"Work is a surefire money-making scheme" - Dave Ramsey

My Tipping Philosophy

By , November 18th, 2008 | 26 Comments »

When I was a boy, tipping in a restaurant was always a discretionary expense. As a general rule, one was expected to tip 15% of the pre-tax bill as long as good service and good food was delivered. I lived in a state with a 5% meals tax so calculating the tip for a good meal was easy: three times the meal tax. That said, if the food was below par or the service was poor, people regularly tipped less than the customary 15%.

Over time, I noticed that the standards for restaurant tipping were changing. Fifteen percent was no longer enough. The tip for a good meal had to be 20%. And then the tip just had to be 20% even if the meal was not particularly wonderful. As I joined the workforce and found myself eating in “finer” restaurants, I noticed that the server who gave my party mediocre service at an expensive restaurant always received a far greater tip than the server who gave me outstanding service at the diners my friends and I would visit at 4 in the morning after a night of club hopping.

I also began to notice that service providers everywhere began to expect a tip. Take out counters sprouted tip jars. Newspaper delivery people started including home mailing addresses in the December newspaper so that Christmas gifts could be mailed to them. It seemed that everywhere I looked, there was a service provider with a hand held out for more.

The expectation that I would need to tip every service provider that I encountered was disturbing. I felt that I had to choose between possibly paying out money that I did not feel I should have to pay, or being placed in an awkward situation where someone expected me to pay them money that I was not about to release. It made dealing with a lot of service providers rather unpleasant.

After a few years of erring on the side of tipping, I realized that I was being silly. I had to come up with a model for offering tips that made me feel good about my tipping decisions and that also provided appropriate compensation to the right service providers. After a year or two of working with various models, I came up with the following plan.

Restaurant Tipping

If you have never worked in the food service industry, you need to realize that first and foremost, being a server is not an easy job. Juggling the needs of multiple parties seated at your tables, staying on top of bartenders, kitchens and busboys so that your tables remain happy, carrying heavy trays, and generally dealing with the public – none of it can be described as fun. Moreover, restaurant servers are usually not subject to the same minimum wage laws that other workers enjoy because the laws anticipate that servers will receive supplemental pay from their customers.

Although I care about saving money, I never want to be cheap with servers, especially if I feel that I will visit their restaurant again. I view my tips both as goodwill generators and as an incentive to the staff not to spit in my food (which I have witnessed firsthand during my college years). Accordingly, I established 15% of the pretax bill as my usual minimum for tipping and 30% of the total bill as my maximum. The 30% is high, but if I spend $15 on breakfast for a friend and I, and I enjoy the experience, I am happy to pay out the extra dollar or two to compensate the server. At the same time, if dinner for two costs $100, and the service has been mediocre, I am much more likely to offer a tip on the lower side. Ultimately, I decide how much I appreciated the server’s service and I decide what tip will make me feel good.

Take Out Counters

I do not feel that it should be necessary to tip the counter help at a takeout counter. I do not tip people at a drive-through window or the staff in a kitchen so I do not see any reason to tip the counter help at a sandwich shop or elsewhere.

Hair Stylists and Barbers

Like restaurant servers, hair stylists and barbers rely on tips. If I am using the same barber or stylist repeatedly, I try to tip about 20% of the total bill. The difference between 10% and 20% is minimal for such a small charge but the goodwill I get from tipping well can result in preferential treatment later when the barber shop is crowded.


Visiting a hotel can be an exercise in handing out money. I avoid tipping at hotels by avoiding use of service providers who will expect a tip. I carry my own bags so that I do not need to tip the bell hop and I research my own restaurants and activities so that I do not have to tip the concierge. If I absolutely must tip the bell hop, I offer $1 per bag up to $5 and if I absolutely must tip the concierge, I offer $5 regardless of the service. I always tip the housekeeping staff $1 per day (as long as I have been neat) or $2 per day if I have asked them to do a lot of extras (extra towels or blankets, for example).


On the rare occasion when I check my airline baggage at curbside, I always tip $1 per bag with a minimum of $5. I have no idea whether that is customary but I always feel that there is a greater likelihood of my baggage being ready for me at my destination if I tip the Skycap!

Home Services

I usually assume that if someone is performing a service for me in my home, they are paid appropriately by their employer. Accordingly, it would be rare for me to tip a service provider unless I really felt that they went above and beyond the call of duty.

