Gratuity

Leaving some currency on a restaurant table is a common way of giving a tip to the serving staff.

A tip (also called a gratuity) is a sum of money customarily tendered to certain service sector workers for a service performed or anticipated. Tipping and the amount are a matter of social custom and social practices vary between countries and settings. In some locations tipping is discouraged and considered insulting and in some locations tipping is expected from customers. The customary tip can be a specific range of monetary amounts or a given percentage of the bill. In some circumstances, such as with U.S. government workers, receiving of tips is illegal. A service charge is sometimes added to bills in restaurants and similar establishments. Tipping may not be expected when a fee is explicitly charged for the service.

Etymology and history

The first usage of the term "tip" in the sense of giving a gratuity dates back to 1706. Pictured here are European waiters from the early 1900s.

According to the Oxford English Dictionary, the word tip originated as a slang term, and its etymology is unclear. According to the Online Etymology Dictionary, the meaning to "give a small present of money to" began in c.1600, and the meaning "give a gratuity to" is first attested in 1706. The noun in this sense is from 1755. The term in the sense of "to give a gratuity" first appeared in the 18th century. It derived from an earlier sense of tip, meaning "to give; to hand, pass", which originated in the rogues' cant in the 17th century. This sense may have derived from the 16th-century tip, meaning "to strike or hit smartly but lightly" (which may have derived from the Low German tippen, "to tap"), but this derivation is "very uncertain".

The practice of tipping began in Tudor England."By the 17th century, it was expected that overnight guests to private homes would provide sums of money, known as vails, to the host’s servants. Soon after, customers began tipping in London coffeehouses and other commercial establishments."

The etymology for the synonym for tipping, gratuity, dates back to the 1520s, from "graciousness", from the French gratuité (14th century) or directly from Medieval Latin gratuitas, "free gift", probably from earlier Latin gratuitus, "free, freely given" . The meaning "money given for favor or services" is first attested [in the] 1530s.

By region

Asia

China

In China, traditionally there is no tipping (except Hong Kong and Macau). However, hotels that routinely serve foreign tourists may allow tipping. An example would be tour guides and associated drivers.

Hong Kong

In Hong Kong, tipping is not expected in budget restaurants, mid-scale restaurants typically add a 10% service charge although it's not given to the wait staffs.However, people might leave the small change left over after paying the bill or tip as a compliment for exceptional service.

India

Four cycle rickshaws in India.

In India, tipping is traditionally not an obligation on the customer, although the practice is now more widespread than before. In budget and mid-scale restaurants and pubs, tipping is not expected, though always appreciated. Tipping for upscale restaurants and bars is comparable with international standards. A tip of 10-15% of the total bill is adequate for standard service. If a service charge is levied on the bill, an additional tip is deemed necessary only for exceptional service.

Israel

In Israel, tipping in restaurants and bars is expected, usually 10%-12% service charge.

Japan

A rickshaw operator pulls two guests near Kyoto.

In Japan, tipping is not a part of the culture. Japanese people are uncomfortable with being tipped, and are likely to be confused, amused or possibly even offended if tipped.

Jordan

In Jordan, tipping is part of the culture, and it has always been used in restaurants, hotels, taxis, Hookah lounges, coffee shops and bars; and it is expected if you are a regular, though bars and restaurants may add 5-35% service charge. It is called a tip or Baksheesh (Arabic: ْبقشيش), which used to be given to labor workers in advance to get better service, or afterwards as an extra reward for their work. It is both illegal and an insult to tip in public and government offices, the police, and the military....

Malaysia

Tipping is not customary in Malaysia, although guests may pay a little more at their discretion, especially if the service has been particularly good. In established restaurants there is a mandatory 6% government tax and often an additional 10% service charge on receipts.

Pakistan

In Pakistan tipping is not a social norm as it can be considered demeaning at lower end businesses, although in upper-class higher end businesses especially food serving ones it is customary to leave a generous tip. Tips are usually between Rs.100 to 500 or 5-10% of the overall bill.

