When Eating Out, Do You Tip On The Bill Pre or Post Tax?

[Badger]

I usually tip 20% pre tax. I am tipping for service not tipping for being taxed. I do like the idea of using the tax for a quick calculation of the tip and then adjusting upward. I also pay cash and not a credit card for three reasons. I want to avoid problems with the card leaving my control and the possibility of identity theft that happens all too often, the possibility of tip adjustment on the bill after I leave as was mentioned earlier, and to make sure the server actually gets the tip and not the restaurant.

Cheers!

 

[Danmar]

20% on total bill rounded up. Most wait staff work very hard. I view it as a way to pass it forward a bit.

 

[rodi]

Is the minimum wage for restaurant staff $2.13 per hour in most states?

This varies by state - here in CA the minimum wage is higher than the federal min. wage. Wait staff gets minimum wage PLUS tips.
You can check out state by state here.
U.S. Department of Labor - Wage & Hour Divisions (WHD) - Minimum Wages for Tipped Employees

In & Out is in CA - so the $12/hour is higher than the minimum wage. But no one tips at In & Out - it's fastfood/counter service.

 

[calmloki]

In'N'Out does things right - they have cheerful competent staff and while they are fast food they are top of the game as far as staffing goes. No tipping.

I try to tip in cash to be sure I'm tipping the waitperson, not the restaurant. There is a risk some of those tips may not be declared on the waitperson's taxes, but its a risk I'm willing to happily take. Figure Uncle Sam doesn't need the money as much as Mr or Ms Poverty wages does.

 

[Lsbcal]

This varies by state - here in CA the minimum wage is higher than the federal min. wage. Wait staff gets minimum wage PLUS tips.
You can check out state by state here.
U.S. Department of Labor - Wage & Hour Divisions (WHD) - Minimum Wages for Tipped Employees

In & Out is in CA - so the $12/hour is higher than the minimum wage. But no one tips at In & Out - it's fastfood/counter service.

I think we are on the same page (see above).

 

[mickeyd]

When dining with DW she always tells me, err recommends, what to tip and I reduce it by 5%. Tip should based on the cost of the purchased food but tax of 8% or so should not be part of the calculations. Aspect of LBYM.

 

[haha]

Tip should based on the cost of the purchased food but tax of 8% or so should not be part of the calculations. Aspect of LBYM.

Seattle tax is ~10%. So if the pretax check is $100, the tax is $10 and @20% tip that tip is an extra $2 on the tax alone. 20% of $100 is $20. 20% of $110 is $22.

Certainly not huge, so imo it is just a matter of preference. I have never noticed anyone not appreciating >= 20% on the pretax check. I have some diet issues, so I always tip more when someone has carefully checked in the kitchen for me.

I tip for service, not to "pay forward". I might well tip less if my eating out experiences tended to be one and done, but I am a repeat customer everywhere we go.

Ha

 

[ChiliPepr]

I always tip 20% after tax, unless it is poor service, usually more when it is breakfast (i like my bottomless cup)

IMHO, if you go to a restaurant with the knowledge that you will tip less than 15%, unless it is poor service, you should not go to that restaurant.

 

[Lsbcal]

DW mentioned that a friend has a little tip card cheat sheet someone gave her. She keeps it under her credit card.

So I made my own and will test it out tonight. It's just a matrix with total bill and tip % (15%, 17.5%, 20%). Rounded the tip to a dollar estimate. Makes it easy when I don't have my glasses on. And it does not tip on the tax (about 8.8% around here).

 

[gerntz]

I don't tip at all when in Europe.

 

[audreyh1]

In Rome, whenever I asked if the tip was included, BEFORE I SAT DOWN, the answer was "yes, all included", but if I forgot and waited until the check arrived I would get an embarrassed apologetic smile and a "no, not included".....

Good one!

 

[audreyh1]

We go back and forth. I think if the bill is small we do post-tax, and usually up anyway. If the bill is high we tend to do pre-tax. If we enjoy the service we tip 20%, unless the bill is low in which case it will be higher.

 

[DROPOUT]

I normally double the tax amount ... Which is 9.25% here ... So, they normally get 18.5% assuming service was OK or better

 

[Sunset]

I usually take 20% of the bill before tax and add that to the bill, ...
If service is particularly good I may a a dollar or two more and if it is really bad i may subtract a dollar or two but both is rare.

That's what I do , plus if its a cheap place I will round up an extra buck.

 

[Fishingmn]

20% pretax

 

[gerntz]

15% is normally more than enough, particularly when there's a significant amount of alcohol on the bill that's marked up 3X or more. Ridiculous. In low price places, tip more as those waiters need it more - they work as hard as those at expensive places.

