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Tipping before or after added tax?

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When we go to a restaurant, I always tip on the whole amount. My friend says you should tip only for the food, not the tax. Which is correct?

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  1. I have this debate with my husband all the time. I say tip on food only.

    1. I can't believe people even bring this up. In my state the tax is 7%, tip is 20%, so you are concerning yourself with 20% of 7% which is well under 2%.

      Why the heck would you go to the trouble of tipping only on the food? Does 2% of the bill really mean that much to you?

      6 Replies
      1. re: redfish62

        How is it trouble? Most bills post the pretax total. After that, it's just second grade arithmetic.

        1. re: cowboyardee

          Well when people say they debate it with their spouses I would say it is more trouble than it's worth.

          It seems incredibly small and chintzy to me to even contemplate it.

          1. re: redfish62

            If you are having a $200 meal, it is substantial. I think the point is concept, not dollars. - an intellectual debate if you will

            1. re: LAC06488

              In this scenario the difference is under 4 dollars that's hardly substantial if you are having a 200 dollar meal.

              1. re: kpaxonite

                Whether it's substantial is utterly beside the point. The question is what etiquette dictates. Anyone who wants to tip above and beyond is still welcome to. I often do. But I do like to know exactly what I'm tipping on in the first place.

              2. re: LAC06488

                Assuming 7% tax, and 20% tip, the difference would be less than 3 dollars. I guess it comes down to what one thinks is a "substantial" amount of money in the context of eating out and tipping.

        2. We tip on the pre-tax amount.

          1. I just double the tax for the tip --here it is 10% tax anyway
            so I only tip on the food...why tip for the government portion...then again its what ? extra 80 cents to a dollar??

            13 Replies
            1. re: ROCKLES

              This is exactly what I do. Well, used to do. Now that I have a toddler who is a messy eater, I double the tax then add $5. We try to clean up as best as possible before we leave, but it's no where near perfect so I hope the extra $5 makes our server feel compensated for the mess.

              1. re: ROCKLES

                Over the years it would add up, though. For us, a typical bill (10% tax), we'd pay only about $2.50 more. Still, it's the principle of the matter. It will eventually become "convention" and then those for whom the little extra matters, will be made to feel bad that they tip "pre" rather than "post". Mostly it's about keeping a particular social protocol, IMO.

                1. re: velochic

                  "it's the principle of the matter"

                  This always means money. Always.

                  1. re: melo7

                    "This always means money. Always."

                    Of course it does. Um... what else would it mean?

                    1. re: velochic

                      "Still, it's the principle of the matter" Um, the principle? But you're right. It's never the principle of the matter it's the money. Thanks for agreeing with me.

                      1. re: melo7

                        It's the principle of a financial matter. So it's about both the principle and money.

                  2. re: velochic

                    Mathmatically it adds up but as far it effecting my lifestyle it doesn't. But, unlike you, my typical meal out doesn't come to $125. I believe people are not MADE to feel bad usually (at least not in this situation), they choose to. "Social protocol" changes over time. Certainly tipping rates have gone up and I'm glad for the servers who actually benefit from the small extra amount I leave them. I tip on the entire amount obviously.

                    1. re: rebeccamarsh

                      Where we typically dine, the tables are turned about every hour and an average bill is $100. The server is usually tending about 5 tables. That means a "meager" tip before taxes is netting this server about $75 - $100 an hour wage. That is far more than most people are making that are paying the actual tip. Of course, it averages out to less with slower times, but if I'm in a restaurant at a busy time, I'm not going to feel bad that I'm tipping pre-tax rather than post-tax. By FAR, at those times the server is earning more than I do. I'm tired of the "poor little server" complaint. They are earning a decent wage even if they occasionally get stiffed, and they are still earning a decent wage if they are tipped before taxes. (FTR - I almost never tip because it's my dh that does the tipping, as he pays the bill 99% of the time.)

                      1. re: velochic

                        Wow, if I'm dropping $100 on a meal, I'd be very annoyed if I was hustled out in an hour.