Singapore

In Singapore, tipping is not common. Bars and restaurants typically add a 10% service charge although it is not given to the wait staff. Tips are seldom given in a Hawker centre, coffee shop, or taxi.

South Korea

In South Korea, tipping is not customary at restaurants, hotels or for taxi service. Tipping may confuse the recipient.

Taiwan

In Taiwan, tipping is not customary, but all mid and high end restaurants include a mandatory "10% service charge", which is not given to the service staff, but rather considered by Taiwanese law as general revenue, as reported by the Taipei Times in "False Gratuity" on July 9, 2013.

Thailand

In Thailand a small tip is often left in restaurants. Taking back small change if you pay with a large bill is somewhat rude. For example if a meal is 950 baht, and one pays with a 1000 baht note, the remaining 50 baht can be left. A strict percentage is not needed.

Turkey

In Turkey, tipping, or bahşiş (lit. gift, from Persian word بخشش, often rendered in English as "baksheesh") is usually optional and not customary in many places. However, a tip of 5-10% is expected in restaurants, which is usually paid by "leaving the change". Cab drivers usually do not expect to be tipped, though passengers may round up the fare. A tip of small change may be made to a hotel porter.

Europe

Albania

Buskers often punctuate their performances with requests for tips.

Tipping (bakshish) in Albania is very much expected almost everywhere. In recent times it has become more common as many foreigners and Albanians living abroad visit Albania. Leaving a tip of around 10% of the bill is customary in restaurants; even porters, guides and chauffeurs expect tips. If you don’t want to leave money for porters, bellhops and the like, duty free alcohol is often very welcome- but this must be doled out with discretion, as some people may actually find it offensive.

Belgium

Tips (fooi or pourboire) are not expected in Belgium. When tipping in pubs/restaurant, it will mostly be a simple round up to the nearest integer.

Bosnia

Tips (bakšiš, napojnica) are not expected in cafes and causal restaurants- especially not from people not earning their own money i.e. students. However, tips are welcome if the service was good- for example if it included free refills or a favor like giving tourist information. Tips between 10%-20% are excepted in more expensive restaurants and hotels. If guests wants to tip they either pay the price plus desired tip and say "taman" (no change) or specify how much money they want back if paying with a large bill.

Croatia

Tips (napojnica, manča, tip) are sometimes expected, mostly in restaurants – but they are not mandatory. Restaurant tip is around 3-5% (or more if you are really satisfied with overall dining experience). In clubs or cafe bars, on the other hand, it is common to "round up the bill". It is not common to tip taxi drivers or hairdressers, but it's up to you.

In tourist countries such as Croatia and Singapore, tips can "open a lot of doors" and surely will leave a good impression, which will be recognized on your next visit.

Czech Republic

Tips (spropitné, dýško,tringelt) are optional but welcome in taxis, restaurants and similar services. It is usually not more than few crowns rounding up the bill to nearest 10. Payments with credit cards are never tipped. According to Czech law, service must be always included in the bill, however the tip must not be. In Prague and some other cities often visited by the foreigners there are often adapted Western practices and tips about 10% are expected, but not required.

Denmark

Tips (drikkepenge, lit. "drinking money") are not required in Denmark since service charges are automatically added to the bill. Tipping for outstanding service is a matter of choice, but is not expected.

Finland

Tips are not at all expected in Finland since any service charges must be included in the bill by law. However, people might leave the small change left over after paying the bill or tip as a compliment for exceptional service.

France

Tips (pourboires) are not expected in France since service charges are included in the bill. However, French people occasionally leave the small change left after paying the bill or one or two euros if they were satisfied with the service quality in some contexts, such as restaurants, hairdressers, deliveries, ...

Germany and Austria

Coat check staff are usually tipped for their service.

A guest contributor for USA Today suggested that tipping is not expected as it is in the United States. Tips of 2 to 10% (Trinkgeld, lit. "drink money") in Germany are commonplace, in restaurants and bars, sometimes with the comment 'stimmt so' ('keep the change'). Or the total price including the tip is commented with; thus a price might be 10,50 € and a customer might, rather generously but not unusually, say 'zwölf' ('twelve'), pay 20 € and still get 8 € back. For paying a small amount, it is common to round up to the nearest euro (e.g. 1,80 € to 2,- € even).

