Are You Familiar With Tipping Etiquette?

After our adventure over the weekend at the restaurant with horrible food and worse service, I realized that I didn’t tip the waiter. Tipping is something I already hate doing, not because I feel like people don’t deserve a tip for great service, but because some expect a tip for mediocre service. I hate that tipping has become a cultural requirement in every situation where money is involved.

But should I have tipped the waiter in this situation? He did still serve us a meal and fill our glasses with water. I have never stiffed a waiter, even for the most horrible service, when we eat at a restaurant and pay the check.

So, what is the tipping etiquette in a situation where you actually didn’t pay the check?

The whole situation reminds me of the banter between Jerry Seinfeld, George Costanza and the Smog Strangler in the back of a police car:

George: What do you tip a chamber maid.
Guy: I don’t know, five bucks a night.
Jerry: No, a dollar, two tops.
Guy: A dollar a night?
Jerry: Yeah, that’s a good tip!
Guy: That stinks!
Jerry: I read it in Ann Landers.
Guy: Oh, Ann Landers sucks!
Cop 2: Hey, shut it up back there.

So I thought I would address a little etiquette on tipping today.

Should the tip be based on pre-tax or post-tax total?

Technically, the tip should be on the pre-tax amount because that is the total amount paid to the restaurant but most people, myself included, tip on the total bill mostly because it’s easier to calculate.

And a little twist, for the coupon users out there, do you tip pre-coupon or post?

Generally, you should tip on the total amount before discount of the discounted bill as the cooks and waitstaff did the same amount of work to get the food prepared and served.

What if the meal is free?

Well, again, the staff did the same amount of work as if you paid full price for the meal so you should tip on the original price of the meal as if you didn’t get the meal for free.

But what if the meal is comped?

I felt a little bad about not tipping the waiter, but if the meal is comped due to bad service or bad food, there is no reason to tip unless the waiter did something especially helpful during the experience. This particular waiter didn’t care about us until we complained, so no tip!

Do holidays change things?

For those people you normally don’t tip such as your postal worker or UPS driver, holidays can mean a little gift here or there but I don’t get that many packages and don’t tip these people.

As for restaurants during the holidays, I don’t tip them any more or any less than I do during the rest of the year; the food and service isn’t any better during the holiday. I do however give cards to servers at our regular restaurant that have served us for years.

How do you calculate the tip?

Personally, my wife and I tip 15%+ depending on how above and beyond the service is but unless the service is completely horrendous, we don’t dip below the 15% mark.

To calculate 15%, I just take 15% of the total and add that to half of itself. For example, 10% of 25% is $2.50, and half of that is $1.25 so the tip would be $3.75. I then round the tip up so that when added to the total amount, it comes out to a round number. (I really like round numbers…)

My wife on the other hand heard somewhere that you can generally double the tax and it will come out to approximately 15%. This really depends on which state and county you live in as taxes vary, so if my wife is doing the calculations, she rounds up and adds a little extra on to the calculation to make sure we are tipping enough.

And how much do you tip a chamber maid?

Many hotels are now padding the cost of the room to cover tips for the maids, so you should check with the hotel when you book a room to see if a tip is even required. Otherwise, the general rule of thumb is 3$-5$ a night unless you are a complete slob, then double it.

This may seem a bit extravagant, but the truth is there are usually two maids per room so the total tip is split between them and it is not easy work cleaning 100 rooms in 4 hours. My wife worked as a chamber maid for a year and it is hard, unrewarding, and disgusting work. You wouldn’t believe some of the horror stories she told me…

What do you think? Is tipping getting madly out of hand now, with tip jars on every horizontal surface with a face nearby?

Image by Dave Dugdale

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24 People have left comments on this post

» Money BeagleNo Gravatar said: { Oct 13, 2010 - 08:10:33 }

When calculating a meal tip, I also consider drinks. Often my wife and I will get water, which is free, but I'll tip as if we'd each purchased a soft drink, since the waitperson did have to get the waters and usually provides refills.

Jesse MichelsenNo Gravatar Reply:

That's interesting, I've never heard of that one, but it's true, they did still have to work the same amount…suddenly eating out seems a lot more expensive 🙂

» JamesNo Gravatar said: { Oct 13, 2010 - 12:10:53 }

Ha! like the Seinfeld addition to the post. The guy was the "smog strangler" who Police thought was Kramer :). About tipping, I worked in the restaurant industry for 6 years. I usually double the tax on the bill, but if the service is great I will increase my tip, if it was bad reduce my tip. Servers don't make much per hour, so remember, if you don't tip for whatever reason, that is a huge blow to their take home amount in tips each day. They usually have to tip out to bussers and the like as well so they only get a percentage of each tip the get.
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Jesse MichelsenNo Gravatar Reply:

🙂 I knew someone out there would enjoy it, those new around here may not know what a huge Seinfeld fan I am..

Thanks for the info about the industry. I have one question though, I knew tips make up a huge part of take home pay, so why is there such bad service at times? You would think these people in the industry, that know exactly what their actions will do to their take home pay, would be tripping over themselves to make the customer experience more enjoyable than we could ever dream…

» JoeTaxpayerNo Gravatar said: { Oct 13, 2010 - 04:10:36 }

I tip based on my gut.
We were in NYC this weekend, I wanted to stop for a bowl of soup at an Asian restaurant. But, the Janes weren't hungry. It was late and the restaurant was empty, so we went in. For a $6 bowl of soup, I gave the waitress $12. I figured that was close to what she'd have gotten on a lite meal for the 3 of us, and I saw her disappointment when I just ordered one thing for me.

Jesse MichelsenNo Gravatar Reply:

Well, my tip is based on how my gut feels afterwards a little bit too 🙂 kidding of course..