                        1. re: donovt

                          Well, to be clear, we have never actually been "hustled" out of a restaurant. We just don't typically sit more than about an hour (give or take 10 or 15 minutes) for dinner unless we're eating some place really nice (where the bill will be twice as much and there will be more courses consumed). An hour and $100 is just typical weekly dining out for us ("us" meaning dh and I along with our 9 yo dd) and we're not hurried along with our meal or anything. I would get annoyed no matter how much we were paying if they "hustled" us along. If we were made to feel unwelcome, that would probably reflect in the tip, too. ;)

                          1. re: velochic

                            It should have been obvious to me that you didn't feel hustled since you said that is here you typically dine. I guess it helps if I read the whole post.

                            I was projecting since I rarely go out to eat since we had our son, but when I do it tends to be 3 courses and a couple of hours.

                        2. re: velochic

                          Hi, the waiters have to split their tips among everyone, so it's not like they are making 100's of dollars. How could you think that? Don't you think everyone would just drop out of school and become a waiter if it paid so much? Your math is way off. They do not get paid that much.

                          GET YOUR FACTS.

                          1. re: stackhit

                            Maybe you don't, but many do.

                  3. I say tipping on tax is neither expected nor required. But if you tip on the tax as well, no one is gonna take you out back and rough you up.

                    This has come up several times before and the clear consensus seems to be that you only need to tip on the pretax amount.

                    1. You should tip before tax, but more than often I tip after tax. Of course, the whole "tip" thing does not make sense to me. Why should you tip the waiter/waitress twice as much because you ordered an $30 meal instead of a $15 meal? The waiter/waitress didn't do anything more.

                      1. "Which is correct?"

                        Depends on the social customs in the part of the world where you are.

                        Where I am, tip is on the tax inclusive amount.

                        1. The standing custom in the US is to tip pre-tax (that is to say, you cannot be credibly accused of a breach of the social custom if you tip pre-tax, no matter how much servers prefer you to tip after-tax), but nothing prevents you from tipping after-tax if you prefer, and many people do that. The issue is mainly one of what servers' just expectations: they have a just expectation of X% on the pre-tax amount, but not necessarily on the post-tax amount.

                          1. So let us say the bill, before tax is $100 and with tax $107. You are someone who tips 15%. Without the tax your tip will be $15, with it will be $16.05....a difference of $1.05. For me, I'd give the waiter that extra $1.05--but then I usually tip 20%.

                            1. Its such a trivial debate : in my province the tax is about 15% . On 100 dollar food bill 15% tip would be 15 dollars. Same tip on 115 food bill is about 17 dollars.

                              Unless your dinner bills are in the thousands who cares? And even then its just a tiny percentage difference...

                              1. I tip on the whole amount. Why be cheap? If you're going to debate, come down on the side of generosity.

                                9 Replies
                                1. re: Isolda

                                  I couldn't agree more. I always tip on the whole amount, because when you stop and think of it, the value of the meal includes taxes.. it's just part of doing business for the restaurant. And so if the restaurant has to pay for the ingredients to make the meal, which are included in the meal price along with mark-up, and also has to pay the taxes, then the TOTAL value is the TOTAL bill. Why split hairs, unless you're cheap and make a living out of it.

                                  1. re: Pixie Muse

                                    If you eat out alot, it adds up..if you spend $5,000 per year on dinners out, it's a far cry from spending $500 per year

                                    1. re: LAC06488

                                      If you spend that much each year you should be able to afford the difference otherwise you are spending far beyond your means. Its almost like you are suggesting the more you pay eatng out the less you should tip...illogical.

                                      1. re: kpaxonite

                                        Ilogical???? ..the tip and the tax are proportionate to the bill..if the bill is higher, the tax/tip are higher...if you pay more for the meal, you tip more...

                                        1. re: LAC06488

                                          well by saying 5000 dollars eating out is different than 500 in defence of tipping before tax you are insinuating that if you eat out a lot its ok to tip less....

                                          1. re: kpaxonite

                                            The percentage remains the same...___% of $500 or __% of $5,000...are you saying that because you eat out more, you have to raise the percentage tip or tip post tax?

