Not sure how much to leave your server? Keep these guidelines in mind.
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Restaurant-tipping
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Different people have different views about tipping, and societal norms tend to change over time. Consider the increasing number of opportunities to tip. Many coffee drinkers used to order a latte, then drop some change in a tip jar as an afterthought. Nowadays, the credit card screen gives customers an option to add a gratuity to each and every latte purchased. It's little wonder people get confused about tipping! Luckily, there are still some hard-and-fast rules to keep in mind when tipping your server.

In a recent survey by CreditCards.com, sit-down restaurant diners who say they "always tip" have gone down two percentage points since 2019. The poll also found that the younger the generation, the less likely they are to tip. While none of us are going to single-handedly make up for that shortfall with a particularly generous tip, now is hardly the time to make tipping missteps. Here's some guidance to bear in mind.

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Your Tip Is a Big Part of a Server's Income

Unlike many other countries, in the United States, restaurants pay employees just a minimal salary. The federal minimum wage for tipped employees as of January 1 is a mere $2.13 per hour. However, states are legally allowed to have their own guidelines about the minimum wage for service providers—and many do. 

In some states, servers are paid an hourly wage of somewhere between $2 to $3 per hour, while in others, like California, the hourly pay can be as high as $14 per hour. But California, along with Oregon and Washington, represent a rare exception. In the vast majority of the nation, tips continue to make up a large portion of the server's salary—43 states continue to allow tipped workers to be paid a subminimum wage.

"Tips can constitute over 60 percent of a server's total earning," according to TableAgent.

General Etiquette and Guidelines for Tipping

In most cases, the standard rule of thumb or etiquette for tipping is to leave 15 percent for service you consider "average," according to TableAgent, and 20 percent if the service you received was above average. If you feel the service was outstanding, feel free to leave even more.

"Servers are paid based on a reward system: the person receiving the service can pay the server according to the quality of their performance. The better service the server provides, the more they are tipped," advises TableAgent.

If the service you experienced was sub-par, you may be tempted to send a message by decreasing the tip. But TableAgent notes that this approach will not fix the problem. Instead, consider speaking with someone of authority at the restaurant.

Who Benefits From the Tip?

It's also important to remember that in many restaurants, it's not just the server who pockets your tip. It is common practice in many places for the server to share that tip with support staff, including kitchen staff, bartenders, dishwashers, and bussers. More than 14 percent of restaurants that provide full service participate in this practice, which is known as a tipping pool, says TableAgent.

Group Tipping Standards

It's also good to be familiar with group tipping standards that restaurants may implement.

When serving a large group, it's not unusual for restaurants to add an automatic gratuity. Often this applies to parties of six or more, says TableAgent. In such cases, the gratuity applied by the restaurant may be about 18 percent.

If you are dining with a large party, it's a good idea to ask the restaurant in advance what its policy is.

Calculating Tips Before or After Tax

The general standard is to calculate how much of a tip you'll leave a server based on the cost of the meal, excluding tax. For instance, if the meal itself cost $20 and the tax was $2, you would leave a tip based on the $20.

However, if you want to be particularly generous, you can use the cost of the total bill, inclusive of tax, to calculate the tip, says TableAgent.

"Servers have to pay tax on their tip as well as share the tip with other support staff members. Many people feel that giving tip after the tax amount is fair, ensuring that their server receives a larger amount," the website explains.

Bottom Line: Tipping Is Not Optional

If there's one point to remember, tipping is part of the overall cost of eating out. It should not be considered optional unless you've been told in advance by the restaurant that the tip is included.

Workers in the service industry rely on tips to make a living, and the best practice is this: If you plan on eating out, also plan on tipping. Period.