Greece

In Greece tipping ("Φιλοδώρημα", transl. filodórima, or the loanword "πουρμπουάρ" from French pourboire) is commonplace, but not mandatory. Usually an amount on top of the small change left after paying the bill is left on the table in restaurants or bars. There is no set formula as to the proper amount, but for a large bill the tip is usually larger as well. The setting is also a factor; for instance, dining at an upscale establishment would merit more consideration to the tip than simply having coffee at a café. Common tips for a fast-food delivery may be up to 1 or 2 euros, for a large restaurant order it may be up to 10 or 20 euros but usually not larger.

Hungary

Strippers are often tipped after their performances.

The Hungarian word for tip is borravaló (literally ’[money] for wine’, a loose calque from German Trinkgeld) or colloquially baksis (borrowed from Turkish bahşiş). Tipping is widespread in Hungary, the degree of expectation and the expected amount varies with price, type and quality of service, also influenced by the satisfaction of the costumer. Depending on the situation, tipping might be weird, optional, expected or obligatory. Similarly, some employers calculate into the wage that the employee would receive tip, while others prohibit accepting tips. In some cases tip is only given if the costumer is satisfied, other times it is customary to give a given percentage regardless the quality of the service, and there are situations when it is hard to tell from a bribe. Widespread tipping based on loosely defined customs and its almost boundary-less transition into kickback and bribe is considered a main factor contributing to corruption. A particular Hungarian case of gratuity is hálapénz (’gratitude money’) or paraszolvencia, which is the very much expected or almost obligatory – though illegal – tipping of underpaid state-employed physicians (Hungary's health care system is almost completely state-run and there is obligatory social insurance system).

Iceland

In Iceland tipping (þjórfé, lit. "drink money") is not customary and never expected.

Ireland

Although it has been cited that tipping for taxis is typical, it is not common in practice.

In restaurants a tip of around 10% the cost of the order is common.

Italy

Tips (la mancia) are not customary in Italy, and used only if a special service is given or to thank for a high quality service. Almost all restaurants (with the notable exception of Rome) have a price for the service (called coperto) and waiters do not expect a tip, but they will not refuse it, especially if given by foreign customers. In cafés, bars, and pubs it's however not uncommon, on paying the bill, to leave the change saying to the waiter or to the cashier "tenga il resto" ("keep the change"). Recently tip jars near the cash register are becoming widespread, however in public restrooms is often forbidden. Leaving the change is also quite common with taxi drivers. When using a credit card, it is not possible to add manually an amount to the bill, so it is possible to leave some coins as a tip.

The Netherlands

Tips are not expected in the Netherlands. When tipping in pubs/restaurant, it will mostly be a simple round up to the nearest integer. Service is included in the given prices and rates, but leaving a 2-5% tip is considered a kind gesture. In most restaurants the workers collect all tips in a jar ("fooienpot") of which each employee gets an equal share.

Norway

Tipping is commonly not expected but is often practised as a remark of high quality service or as a kind gesture. This is predominantly because service charge is included in the price by law. Tipping is most often done by leaving small change at the table or rounding up the bill.

Poland

Tipping in Poland is not obligatory and expected mostly at restaurants with a table service. The amount depends on the quality of the service, and is 10% or more when it was good. Taxi drivers may be often tipped small amounts, to avoid waiting for the change. Government workers (policemen, doctors) will often refuse taking a tip, which might be considered a bribery. It is, however, common practice to leave flowers or sweets for doctors, nurses or teachers on certain occasions (such as leaving the hospital or school).

Portugal

In Portugal tipping is mainly customary in restaurants, taxis, food delivery services and home repair services. Tips are not given based on percentages and are usually small.

Romania

The tip (bacşiş) is usually 10% of the bill and is expected in restaurants, coffee shops, and taxis.

Slovakia

Tipping is optional and its percentage usually expresses level of satisfaction with a service. Tips (sprepitné) in restaurants, bars and taxis are around 10%. When paying with a credit card tip in form of a cash money is left on the table together with a signed bill.