At the same time, if I regularly use someone’s services, I always try to make sure that I give him or her a good Christmas bonus or tip. For example, Tony – my lawn guy for the past 10 years – gives me great, reliable service that would cost me more if I tried to do the work on my own. I do not know how he does it but he keeps my lawn and shrubs looking great and has never missed a week in the decade that he has worked for me. I would feel horrible if I did not remember him with a little extra something at the end of the year.

What do you customarily tip? What do you think about my tipping patterns? Am I too cheap or too generous? What service providers do you think deserve to be tipped? Are you a service provider who thinks tipping needs to be introduced to your services?

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  • Ed says:

    Nice plan. Thanks for sharing.

  • Debra says:

    In a restaurant I tip from 15% to 20% depending on service. But I also add on if my 10 month old is with us and tosses a ton of food on the floor. What lowers the tip? Lousy food, never refilling our drinks, or calling a group of women “you guys” (my pet peeve). No, I wouldn’t really lower the tip for the last thing.

    I tip the hairdresser 20-30% and $1 at counter service if you order but then they bring the food. I tip at the sandwich shop because they know me there and they are generous with my sandwich stuff because I tip and I’m friendly.

    $1 a bag at the skycap.

    When I’m not sure I generally tip.

  • Julie says:

    I worked as a waitress for many years. We wer paid $2.01 an hour back in the 80’s, now they only get $2.15. what many don’t know is that the waitresses are also expected to clean the restaurant also. We not only had to clean everything, but also fill up the food bar and run the register.

  • M E 2 says:

    I absolutely refuse to tip at any place that has the “balls” to place a tip jar on the counter. They’re paid to provide goods / a service, just as I have to pay to receive said goods / service. Do I receive a discount if/when I serve myself or just because I showed up? @@

    R I D I C U L O U S !!!

  • Analise says:

    I pretty much follow the same guidelines that you use. The only exception is on the rare occasion that we have gotten a rude or surly waitperson who acts as if s/he is doing you a favor by waiting on you… then I have tipped only 10% as a message that we were not happy with the service. Why would anyone want to reward extremely poor service at the same rate as minimally acceptable service?

    As far as goodwill to keep the waitperson from spitting in your food (presumably the next time you visit), if the service is so bad that we resorted to leaving a small tip, it is unlikely we would want to go back anyway.

  • Chris says:

    The likelihood is that decent people give decent tips. It is more the case that the most demanding patron tips on the low side.

    My practice is to over-tip people who work in eateries where your total bill is not going to amount to much. Esepcially, if they give good service with a smile.

    A smile goes a long way.

  • Randy says:

    I find the whole concept of tipping to be distasteful, and feel the entire cost of the product+service should be reflected in the bill.

    Nevertheless, it’s the system we have, and so I generally tip 10-15% for waiters/waitresses, but not for drive-thru or counter-only service.

  • A Marino says:

    I did waittress work years ago and you didn’t necessarily get an automatic tip. If you weren’t a good waittress, you didn’t receive alot in tips and some found out that it wasn’t the job for them.

    Tipping has gotten way out of hand. As for tipping at the counter, I personally resent that. If someone seats me at a table, brings water to my table, takes my order, brings my meal and refills my beverages – they’re do a tip. I have used their facility, their glass wear,and their AC. Most of these people who work behind counters make an adequate wage. If someone make something special for you, you can tip them privately.

  • GAURAV BHOLA says:

    You have certainly clarified to a lot of people tipping standards. I do believe that in the US, tipping is out of control. I have dined at many places that have not met expectations in service and/or food; thus tipping was adjusted accordingly.

    But I have noticed as have you, that even in delivering poor service and/or food, still the maximum level of tip is seen as an entitlement.

  • audrey says:

    I don’t punish a server because the food is not up to par. It’s not their fault the standard of cuisine is not up to my par. I always tip 20% for the extra 5 why quibble? It’s easier to figure out too. That’s a tough job anyway you slice it. Hairdressers and other beauty services, 10%. The prices are generally high for the service and the wages are not as low as restaurant industry. If you’re paying $150.00 for highlights and a haircut are u really expected to toss in another $30.00?? Not me, baby. I’ll save it for the server.

