Calculating Tip: Include Tax or Not?

[scfr]

When you calculate your tip at a restaurant, do you tip based on the cost of your meal alone, or do you tip based on the cost of your meal plus tax?

I have always tipped based on the cost of the meal alone. I thought: Why on earth would I tip on sales tax? In fact, it really annoys me when restaurant receipts include those pre-calcluated tip percentages a the bottom (as "suggestions" for how much you should tip) and they include the sales tax. Now I wonder if I have made some sort of social faux pas.

In Friday"s WSJ (Aug. 1, pW6) there was a review of a book called "Waiter Rant." They ran down a list of offensive restaurant customers, including this:

"And there are the cheapskates who compute the tip before the tax is added."

Do wait staff really consider someone who tips pre-tax a cheapskate? Is this really the view of wait staff, or is it perhaps the opinion of the journalist creeping in?

I have been a waitress (when I was in college), but it was in a no-sales-tax state so this was never an issue. Which begs the question: Why should a waiter in a sales tax state automatically get tipped more for the same value of meal as a waiter in a no-sales-tax state?

I do not see tipping pre-tax as being a cheapskate. I see it as being logical. However, if the concensus of the board is that this makes me a cheapskate, I will consider tipping based on post-tax.

However, if I do feel I "must" tip post-tax, I will cut down even further on dining out (something I don't do very often now). I have reluctantly accepted that a 15% tip is now considered the "norm," and that has caused me to eat out less and less. When deciding whether or not dining out is "worth it," I do think about the cost of the tip. If I have to add 15% to the cost of the meal AND the cost of the sales tax, I don't know if I'll be able to stomach the idea of dining in a restaurant again except on very rare occasions.

[disneysteve]

I tip based on the pre-tax amount.

I think the whole tipping thing is a scam anyway, but realize it is a necessary evil.

[boosami]

I tip on the total bill including tax. Then again, I also tip 20-30% and will only go as low as 15% if the service is terrible. Pay for servers is pretty horrible and it's a tough job. It makes me feel good to imagine making up for at least one customer who stiffed them that day.

I also once tipped a valet $20 by accident (meant to be $5). He was floored and treated me like a VIP the entire rest of my stay in the hotel. Sure, I spent a little more than I meant, but it was worth it to me for the promise of exception service.

[DebbieL]

The tip is calculated on the amount before taxes. Why on Earth would anyone tip on taxes?

[ActYourWage]

Never really thought about this, but I tip on the total amount.

[PrincessPerky]

I tip on the total bill taxnd all, but I tip 10% for lousy service 15 for ok and as high as a can for great.

reason being the minimum claim amount was 7% of gross sales when I waitressed, never thought to do it any other way.

[ActYourWage]

Originally Posted by disneysteve

I tip based on the pre-tax amount.

I think the whole tipping thing is a scam anyway, but realize it is a necessary evil.

How is tipping a scam? Why do you consider it evil?

[srblanco7]

I tip on total amount - usually about 20%...

And aren't we talking about approx. a 1% differential when comparing pre-tax tipping vs post-tax tipping (7% sales tax and 15% tip would result in a 1% addition to your bill).

Perhaps I dine at less expensive eateries - but 1% on a dinner bill wouldn't seem to amount to much...

[stressedmama]

I usually tip on the total bill too, but I tip 15% for average service, really good service 20%, and 10% for lousy service. I never gave much thought to this before.

[disneysteve]

Originally Posted by ActYourWage

How is tipping a scam? Why do you consider it evil?

Tipping is a scam because it is no longer what it was designed to be - a thanks to the server for good service. Most places pool their tips so the lousy waiters get just as much as the great waiters, and they share their tips with the busboy and kitchen staff.

Tipping is a scam because the tip is based on the cost of the food rather than related in any way to the level of service. If you and I go out to dinner, each paying our own way, and I order the $30 filet mignon while you order the $15 pasta, I am expected to tip twice as much as you even though delivering my meal didn't take any more work than delivering yours.

Tipping is a scam because it allows restaurant owners to pay their employees slave wages rather than a fair salary for the work being done. And despite that, many restaurants still add an 18% "mandatory gratuity" (which is an oxymoron) to the bill if there are 6 or more people dining together. I'd much rather pay more for the food and forget about tipping entirely and have the employees paid a fair wage.

[feh]

Originally Posted by disneysteve

Tipping is a scam because it is no longer what it was designed to be - a thanks to the server for good service. Most places pool their tips so the lousy waiters get just as much as the great waiters, and they share their tips with the busboy and kitchen staff.

Tipping is a scam because the tip is based on the cost of the food rather than related in any way to the level of service. If you and I go out to dinner, each paying our own way, and I order the $30 filet mignon while you order the $15 pasta, I am expected to tip twice as much as you even though delivering my meal didn't take any more work than delivering yours.

Tipping is a scam because it allows restaurant owners to pay their employees slave wages rather than a fair salary for the work being done. And despite that, many restaurants still add an 18% "mandatory gratuity" (which is an oxymoron) to the bill if there are 6 or more people dining together. I'd much rather pay more for the food and forget about tipping entirely and have the employees paid a fair wage.

I tend to agree with you. I don't enjoy tipping, although I see it as part of eating out. My range is 10% for bad service, close to 20% for excellent. And I use the total bill (including tax) when calculating.

I grew up (and still live) in a small midwest town, where eating out really was the only time someone tipped. I must admit it rubs me the wrong way when I travel to large cities and anybody that performs any service for you has their hand out (taxis, bellman, concierge, chamber maid, etc, etc, etc).

[PrincessPerky]

Originally Posted by srblanco7

I tip on total amount - usually about 20%...

And aren't we talking about approx. a 1% differential when comparing pre-tax tipping vs post-tax tipping (7% sales tax and 15% tip would result in a 1% addition to your bill).

