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The new way of calculating a restaurant tip
Old 08-10-2016, 10:11 PM   #1
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The new way of calculating a restaurant tip

I've been meaning to ask this question for awhile.
I returned to the states about a year ago from a very long stay overseas. When I started going to restaurants here, I noticed that many restaurants have programmed their billing device to also print the different tip percentages which I thought was helpful but noticed the percentages are using total amount owed including the sales tax rather than only the items ordered. I can understand the reason but still thought it was odd to expect a tip on the tax as well. This forces me to continue to calculate the tip.
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Old 08-10-2016, 10:26 PM   #2
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I always calculate it myself not based on the tax, as why should I tip the taxman ?

Then I factor in my experience at the restaurant.

Finally, if its a buffet restaurant, where I go and get my own food, I reduce the tip as I deserve part of the tip, since I had to do part of the work.

The reason restaurants print it is to bump up the tip amounts.
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Old 08-10-2016, 10:28 PM   #3
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For most people the difference between pre tax and after tax is minuscule. If your bill is $100 you might have $8 in tax so an extra $2 to the server. How much are you spending per meal that this really matters?
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Old 08-10-2016, 10:32 PM   #4
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I noticed this too. It is either very sloppy accounting on their part or intentional fee inflation. It puts me in a mood of trying to be cheated so I compensate by rounding down.


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Old 08-10-2016, 10:41 PM   #5
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I always calculate the tip mentally,or on my phone if I brought it. I ignore the printed suggestions.
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Old 08-10-2016, 10:46 PM   #6
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Originally Posted by retirementguy1 View Post
For most people the difference between pre tax and after tax is minuscule. If your bill is $100 you might have $8 in tax so an extra $2 to the server. How much are you spending per meal that this really matters?
I pulled out a reciept to check, and here I was charged 12% tax, so that would be $12 on a $100 bill.

But the point of the matter is why am I tipping the taxman ?
It is deceptive as they say 15% = and then it is on the total bill including tax and not the meal price.
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Old 08-10-2016, 11:14 PM   #7
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I usually tip the server $2 per person at the table at breakfast or lunch, and $3-$5 per person for Dinner. I sometimes adjust a little for great or crappy effort.

The server does the about same work and effort regardless of the meal/ drink tab IMO, as always, my opinion is worth every cent paid .

( this used to drive my late auant crazy , she thought I tipped way too much , even when her little darling grandson was abusive to a server, as often happened )
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Old 08-10-2016, 11:14 PM   #8
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Originally Posted by Sunset View Post
I pulled out a reciept to check, and here I was charged 12% tax, so that would be $12 on a $100 bill.

But the point of the matter is why am I tipping the taxman ?
It is deceptive as they say 15% = and then it is on the total bill including tax and not the meal price.
There is no set rule when it comes to pre tax and the after tax amount. This is just a social convention. I worked in several fine dining restaurants over the last ten years. Most people tip on the after tax amount. I really don't care. People are going to tip what they tip. Often times without regard to the quality of service. With regards to this forum, most are LBYM and aren't spending more than $30-50 per meal for a couple. The tax is negligible. When I go out to eat by myself and the bill is $10-15 I will always leave $4-5.

Often times people have to tip out the people they work with. I remember I had one check for three people. It was $450. They stiffed me (no tip) and I still had to tip out $45 to my busser/runners. I actually lost money when I offered very good service.
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Old 08-11-2016, 02:12 AM   #9
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I usually use the recommended tip amount for 15-20%, depending on the quality of service, but I typically use my credit card and round the tip so the total is a whole dollar amount. If the recommended tip amount includes tax or not, it doesn't matter much as the difference tends to get lost in rounding.
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The new way of calculating a restaurant tip
Old 08-11-2016, 04:25 AM   #10
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The new way of calculating a restaurant tip

Quote:
Originally Posted by Sunset View Post
I pulled out a reciept to check, and here I was charged 12% tax, so that would be $12 on a $100 bill.

But the point of the matter is why am I tipping the taxman ?
It is deceptive as they say 15% = and then it is on the total bill including tax and not the meal price.

Well you aren't tipping the taxman, you are still just tipping the wait staff. And if you are looking at the 15% line on tax of 12%, that's still less than a $2 difference on a $100 bill just like retirementguy1 said. If that's a concern I think you'd save far more money living somewhere with a lower sales tax than worrying about this.