Slovenia

Tipping is not common in Slovenia and most locals don't tip other than to round up to the nearest Euro. Recently, areas visited by a large amount of tourists have begun to accept tips at around 10 - 20%.

Spain

Tipping ("propina") is not customary and not generally considered mandatory in Spain. In restaurants the amount of the tip, if any, depends mainly on the economic status of the customer and on the kind of locale, higher percentages being expected in upscale restaurants. In bars and small restaurants, Spaniards sometimes leave as a tip the small change left in their plate after paying a bill. Outside the restaurant business, some service providers, such as taxicab drivers, hairdressers and hotel personnel may expect a tipping in an upscale setting. In 2007 the Minister of Economy Pedro Solbes put the blame on the excessive tipping for the increase of the inflation.

Switzerland

Tipping is not expected, although it is common for a customer to round-up the bill to the nearest franc for a small amount, or to add a couple of francs (certainly not 10%) to a larger bill. In most restaurants and pubs, "service" as it's called, is included on the bill. Anything left in addition is a compliment for great service, but not expected.

Sweden

Tipping is commonly not expected but is practiced as a remark of high quality service or as a kind gesture. Tipping is most often done by leaving small change at the table or rounding up the bill.

United Kingdom

Golfers often tip the caddies who carry their golf clubs.

Tips of 10% are common in restaurants, but not compulsory. It is a legal requirement to include all taxes and other obligatory charges in the prices displayed. Service charges, which may be discretionary (although it is very unusual to refuse to pay) or mandatory, are sometimes levied, more often in London and other large cities than in other areas. It is legal to refuse to pay a mandatory service charge if the service was considered inadequate.

Service charge maybe inclusive of the bill, or sometimes added separately. 12.5% is reported as a common amount.

Tipping for other services such as taxis and hairdressers is not expected, but tips are often given to reward good service. In some large cities it is customary to tip both taxi drivers and hairdressers/barbers.

A tronc is an arrangement for the pooling and distribution to employees of tips, gratuities and/or service charges in the hotel and catering trade. The person who distributes monies from the tronc is known as the troncmaster. When a tronc exists in the UK, responsibility for deducting PAYE taxes from the distribution may lie with the troncmaster rather than the employer. (The word 'tronc' has its origins in the French for collecting box.) In June 2008, the Employment Appeals Tribunal ruled that income from a tronc cannot be counted when assessing whether a wage or salary meets the national minimum wage (see Revenue and Customs Commissioners v Annabel’s (Berkeley Square) Ltd [2009] EWCA Civ 361, [2009] ICR 1123)

North America and The Caribbean

Tipping is customary in restaurants offering traditional table service. The amount of a tip is ultimately at the discretion of the patron. In buffet-style restaurants where the waiter brings only beverages, 10% is customary for good service.

Canada

Tipping is practiced in Canada in a similar manner to United States. Quebec provides alternate minimum wage schedule for all tipped employees. Some other provinces allow alternate minimum wage schedule for "liquor servers".

According to Wendy Leung from The Globe and Mail, it is a common practice in restaurants to have servers share their tips with other restaurant employees, a process called "tipping out." Another newspaper refers to this as a tip pool.

"Tipping out the house (the restaurant) is occasionally explained as a fee for covering breakage or monetary error[s]."

A Member of the Ontario Provincial Parliament, Michael Prue, has introduced a Bill in the Ontario Legislature regarding tipping.

Mexico

A taxi driver waiting for customers

Workers in small, economy restaurants usually do not expect a significant tip. However, tipping in Mexico is common in larger, medium and higher end restaurants. It is customary in these establishments to tip not less than 10% but not more than 15% of the bill as a voluntary offering for good service based on the total bill before value added tax, "IVA" in English, VAT. Value added tax is already included in menu or other service industry pricing since Mexican Consumer Law requires the exhibition of final costs for the customer. Thus, the standard tip in Mexico is 11.5% of the pre-tax bill which equates to 10% after tax in most of the Mexican territory, except in special lower tax stimulus economic zones.