  • RBC says:

    I work in finance so i usually tip around 100% – 200% if i wanna sleep with her

  • martha says:

    Hey Randy, With that 10-15% tipping strategy, I’m sure you get your money’s worth with service. At my restaurant, we have guys like you who tip between 10-15% but eat the free bread, enjoy their free water, free refills, ask for their dessert to be heated, their leftovers bagged up, etc., then leave the server $2. Servers always wonder what they did wrong. I train my servers to look at their overall percentage at the end of their shift and don’t let guys like you get them down.

  • MLH says:

    I agree with some of your article. I have a daughter in College that works as a server for money for school. U can not believe how many people leave with out tipping. She is paid 2.10 a hour, which lets face it doesn’t even pay for her gas to get to work or school.She privides good service to the patron and many times the nasty kids, to not be recgonized for her work has left a very bad taste in her mouth.
    As For Hairdressers… I am a licensed cosmetologist in 5 states,and instructor in 2. Tips have always been a source of contention. As a trained and licensed professional I don’t accept tips. Why should I? I am paid what the market will bear.The clients that come to me because of my professionalism and expertise, Hairdresser or barber should get the education they need to charge for a living wage. Xmas is a different story. I give gifts to clients and they to me, I do always give a gift that hopefully will bring me a monetary return in the new year,( like sample shampoo’s conditioners, etc)
    Just thought I would give my 2 cents.

  • Jo says:

    I am very happy to tip 15% to 20% on services. I am from Africa and the standard of service here is exceptional.

  • Gail says:

    I tip my hairdresser as she does something for me that I can’t do myself and that is make me look good! When I see her I always have a check pre-written with the tip included. She knows I come prepared and she does a great job.

    When dining out I almost always leave a tip, but if the service is terrible, I don’t tip. Tipping was originally given ‘to insure promptness’, now it is about service and if the waitress ignores you, gets your order completely wrong, never refills your glass, etc. why would we reward for lousy service? We do tip well and generously for great friendly service. However, if the food is lousy, it isn’t the server’s fault and we still give the tip, but make sure the server knows to let management know we weren’t happy unless you get the dreaded combo of lousy food and lousy service.

    Those counter tip jars we always ignore. The first one I ever saw was in Boston about 15 years ago and I was stunned. Why would these guy expect a tip when all I was doing was buying a brownie? I actually wondered if their boss knew they were doing this! There is one place in town that has a tip jar and they put a notice as to what charity or fund is getting the tips, in other words if you put a tip in the jar, you are just donating to a worthy cause.

    I find it interesting to see those charts in magazines and the paper about what you should tip people and one of the people inevitably on the list is the mailman who is not supposed to be offered or given tips or gifts at all! It is against the law. Quite frankly, I would bet most post office personnel are making more than I am plus they have great benefits.

  • Topwaystosave says:

    I think it’s crazy waitstaff are responsible for cleaning the restaurant and all that other stuff they have to do. They’re paid $2 because they work on tips, but when they’re done serving customers they should either go home and the restaurants should pay cleaning people to clean or change the wait staffs rate of pay. Restaurants are having waitstaff clean floors and polish silverware for way less than minimum wage and I think its outrageous.

    Either laws should be passed regarding this or too bad there isn’t some sort of waitstaff union.

  • Sherry says:

    Drive thru workers should get tips too! I work at Starbucks Drive-Thru and it’s a hard job. We take orders, make the orders and get to know the customers while they wait. We also pride ourselves in knowing our regular customers’ orders. Add in cold Canadian winters that blow into our window (and we keep it open the whole time the customer is there waiting) and it’s a tip-worthy job!

    Obviously, quality of food and service are primary indicators of what size tips you give (if any), but just don’t forget about your drive thru servers, they may be working hard for you too.

  • minny says:

    When in the USA I am amazed at just how many different people expect a tip. Tipping everyone for everything regardless of quality of service is so subservient – not at all what I had expected the American philosophy to be.

    I tip here in the UK – but only sometimes and only 10% – 15%. I have never been asked for a tip in the UK and I have never been told a tip was not enough. I have in the USA!

    Using tips as an excuse to pay poor wages is appalling. Julie saying a waitress only earns $2.15 an hour shocks me!