You are quite generous. That's another thing that I could have covered in the post, if you occupy a seat but don't order anything, should you tip?

» Dividend MonkNo Gravatar said: { Oct 13, 2010 - 05:10:32 }

I always tip waiters. Perhaps I would not if the waiter went out of their way to be awful, but thankfully I've never experienced that. Since waiters get tiny wages and rely mostly on tips, I think they should be tipped decently even if they gave mediocre service, since tips are basically their livelihood. And I definitely don't consider food quality as part of the tip, since waiters usually don't affect food quality. I'd rather not punish the waiters due to mistakes by the cooks or by management.

My biggest problem with tipping etiquette has to do with knowing when to tip and how much for things I don't normally do. Like have a gas attendant fill my car for me. I never did that in my state, but in a state I moved to, full-service is common.
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Jesse MichelsenNo Gravatar Reply:

Good point about food quality, but at many places the tips are all divided up between everyone, which if I'm not mistaken, also includes the cook? I guess it depends on the restaurant and wages.

Those weird circumstances are tough though, I'd have no idea when it came to gas attendant. Other parts of the country, as well as other parts of the world all have different tipping procedures 🙂 (See David's comment below! haha )

» Kay Lynn AkersNo Gravatar said: { Oct 13, 2010 - 08:10:42 }

Interesting questions about tipping. We tip 15 + percent on the pre-tax amount. If we have a coupon or free meal we figure that value in so the server gets tipped appropriately.
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Jesse MichelsenNo Gravatar Reply:

I've actually never thought about figuring in the price of free meals; the next time we go out I'll have to let my wife know about this and start doing it. I was quite surprised by some of the info I found when researching for this article 🙂

» KNS_FinancialNo Gravatar said: { Oct 14, 2010 - 10:10:40 }

I also HATE the idea of a tip being mandatory, even for mediocre service!
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Jesse MichelsenNo Gravatar Reply:

Seriously, we are tipping now for the general lack of hostility! That's not what tipping is all about.

» David LeonhardtNo Gravatar said: { Oct 14, 2010 - 09:10:54 }

This whole tipping calculation thing makes no sense at all to me, for two reasons.

1. Pre-tax, post taxt…pre-coupon, post-coupon, paid or free…as you said: "The staff did the same amount of work as if you paid full price for the meal." So why would a tip be based on the price of the meal? That has nothing to do with how hard the waitress works. That is totally a factor of how much the restaurant owner thinks he can get for his meals. I think you'll agree that the waitress at the diner works as hard as the waitress at the Ritz.

2. Why tip? I'm sorry, but if the price is $20, that's the price. If a tip is "expected", then the price is in fact, say, $23. In that case, the $20 price is a lie. The restaurant/hotel/salon should pay its employees their full salary. I don't expect tips from my clients, nor does the lady behind the counter at the post office, nor the cashier at the pharmacy (not the pharmacist), not the school bus driver (although we get him something nice for Christmas and end of year as a thank you), nor do the tellers at the bank. So what makes certain professions work on the basis that the company should lie to us about the price and expect us to pay a portion of their employees' wages directly to the employee? Sorry, but that is just nuts.

Jesse MichelsenNo Gravatar Reply:

I am with you on many of your points, why can't waitstaff and people in the food service industry just get paid normally like everyone else?

I wonder what came first, tips, or low wages in the industry? I love when a place includes the tax in the amount you pay so pricing is more clear, but they still leave you guessing on tips; why not include tax AND tip in the price of the meal so you know exactly what you're paying. That way the check wouldn't be a surprise every singe time you dine out!

ugh, but it's a part of the culture now and although I hate tipping and think it's a ridiculous tradition, it is embed in our culture, thus we discuss the rules of tipping

» Jesse MichelsenNo Gravatar said: { Oct 15, 2010 - 10:10:26 }

Well, here are my thoughts on that; in the amount of time you were there, it seems like this person did a great amount of running back and forth from your car so I think, ok that deserves a larger tip.

Then I think, what if you were in the restaurant, the person would do much more work waiting on you, and more walking back and forth, so that must warrant a larger tip than the car-hop.

All this makes me realize what a bad tipper I have been in the post. We used to go to places that would bring the food out, and places we picked it up at, and we never tipped these people! 🙁

» Kay Lynn AkersNo Gravatar said: { Oct 15, 2010 - 11:10:22 }

The ones where they bring you drinks and clean plates. Remember in California, servers get paid minimum wage (at least) where they don't in many states.

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Jesse MichelsenNo Gravatar Reply:

AH right, I remember when I first discovered that waitstaff in many states get paid closer to 2$ an hour versus minimum wage, I was shocked..

» Jesse MichelsenNo Gravatar said: { Oct 16, 2010 - 04:10:11 }

Yep, the cost of doing business. I'm very curious what tipping is like in other countries..

» MoneyConeNo Gravatar said: { Nov 1, 2010 - 09:11:03 }

Waiting for the day when McDonald’s will put up a tipping jar!

» ValashtarNo Gravatar said: { Nov 8, 2010 - 12:11:30 }

In Australia, tipping is looked at very askance – meals are slightly more expensive, even factoring in the exchange rate, but servers are paid well, and tips are almost unheard of – it really is only if the service was exemplary.

Jesse MichelsenNo Gravatar Reply:


hey why not, there is one at a local fast food Mexican place near my home 🙂

Now that’s what I like to hear, waitstaff is taken care of and things are straight between the menu/prices and the custemore – no hidden charges. Thanks for if only we could put this on the ballot…

{ Oct 27, 2010 - 06:10:12 } Frugal Confessions

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