Gratuity may be added to the bill without the customer's consent, contrary to the law, either explicitly printed on the bill, or by more surreptitious means alleging local custom, in some restaurants, bars, and night clubs. However, in 2012, officials began a campaign to eradicate this increasingly rampant and abusive practice not only due to it violating Mexican consumer law, but also because frequently it was retained by owners or management.

If a service charge for tip ("propina" or "restaurant service charge") is added, it is a violation of Article 10 of the Mexican Federal Law of the Consumer and Mexican authorities recommend patrons require management to refund or deduct this from their bill. Additionally, in this 2012 Federal initiative to eliminate the illegal add-ons, the government clarified that contrary even to the belief of many Mexicans, that the Mexican legal definition of tips ("propinas") require it be discretionary to pay so that an unsatisfied client is under no obligation to pay anything to insure the legal definition of a tip is consistent with the traditional, cultural definition, and going as far to encourage all victims subject to the increasing illicit practice report the establishments to the PROFECO, the Office of the Federal Prosecutor for the Consumer, for prosecution.

United States

A server at Luzmilla's restaurant.

Tipping is a widely practiced social custom in the United States. A gratuity of 15 to 20 percent of the amount of a customer’s check is customary when good service is provided. Tips are generally given for services provided in table dining, golf course, casino, hotels, food delivery, taxi cab and salons. The US Government recognizes tips as allowable expenses for federal employee travel. For most of the 20th century it was considered inappropriate to offer tips to the owner of an establishment, and while this is still considered the standard etiquette rule, the concerns have mostly vanished as tipping has become ubiquitous for certain types of services. This etiquette applies to bar service at weddings and any other event where one is a guest as well. The host should provide appropriate tips to workers at the end of an event; the amount may be negotiated in the contract.

The Fair Labor Standards Act defines tippable employees as individuals who customarily and regularly receive tips of $30 or more per month. Employers may not allocate tips to themselves. Federal law permits employers to include tip wage towards satisfying the difference between employees' hourly wage and minimum wage. A tip pool cannot be allocated to employees who do not customarily and regularly receive tips. These non-eligible employees include dishwashers, cooks, chefs, and janitors.

Laws in the states of Alaska, California, Minnesota, Montana, Nevada, Oregon and Washington; and Guam do not recognize differences between tipped vs non-tipped employees in minimum wage determination.

Government employees

In the US, Federal law regulates gifting involving government employees under Standards of Ethical Conduct. Asking for, accepting or agreeing to take anything of value that influence performance of official act is generally not allowed.

The Caribbean

Tipping in the Caribbean varies from island to island. In the Dominican Republic, restaurants add a 10% gratuity and it is customary to tip an extra 10%. In St. Barths, it is expected that you tip 10% to 15% if gratuity isn't already included.

Taxation

Research by tax authorities finds that consistent tax evasion by waitstaff due to fraudulent declaration is a concern in US and Canada. In both countries, tip is a taxable income like any other form of earned income.

United States

Hair stylists are among the service workers who are often tipped for their service.

Tips are considered income. Entire tip amount is treated the same as earned wages with the only exception is for months in which tip income was under $20 Waiters, on average, fail to report at least 40% of their tips according to the IRS.

IRS Case Study

An IRS audit was triggered by major discrepancies between employees' declared tip percentage and percentage from credit card slips maintained by the business. It was discovered that employees of Fior D'Italia in San Francisco were significantly under-reporting their tip income. The average tip amount as computed by IRS through calculating the average of credit card slips for fiscal years 1991 and 1992 were 14.4 and 14.29% respectively. IRS applied those rates toward all sales including cash sales to estimate the actual tip. Reported tip amount was subtracted from estimated amount to estimate tax evasion. In the Fior D'Italia case, the IRS estimated the total tip for FY1991 as $403,726 and unreported portions as $156,545. For FY1992 estimated total was $368,374 and unreported portions $147,529. Calculating from these figures, Fior D'Italia underreported tip income by 38.8% in FY1991 and 40.0% in FY1992.

Amount

Waiters at the King David Hotel.