                                            1. re: LAC06488

                                              Exactly so why does it atter how often you eat out:

                                              I couldn't agree more. I always tip on the whole amount, because when you stop and think of it, the value of the meal includes taxes.. it's just part of doing business for the restaurant. And so if the restaurant has to pay for the ingredients to make the meal, which are included in the meal price along with mark-up, and also has to pay the taxes, then the TOTAL value is the TOTAL bill. Why split hairs, unless you're cheap and make a living out of it.

                                              Permalink | Report | Reply

                                              By Pixie Muse on Aug 05, 2011 09:02PM

                                              re: Pixie Muse

                                              If you eat out alot, it adds up..if you spend $5,000 per year on dinners out, it's a far cry from spending $500 per year

                                              Permalink | Report | Reply

                                              By LAC06488 on Aug 07, 2011 07:53PM

                                              1. re: kpaxonite

                                                Tax is a pass through not a cost of doing business! The customer pays tax on the sale and the restaurant remits the tax to the taxing authority

                                  2. re: Isolda

                                    Well said...also I always round up to the nearest zero or five. So if a $100 tab (pre-tax) was now $111.50 (Richmond, VA meals tax w/ sales tax comes to 11.5%), I'd leave $25 or $30 depending on service. If something is comped, I'd make it $40.

                                  3. Many people tip pre-tax because of the arithmetic involved.

                                    If you want to tip 15% and your tax is 5%, tripling the tax, which is listed explicitly, is easier for most people than shifting the decimal on the tax-included total, dividing that by two, and adding that to the decimal shifted part again.

                                    If you want to tip 18% and your tax is 9%, doubling the tax, which is listed explicitly, is easier than just about any "shortcut" you can find for multiplying the tax-included total by 0.18.

                                    Because tipping rates are usually in the teen percentages, it is automatically harder for most people to multply those percentages against the tax-included totals, than to simply double, triple or quadruple the listed tax as appropriate.

                                    Now, you may personally find it easy to calculate 15% or 18% of something, but as a person who regularly watches a wide spectrum of people do arithmetic, I can tell you that makes you special. (I've watched many people hand calculate 10% of a quantity by long hand multiplication, rather than decimal shifting.)

                                    2 Replies
                                    1. re: dump123456789

                                      Maybe I'm more arithmetically challenged but I find it WAY easier to double the total and divide by ten. Then round up to the nearest dollar and put that in the tip line. But then I always use a credit card and tip on the card.

                                      1. re: hsk

                                        Sure, if you're tipping 20%. According to the NYT article linked in the Food Media & News board, 18% is the standard tip for the US, and 15% used to be before that. Those are harder percentages to calculate, so the tax multiplication method was a common way that people simplified it.

                                    2. Just had dinner last night at a relatively high end restaurant ($120 per person). Their 20% auto-gratuity was calculated on the pre-tax total.

                                      The most judgmental ("small", "chintzy", "cheap") responses to this subject seem to come from people who tip post-tax, and they often throw out numbers (eg. "20% tip on 8% tax = chump change"). My question is, if the pre-tax tippers round up anyway for convenience or any other reason (*), doesn't that nullify the numerical argument ?

                                      (*) I knew someone who used to round up the tip so that the cents on the total matched the date the charge was placed. Something about helping cross check that charges were valid.

                                      8 Replies
                                      1. re: dump123456789

                                        I would assume that any many mandatory service charge is calculated on the pre-tax total since the service charge itself is probably subject to sales tax. Theoretically, you could include the tax when calculating the service charge, but it would look kind of strange. Let's say the base total is $100, the tax 10 percent, and the service charge 20 percent. I would expect the service charge to be $20 and the tax $12. If the restaurant wanted the service charge to be 0.2(base + tax) and, at the same time, the tax is 0.1(base + service charge), we would end up with the following:
                                        service charge = 22/0.98 or about 22.45
                                        tax = 12/0.98 or about 12.24
                                        I hope no restaurant would go for that kind of math.

                                        1. re: nocharge

                                          The auto-gratuity was not taxed. The tab had 4 lines after the list of items ordered, in the sequence:

                                          Food/drink subtotal
                                          Auto-gratuity = 20% of food/drink subtotal
                                          Tax = tax on food/drink subtotal only
                                          Total = sum of previous 3 lines

                                          That's it.