  • martha says:

    I own a restaurant. Our work schedule is not the same as a traditional full wage job. If a server works lunch he/she works from 10:30 until about 2 or 2:30– only about 4 hours at the most. If we paid them minimum wage, now 7.25 in NH, they would make about $32 before taxes. Not really worth much. But with tipping they average $10-$20 an hour (sometimes more) plus their $3.26/hr wage.(but remember, only for about 4 hours.) If they worked an 8 hour shift that would be pointless, because not a lot of people eat lunch or dinner at 3:30. Servers need to work when customers want to eat.
    The tipping custom exists. If you don’t like it, don’t take it out on the servers. They are some of the hardest working employees I have. Try to change the system from a higher level. Servers are trying to pay their rent just like everyone else. By the way, my servers are eligible for health insur, pd holidays, vacation, and 401K. Don’t eat out unless you can afford to pay 15-20% tips, if the service is good. We are definitely seeing people tip less since the economy went south. That’s just mean.

  • Gail says:

    Martha, To change the system, it has to start with YOU the restaurant owner. Start paying your folks an adequate wage with the benefits you mentioned, post signs saying that our prices may be a bit higher but that is because we PAY our servers an adequate wage and there is no need to tip here and no tipping is allowed. Blaming the tipping on your worker’s schedule is as silly as a parttime office worker being paid only $3.25 hour because they only work 4 hours a day. There is NO law that states you have to pay your servers the bottom of the barrel wages and expect customers to pick up the rest. Paying servers a reasonable amount starts with the owners. Your post makes it clear that you appreciate your servers but not to the extent of paying them enough. YOU are the higher level that needs to change what is happening, not the customer, not the servers, and we definitely don’t need a law changing the system–it has to be the restaurant owners themselves. What higher level do you think can do this change? Why ask for a rule/law to do what you know is right to do? America needs to stop expecting someone to legislate necessary changes and start doing what is a right without a law forcing them into it.

  • DRS says:

    The wife and I enjoy nice bottles of wine when we dine out. If we eat $80 worth of food, we may have also consumed a $200 bottle of wine. We do not tip 20% of the $280 bill. My practice is to consider any bottle of wine as a $40 bottle and base my tip on that modified total bill. In the example, this would mean I tip 20% of $120 (for good service). My reasoning is that the level of effort and service is the same for a $40 bottle as it is for a $1000 bottle. I would not therefor tip $200 for the latter bottle. We feel $8 (20% of $40) is a reasonable tip per bottle of wine presented.

  • Ann says:

    I grew up with the 15% rule and am generally somewhere around there except for breakfast or inexpensive meals. A good server can work their butt off keeping the coffee topped up whie I’m still half asleep and deserves more! lol

    That being said, I also did a lot of travel to the UK where a 15% service charge is already included in the tab. Only if service was exceptionally good would I add anything in addition or, if I was getting room service, I’d hand the guy or gal who brought it a pound or two or so. Just a note that people who travel overseas need to check their bill for built-in’s!

    I admit that most of the time I don’t tip whoever takes care of my room at a hotel unless I’m staying more than a night or two. I think that this sort of tipping made sense when the people who traveled were monied and the people who did these things actually provided added service, but today…

    I have a simple haircut at a low cost salon, so I tip my stylist more. The poor girl is going to school and does a good job and deserves every penny.

  • David G. Mitchell says:

    I just found a website that purports to explain current tipping standards. For those who are interested, here is a link to tipping standards in the USA:


    And some countries outside of the USA:


  • Chris says:

    I normally tip 15% at restaurants. I don’t tip when I order and pick up my own food, but usually tip a dollar or two when they bring the food to me. I don’t tip lower than two dollars even if all I order is something that is small.

    What bothers me is this entitlement that tipping is mandatory. I really don’t care that you only get paid $2.01 an hour. If you aren’t happy with your pay then perhaps you should look elsewhere for a job.

    Being a waiter or waitress might be considered a “tough” job, but what isn’t really? Should I tip the person who helps me when I call customer service? I am sure there job isn’t easy either. When it comes right down to it, serving food isn’t rocket science.

    Who cares if they get their free water, bread and ask you to box their leftovers. It is a job, and I am pretty sure that this free water and bread isn’t taken out of your check. You don’t actually pay for it and are not entitled to an extra tip because I eat some sourdough.


  • Renagerie » Blog Archive » How much do you tip? says:

    […] stealing this topic from David G. Mitchell over at […]

  • 180th Carnival of Personal Finance says:

    […] a followup to FMF’s question, David G Mitchell from Saving Advice talks about “My Tipping Philosophy.”

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