There is only limited data available on documented tip data, however based on two audits, the average was in the range of 13.57 to 16%. A case study hosted on Iowa State University's statistics course provided data for a suburban restaurant surveyed early 1990s. The sample size was 244; the mean persons per table was 2.57. The mean tip was $3.00 on a mean bill of $19.78. As such, the mean tip rate was 16.1%, with a standard deviation of 6.1%. Page 7 reports two outliers with a 41% and 71% tip rate on $7.25 and $9.60 bill respectively. Based on histogram shown on page 8, the median tip rate is about 15% with approximate 95% CI of 6 to 26%.

Based on an IRS audit of FIOR D'ITALIA in San Francisco, CA, it showed that for FY1991 and FY1992 actual tip amount was found to be 14.4 and 14.29% respectively. In a 2003 audit conducted in a research report under advise of Ron Worsham at Brigham Young University, it was found that the data collected from sample restaurants had an average tip percentage which ranged from 13.57 to 14.69% between 1999-2002.

Service charges

Service charges are typically added by caterers and banqueters. Restaurants commonly add it to checks for large parties. Some bars have decided to include service charge as well, for example in Manhattan, New York. Disclosure of service charge is required by law in some places, such as in State of Florida A standard predetermined percent, often ~18%, is sometimes labeled as a "service charge".

Canada

Canadian Federal tax law considers tips as income. Workers who receive tips are legally required to report the income to the Canada Revenue Agency and pay income tax on it. In July 2012, The Star reported that CRA is concerned with tax evasion. An auditing of 145 servers in four restaurants by CRA mentioned in the report uncovered that among 145 staff audited, CDN $1.7million was unreported. In 2005, The CRA was quoted that it will closely check the tax returns of individuals who would reasonably be expected to be receiving tips to ensure that the tips are reported realistically.

South America

Chile

Tipping is common at restaurants and bars, 10% of the total bill is the usual tip, sometimes tip is included or suggested in the total bill, but it depends entirely if you are satisfied with the service granted, you must say the tipping amount or percentage when paying the bill.
Taxi drivers are not tipped although if heavy luggage and good service are given, tips will be more than welcomed.
Performers at traffic lights are tipped (low) only if you liked the show, windshield wippers are not tipped or neither you should accept their rudeness but do not confront them, ever.
Hotel room service should not be tipped, but cleaning service should be left a generous tip when leaving if you can.

Argentina

Tipping is common in restaurants and bars, usually around 10% of the bill when happy with the service received. Leaving no tip when feeling dissatisfied is not uncommon, and the reason is understood. Many restaurants also levy a small fixed cover charge (cubierto; typically no more than 12 Argentine pesos per person). Tips are also usually given for food delivery services and luggage carrying and loading/unloading from buses. Taxi drivers are not tipped.

It is customary to tip the ushers in theaters and opera houses if they hand out programmes.

It is now starting to be a common practice to tip taxi drivers.

Bolivia

Service charges are included with the bill. A tip of around 5% or so is sometimes given, and is considered polite.

Brazil

A service charge (gorjeta) of 10% is usually added to a bill at a restaurant that offers table service. The charge is optional but it is very unusual for a customer not to pay it. Some people choose to give a little more for excellent service, but it's never required. It has become more prevalent for nightclubs to also apply a service charge of 10% to the bill at the end of the night, including not just food and drink consumed, but also the entrance charge (which may often be the majority of the cost). Customer are often unaware of this charge, and it is common for the nightclub to remove it upon request. There is rarely any tipping in other situations. It is believed that tips are often not paid out to servers/staff and restaurant owners pocket the money.

Colombia

You decide how much you want to tip, otherwise they will charge 10%. Most of the times the restaurant doesn't share the full tip received in a month with their employees. Tourists might be expected to tip even more than 10%.

Paraguay

Service charges are included with the bill, and tipping is uncommon.

Oceania

Australia

A young man (in white) caddies the golf clubs of an older golfer.

Tipping is not the norm in Australia. The minimum wage in Australia is generally $15.96 per hour ($19 for casual employees) and this is fairly standard across all types of venues.