                                          (If the auto-gratuity were taxed, I would have expected more lines. Something like

                                          Food/drink subtotal
                                          Auto-gratuity = 20% of food/drink subtotal
                                          Subtotal = sum of previous 2 lines
                                          Tax = tax on previous line
                                          Total = sum of previous 2 lines

                                          which was not the case.)

                                          1. re: dump123456789

                                            So was it called "service charge" or "gratuity" on the menu? Don't see why any local tax authority would let a restaurant get away with not paying sales tax on a mandatory service charge that is stated on the menu. It's part of the cost of your meal, so why would it be treated differently than a $12 appetizer? The money legally belongs to the restaurant and it's at the discretion of the restaurant to pass on any of the money to the servers as a bonus. A tip or gratuity, on the other hand, is considered a voluntary gift from the patron to the servers and thus not part of the payment to the restaurant that is subject to sales tax. There have been cases where restaurants have used the word "gratuity" on the menu when adding an automatic surcharge rather than "service charge" and been unable to collect it just because the word "gratuity" implies that it's voluntary.
                                            http://www.nytimes.com/2004/09/15/nyr...
                                            So, maybe a restaurant could avoid paying tax on an automatic "gratuity" by arguing that it's just a voluntary tip.

                                            1. re: nocharge

                                              A restaurant in Chicago [a place well-known by now, which recently ended a menu based on olden French dishes and is now serving a menu based on the cuisine of a certain SE Asian country] apparently had to swallow the error they made for the French menu by calculating tax (11%) on the basic meal + drinks before adding the mandatory service charge (18%) so as to comply with the law which required them to collect tax on the service charge (since it was mandatory). They remedied that for their current menu to levy the tax on (meal+ drinks + service charge).
                                              :-)

                                              1. re: huiray

                                                Well, mandatory service charges are not tips.

                                                1. re: Karl S

                                                  Correct - especially from the Tax Board's perspective. I was adding on to nocharge's query as to why the restaurant dump123456789 went to did not collect the requisite tax on the service charge and relating a little anecdote about another restaurant in the process.

                                                  1. re: huiray

                                                    The answer to nocharge and huiray's question may lie in the difference between the bill and the credit card slip. It turns out the bill contained the itemization of the auto-gratuity. However, the credit card slip only contained the sum of the food/drink and tax, leaving the tip still blank. So, in effect, the auto-gratuity was not auto.

                                                    Nonetheless, the restaurant's POV was that the tip was based on the pre-tax (not post-tax) amount.

                                        2. re: dump123456789

                                          Great observation of the "cheap" responders' tendency to boast their tipping. My research in tips revealed there's a psychological component to Americans tipping - they feel richer and better about themselves. The thing is...especially if you can't rationally justify throwing so much money around but do it anyways, there will be a strong need to fix this weird dissonance of illogical tipping by loudly bragging about how generous you are on the internet. "Bro, I tip the usual 20%... sometimes I throw in the 40 tho cuz, you know, I just totally can." (Ahhh... feel much better)

                                        3. I tip on the subtotal (pre-tax).

                                          1. 12% base, 18% if you made me smile, 25% if you were great. Pre-tax only, always.

                                            1. The whole idea of tipping is a farse. Wait staff are really just sales people. Your waiter is not providing a service. They are providing you with a menu of goods to be purchased, helping you with your decisions, taking your order and bringing it out to you. You could argue that they clean your table (not a service because it's to their establishments benefit) and the chefs cook your food (they are producing a sale-able product). Bringing you drinks and/or refilling them is just providing the promised products and possibly selling you more.

                                              Now a real service is hair cutting or lawn care or someone who hand washes your car. You're not buying a product(s), you are buying their time/work.

                                              Tipping at restaurants plain and simple allows an employer to underpay their staff and possibly have more staff on their payroll than would be possible if fair wages were paid. Why is acceptable in one place, but not others. I don't see people tipping much a McDonalds.

                                              It's also unacceptable that most restaurants will automatically add a gratuity to your bill when their are more than 8 people in your party. Why not just charge 15% more for your product and pay your staff fairly.

