).

Recently our waitress really sucked at a particular chain restaurant and she rang up the wrong drink for me and then went on break while we were waiting for her to pick up the credit card. Some other chick came over and picked it up for her. I gave our waitress $2, even though she probably deserved none. I'm just too nice.

[beans]

After tolerating the worst of high maintenance types -- entertaining, picking up the thrown toys and the flung spaghetti noodles/french fries all around the table from their adorable children, (or watering, feeding, walking and poop scooping their puppy dogs when I waited on yachts at Shooter's Waterfront Cafe) I really feel for wait staff. It's only a couple extra bucks I'll never miss. Everyone has a table from hell and it may be the one on the other side of the diningroom that your server is doing their best to appease and may be pinching upon his/her other tables. My only exception: when they are personally offensive, abusive and/or rude! They'll *still* be tipped, but management will be made aware!

Just as a passing personal observation of the waitstaff of my employing restaurant (the service bar end of the bar is always the place to hear the gripes, groans and any gossip that should not spark your interest!): The communication of a poor tip never equates to "I gave them crap service." It *always* becomes the guest/customer being labeled as a cheap and stiffed 'ya. Crap service always should be brought to management's attention.

[tjaehnigen]

I tip on the pre-tax total. A nickel if the service rates as one of my worst 5 experiences ever, 10% for sub-par service, 15% for average service, 18-20% for very good service, up to 25% for exceptional service. I tip on the wine service usually a flat dollar amount as I am prone to bring my own wine from my cellar (whenever possible), otherwise, I'll tip on the bottle cost, too, as I no longer buy bottles more than $50 off of any list (on my own nickel anyway).

[glenn]

Is the norm really 20%? Anyone have stats to substantiate that? That doesn't appear to the case from my experience (in NY). Double the tax seems to be the norm, which comes out to over 17% at the new tax rate. I think people here on eglutton, i.e., foodies and those in the industry, are definitely not normal (open for interpretation :-), and leave more. My guess is that people either leave double the tax or 20% --- who the hell feels like figuring out 18% or whatever. As for Varmint's original post about a service charge on the tax and food, I don't think that's legal in NY/NJ, but I can find out. Personally, I've always tipped on the pre-tax amount, but now that I think about it, it's fairly insignificant. On a $500 tab with a tax rate of 8.625%, the difference is only $8.65 on a 20% tip.

[tommy]

When the SO and I go out the bill is usually between $20-30 and I usually give $3.

well i hope the server is working very hard for that 3 bucks.