Tipping at cafes and restaurants (especially for a large party), and tipping of taxi drivers and home food deliverers is common, but not an expectation. Such tips are usually around 10%, or for small bills, along the lines of "keep the change".

Tipping staff of any other kind of business is very unusual. There is no tradition of tipping somebody who is just providing a service (e.g. a hotel porter). Casinos in Australia—and some other places—generally prohibit tipping of gaming staff, as it is considered bribery. For example, in the state of Tasmania, the Gaming Control Act 1993 states in section 56 (4): "it is a condition of every special employee's licence that the special employee must not solicit or accept any gratuity, consideration or other benefit from a patron in a gaming area."

New Zealand

Tipping is not a traditional practice in New Zealand, though has become more prevalent in recent years – especially in finer establishments. Tipping in New Zealand is likely the result of tourists visiting from tipping cultures (such as the United States of America) who may pay tips because that is what they are accustomed to. Where tipping does occur among New Zealanders it is usually to reward a level of service that is in excess of the customer's expectations, or as an unsolicited reward for a voluntary act of service. A number of websites published by the New Zealand government advise tourists that "tipping in New Zealand is not obligatory – even in restaurants and bars. However, tipping for good service or kindness is at the discretion of the visitor". A Sunday Star-Times reader poll in 2011 indicated 90% of their readers did not want tipping for good service to become the norm in New Zealand

South Africa

Tipping waiters and bartenders is customary, though not mandatory in South Africa. It is customary to leave small change behind from a bill (for example, paying a bill of R17 with a 20 rand note), and in some cases restaurant and bar staff are tipped quite generously for outstanding service. The rule of thumb is a 10% tip for a large bill or a cocktail order, and giving R1 or R2 for a single drink order is customary.

Perspectives

Inconsistency of percentage-based gratuities

Crossing sweepers cleared the way for rich people to cross the road without dirtying their clothes, and they were normally tipped for this service. London, 1893

In countries where tipping is the norm, such as in the US, Canada, and in a few countries in Western Europe, some employers pay workers with the expectation that their wages will be supplemented by tips. Some have criticized the inherent "social awkwardness" in transactions that involve tipping, the inconsistency of tipping for some services but not similar ones, and the irrationality of basing tips on price, rather than the amount and quality of service (a customer pays a larger tip to a server bringing him a lobster rather than a hamburger, for example).

Cases where no gratuity is expected

Tipping may not be expected when a fee is explicitly charged for the service.

Mandatory tipping

A service charge is sometimes added to bills in restaurants and similar establishments. Attempts to hide service charge by obstructing the line on the receipt has been reported.

Mandatory tipping and voluntary tipping are illegal in some cases: Australian casino employees, and US government employees, for example. Tipping is not generally part of Japanese culture, and can be confusing or offensive. Tipping in China is frowned upon, except for those living in the semi-westernized regions of Hong Kong and Macau.

In United States, charges were dropped in two separate cases over non-payment of mandatory gratuity. Courts ruled that automatic does not mean mandatory. Some cruise lines charge their patrons $10/day in mandatory tipping; this does not include extra gratuities for alcoholic beverages.

Other concerns

Bribery and corruption are sometimes disguised as tipping. In some developing countries, police officers, border guards, and other civil servants openly solicit tips, gifts and dubious fees using a variety of local euphemisms .

Other perspectives

An academic paper by Steven Holland calls tipping "...an effective mechanism for risk sharing and welfare improvement" which reduces the risk faced by a service customer, because the customer can decide whether or not to tip.

Tipping is sometimes given as an example of the principal-agent problem in economics. One example is a restaurant owner who engages servers to act as agents on his or her behalf. In some cases, "[c]ompensation agreements [can] increase worker effort...if compensation is ...tied to the firm's success"; one example of such a compensation agreement is waiters and waitresses who are paid tips.

See also

• Mandatory tipping

External links

• The Trouble with Tipping
• Tipping in Spain
• Ask Yahoo!: How did the practice of tipping begin?
• New York Times article about San Diego restaurant which stopped accepting tips