                                              10 Replies
                                              1. re: MatrixDweller

                                                "It's also unacceptable that most restaurants will automatically add a gratuity to your bill when their are more than 8 people in your party. Why not just charge 15% more for your product and pay your staff fairly."

                                                Why would it make any difference when it comes to how much you pay for your meal?

                                                1. re: nocharge

                                                  That doesn't make sense. Every other business charges a set price for their merchandise which incorporates all of their overhead costs including payroll. Why don't we tip the cashier when shopping at Walmart or the Dollar Store? Does anyone tip the person who collects the trays and cleans the tables in the mall's food court?

                                                  1. re: MatrixDweller

                                                    That's how it works in many parts of the world. What is on the price tag is what you pay. In the US, you are regularly charged sales tax on top of the price tag at the register when buying something even though it's typically the business that has the responsibility for paying the tax, not you as a customer. So you get used to realizing that there will be additional cost in addition to what the price tag says. Think of tipping the same way. It's the way things work in the US and you just have to get used to it.

                                                2. re: MatrixDweller

                                                  You're not alone. I researched tipping. What I gathered is that tipping is a hot American tradition which people do to "feel rich." In the end, it makes little sense.

                                                  Your argument that waiters are like sales people is great. I love the McDonalds thing. To add to your point, McDonalds workers probably get more solid salaries than heavy-tipping restaurant workers.

                                                  I also like your "real service" definition of buying someone's time. If only we Americans can become that world...

                                                  One replier says "it's just the way things work in the US." That's probably what an 1850s white plantation owner would have said to some idiot who thought black people were real people. Cuz the way things were, black people were not real people. The point of debates is to open up the mind, not to self-justifyingly end at "na... it's just the way it is."

                                                  Sorry... a pet peeve.

                                                  1. re: mlkewang

                                                    So you are seriously suggesting that whether sales taxes and/or VAT are included in the price tag or added at the check-out register is an issue on par with slavery? Maybe when you are done researching tipping you should research Godwin's Law.

                                                    Some say tuh-MEY-toh and some say tuh-MAH-toh. Is that just how things are or does one pronunciation show an inclination to support slavery?

                                                    1. re: nocharge

                                                      No, it is the about employers paying their staff as little as possible and expecting customers to pay extra to make up the deficiency. It's about why don't we tip everywhere or why don't we tip nowhere.

                                                      1. re: MatrixDweller

                                                        In one system, you pay a 20% tip in addition to your bill.
                                                        In another system, you pay no tip but your meal costs 20% more to pay for labor costs.
                                                        So how do customers wind up paying extra?

                                                        Fact of the matter is you're paying your servers' wages either way you go. Complain if you like about how much servers are paid... but if that's your beef you should probably favor the tip system, since at least in that system you have some degree of control over how much you pay.

                                                        1. re: cowboyardee

                                                          That's unfair to the worker though. If business is slow then the worker really suffers. The worker suffers if the customer is cheap and doesn't tip or tips very little. This is about being fair to the worker, not the employer or the customer. Maybe the worker is a friend or family member. Not just some entity you don't care about.

                                                      2. re: nocharge

                                                        It us also far from Godwin's farsical law. It has real meaning in that workers are slaves. I didn't see any reference to Hitler or Nazis.

                                                        1. re: MatrixDweller

                                                          face palm

                                                  2. no steadfast rule here in this family. depends on the experience, the food, the ambiance, the server, and attention given. in Hawaii last week hubby tipped 50% @ Roy's because he sensed I was very pleased with our server. indeed I was.

                                                    1. http://articles.latimes.com/2010/aug/...

                                                      From 2010, but interesting. Conclusion: Tips should be pre-tax. However, restaurants generated post-tax tip recommendations because, well, it was convenient to program it that way (I think), and virtually no one asked about it. If no one is demanding a change, restaurants have no incentive to be more poor after the post-tax system is already in place.

                                                      In the past month, I have received two receipts with tip recommendations. I worked the math, and one was pre-tax, the other was post-tax. I am confused like some of you. I agree that it's usually chump change, but like others, I have fun in being anal about "the principle."