The difference between before & after tax is small in the grand scheme vs. the actual tip %.

This thread feels like those that tip higher need to let it out to the rest of us to help themselves feel better.

 

[scrabbler1]

That's what I do , plus if its a cheap place I will round up an extra buck.

One time, a few years ago, My LF and I were at a place out of town which was not only a cheap place, but we had good waitress service (she redid some extra takeout food when we saw it wasn't prepared right, probably not her fault), and sat at her table a little long. I tipped her an extra $10. She, probably some early 20s kid, looked like she was walking on air as we left!

 

[sengsational]

U.S. Department of Labor - Wage & Hour Divisions (WHD) - Minimum Wages for Tipped Employees

Interesting table. I never knew how this worked. I knew there was some very low number ($2.13) that the federal government mandated. I always thought that if the server didn't earn enough tips to get above the federal minimum wage (additional $5.12/hr in tips), that was just their "tough luck" and it was up to me to make sure that didn't happen. But they are all guaranteed federal minimum wage. Not like that's a lot, or anything, but different than I thought.

So if your server typically doesn't make more than $5.12/hr on tips, your extra tip dollar is one dollar the employer doesn't have to pay the employee. $5.12/hr seems extremely low (~$40/shift?), but at a place with a low volume of customers, maybe. The range of tips per hour for the US is apparently $1.27 - $15.97 *Quite a wide range.

I found a chart there that was interesting in that "nobody" makes more than $22K. I think maybe there's some hanky-panky with tips, because, in a swanky restaurant, at $40+ per table, 10+ tables per night, I could see getting to the $75K - $100K mark. Or maybe it's just that the site where I found the chart doesn't attract servers making more than $22K.

 

[kcowan]

I am amazed that some governments have decided to give those that can afford to eat out a pass on pulling their weight. It ought to be an easy 10% and up for revenues from meals. Such low hanging fruit...

 

[pb4uski]

I am amazed that some governments have decided to give those that can afford to eat out a pass on pulling their weight. It ought to be an easy 10% and up for revenues from meals. Such low hanging fruit...

You are the first person that I can recall suggesting a sin tax for eating out.

 

[Music Lover]

I found a chart there that was interesting in that "nobody" makes more than $22K. I think maybe there's some hanky-panky with tips, because, in a swanky restaurant, at $40+ per table, 10+ tables per night, I could see getting to the $75K - $100K mark. Or maybe it's just that the site where I found the chart doesn't attract servers making more than $22K.

My friend's daughter works at an average restaurant ($5.99 breakfast, wing nights) and earns about $10k a year in salary and $30k in tips working just 3 days/nights a week. One must take into account that almost no one reports all the tips they earn. She reports about $3k in tips, effectively earning $25k+ tax free.

In a typical restaurant, a table of 4 people could be leaving a $12 - $15 tip on a $70 dinner bill. Times that by 2 seatings of 10 tables and $200 a night in tips would not be unusual. I used to earn $30 - $40 a night in tips delivering pizza in 1980 when minimum wage at the time was a little over $3.

 

[Sunset]

You are the first person that I can recall suggesting a sin tax for eating out.

Well it might be correct, as personally when I was a kid, we only ate out a few times per year mostly for Birthdays, etc.

Now DW & I will go out 2-4 times per week, not expensive places, but really the motivation is lazyness (Sloth) , which is pretty close to a sin

 

[Sunset]

I just looked it up and many places do charge an extra tax for restaurant food at least in IL.

 

[Clone]

So a basic question- not intended to be snarky or anything like that.

If the restaurant is paying less than the minimum wage per hour, and the staff is pocketing the tip money, will the staff end up with paying a tiny amount into Social Security? If the staff reports wages, does the employer pay the employer side of the FICA taxes on those tips?

I could see the situation where folks are pocketing the cash, and when it comes time to draw SS in retirement they have minimal recorded earnings, thus minimal SS income.

 

[M Paquette]

So a basic question- not intended to be snarky or anything like that.

If the restaurant is paying less than the minimum wage per hour, and the staff is pocketing the tip money, will the staff end up with paying a tiny amount into Social Security? If the staff reports wages, does the employer pay the employer side of the FICA taxes on those tips?

I could see the situation where folks are pocketing the cash, and when it comes time to draw SS in retirement they have minimal recorded earnings, thus minimal SS income.

In a job that includes tips, there is an expectation by the IRS that tip income will be reported. It's generally a big ole red flag if someone works a job that usually gets tip income but doesn't report it. The name of the business and other employees with that Employer Identification Number who do report tip income are clues that maybe this taxpayer didn't report something he should have.

Most folks are smart enough to report some of the tip income, at least.