Perhaps I dine at less expensive eateries - but 1% on a dinner bill wouldn't seem to amount to much...

Thanks I was trying to mull over that myself.....

at a restaurant where I would tip avg bill for all is less than $40 7% of 40 is $2.80 for a total of $42.80

10% is $4.30 vs pre tax $4
15% is $6.42 vs pretax $6
20% is $8.60 vs pretax $8

I just don't see why not doing it after tax....but then I budget 40 for a meal, even though the bill is usually 30 or less, I account for tips when budgeting.

even if your avg meal is 40..total $80, 7% is $5.60, after tax = $85.60

15% is 12.84 vs pretax 12...

maybe you folk prefer fancier restaurants...avg plate $100...bill for two is $200, 7% is $14..with tax bill = $214

15% is $32.10 vs pretax $30.. a whole 2 dollar difference.....

now suppose you have a really fancy place, 1K a plate...2K for two, 2140 with tax.....

15% tip is $321 pretax $300

Now that the tax makes a difference, but at that level, if you have to ask the cost you prolly can't afford it.

[PrincessPerky]

BTW the way tips are calculated is rediculous...

It is a system that benefits the restaurant..waiters want to sell you more stuff so the total bill goes up so their tip goes up. quite silly IMO.

But on the other hand I expect more from a waitress at say Nakato (20$ plate minimum) than chilis

And if I ever find a waitress who can keep my water filled I may just have to tip an extra 10, no matter where I am! I really don't know what is so hard, but I have learned to make my husband get one so I can steal his.

[disneysteve]

Here are a few quotes I pulled from internet etiquette sites...

A 15 to 20 percent tip is the usual amount that should be left for good restaurant service. Keep in mind that you should leave 15 to 20 percent of the total bill, before tax, and before any coupons or discounts are taken off.

Custom says that tips are calculated pre-tax, but many people just use the total bill either for the sake of simplicity or to be more generous. In other words, either way is fine.

Servers expect 15%-20% of the pre-tax amount of the bill.

Other sites said essentially the same thing. The standard is to tip based on the pre-tax amount but either way is okay. Obviously, they won't turn down a larger tip.

[disneysteve]

Originally Posted by PrincessPerky

I expect more from a waitress at say Nakato (20$ plate minimum) than chilis

And if I ever find a waitress who can keep my water filled I may just have to tip an extra 10, no matter where I am.

Agreed on both points. A fancier, more costly restaurant should bring with it a higher level of service. I've had the good fortune to eat at some top-notch restaurants where dinner for 2 with drinks can approach $400 (or more depending on what you're drinking) and the service is phenomenal. Compare that to your standard chain restaurant where you're lucky if they even get your order right and bring out the food while it is still hot.

Just last week we ate at a casual restaurant in Atlantic City. The food was fine but the waitress didn't come back to check on us a single time during our meal. I had to flag her down to refill my water glass. Yes, I left her a smaller than usual tip because I didn't feel she deserved any more than that.

[jIM_Ohio]

Tip based on total, and there have been times I have left a dollar or less for poor service. I have also tipped 25% for good service.

Of course I have two infants at home, so the last time I went out and had to calculate this was probably close to 9 months ago or even longer.

[ActYourWage]

Originally Posted by disneysteve

Tipping is a scam because it is no longer what it was designed to be - a thanks to the server for good service. Most places pool their tips so the lousy waiters get just as much as the great waiters, and they share their tips with the busboy and kitchen staff.

Tipping is a scam because the tip is based on the cost of the food rather than related in any way to the level of service. If you and I go out to dinner, each paying our own way, and I order the $30 filet mignon while you order the $15 pasta, I am expected to tip twice as much as you even though delivering my meal didn't take any more work than delivering yours.

Tipping is a scam because it allows restaurant owners to pay their employees slave wages rather than a fair salary for the work being done. And despite that, many restaurants still add an 18% "mandatory gratuity" (which is an oxymoron) to the bill if there are 6 or more people dining together. I'd much rather pay more for the food and forget about tipping entirely and have the employees paid a fair wage.

I see your point.

[JimInOK]

Pretax.

[geojen]

I waitressed for 6 years, and I agree that tipping by percentage does no one any good. For example, elderly couples are notorious for going out, sharing a plate, and having coffee. So, their bill may come to around 12 dollars, so the tip would be pretty little. However, the time I spent going to their table to refill their coffees 8 times and give them all the special little things that they need results in way more work than the 1 dollar they will leave.

I would much rather not be tipped, or be tipped per person. For example, when I go out, I tip for the amount of work that I think she did for me. If she refilled my glass 6 times without me asking, promptly delivered things I asked for, etc, I tip in respect to that, not how much my food cost.

Then, you have the days when you don't have many tables, for whatever reason. So, the restaurant expects you to "work for your wage" (which was 3.20 p/hr where I worked) which meant cleaning the restaurant. Last time I checked, cleaning services charge WAY more than 3.20 an hour for cleaning.

Sure, some nights I'd come home with 100 dollars in tips, but I would have to tip out the bus boy, the bartenders, even the cooks, even though they were ALREADY being paid for the jobs they do. I was a waitress, I got paid in tips. Why the HECK should I have to tip out these other people????

[disneysteve]

Originally Posted by geojen

I waitressed for 6 years, and I agree that tipping by percentage does no one any good. For example, elderly couples are notorious for going out, sharing a plate, and having coffee. So, their bill may come to around 12 dollars, so the tip would be pretty little.

Due to the outrageously large portions in most restaurants, my wife and I will often share one entree or even just order 2-3 appetizers as our meal. That keeps the cost down, but we recognize that we're taking up a table and a server's time so we will tip more than 20% in those instances assuming the server did a good job and treated us well.