The way I look at it is, me kicking in an extra dollar or two is going to mean nothing to me. But having worked for six years as a waitress, if every table I worked each night had kicked in an extra dollar my total pay would have increased about 20%. When I was working 30 hrs a week while attending school full time and barely making ends meet, that 20% would have been the difference between me crying over the electric bill (it happened) and feeling comfortable with my bank account. I have no problem kicking in a little extra to help somebody else out in that situation. If I can afford a $100 dinner, I can certainly afford to make the wait staff smile after they helped me enjoy that dinner.

ETA: I never understood why this is a sticking point for people. I always understood the tip to be 15 to 20% of the service. As a customer I agree that the tip is part of the cost of the service. Why wouldn't I tip on the tax?
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Old 08-11-2016, 05:54 AM   #11
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Originally Posted by retirementguy1 View Post
I remember I had one check for three people. It was $450. They stiffed me (no tip) and I still had to tip out $45 to my busser/runners. I actually lost money when I offered very good service.
Wow. I would expect the wait staff to revolt over such a policy. Is this some tragedy of the commons problem? Do they require a minimum amount because otherwise the wait staff can't be relied upon to report cash tips accurately? Do a lot of supposedly real tips come in at a surprising 10%.
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Old 08-11-2016, 06:20 AM   #12
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I have never tipped on the "pre tax" amount...maybe because it's usually fairly negligible or...well, I don't want to spend the time doing the math.

I waited tables for a few years, so as others have mentioned, tend to tip about 20% (I also round to whole dollar on my CC to help detect fraud) unless service is crap.

I have been watching a show called "Adam Ruins it All" (basically host points out the fallacy in people's understanding of common things..like diamonds being precious) and one of the episodes is supposed to be on tipping. I haven't watched it yet, but I think it might irritate me somewhat.
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Old 08-11-2016, 06:32 AM   #13
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I think you are being a little overly sensitive here. Tip whatever you want based on the service you received. Also, in no way are you "tipping the taxman" as the small increment will simply form part of the tip to the server/restaurant. I like to be generous in tipping, around 20% and if I give a little tip on the tax it certainly doesn't bother me.
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Old 08-11-2016, 06:40 AM   #14
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As a matter of information, going back up to 50 years, was the amount the tip was based on, the pretax or after tax amount? I always thought is was the pretax amount.
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Old 08-11-2016, 06:43 AM   #15
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Originally Posted by MJ View Post
As a matter of information, going back up to 50 years, was the amount the tip was based on, the pretax or after tax amount? I always thought is was the pretax amount.
I can't go back that far, but I can say that from 1990'ish and on, I have tipped on the after-tax amount. Also, when I worked at a chain bar and grill, we had to "tip-out" to the bar and bussers 2% of your sales and if I remember correctly, your sales were calculated AFTER tax.
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Old 08-11-2016, 07:32 AM   #16
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As a matter of information, going back up to 50 years, was the amount the tip was based on, the pretax or after tax amount? I always thought is was the pretax amount.
As long as I can remember people have been arguing about it. I doubt there has ever been an agreed upon methodology. I suspect most people agree that either approach is OK with those of us working from the total bill going for simplicity and tilting toward a large tip. I would guess that those of us who have worked for tips (I was a cab driver) lean towards tip generosity. How about the waiters and waitresses out there. What do you tip?
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Old 08-11-2016, 07:37 AM   #17
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Originally Posted by Sunset View Post
I always calculate it myself not based on the tax, as why should I tip the taxman ?

Then I factor in my experience at the restaurant.

Finally, if its a buffet restaurant, where I go and get my own food, I reduce the tip as I deserve part of the tip, since I had to do part of the work.

The reason restaurants print it is to bump up the tip amounts.
Well said.
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Old 08-11-2016, 07:42 AM   #18
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Originally Posted by FI by 2024 View Post

ETA: I never understood why this is a sticking point for people. I always understood the tip to be 15 to 20% of the service. As a customer I agree that the tip is part of the cost of the service. Why wouldn't I tip on the tax?
I don't know about most people but for me I hate the presumption that I should tip on anything but service. there is no service connected with the sales tax.

I've had lousy service where I'm still expected to tip at least 15% and the mantra from service people is about how low their salaries are. Well I'm sorry their salaries are low but I'm not about to make up for that.
If I get lousy service and leave nothing, then I'm the bad guy.

I tip on the pretax amount based on service. Your wages do not in any form or fashion enter into my decision. sorry. Now some times if I'm out with friends will simply tip on the entire amount for simplicity
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Old 08-11-2016, 07:47 AM   #19
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If the service is bad, I pretty much just don't go back to that place. I still tip them some (they aren't bad people - I hope - and need to feed themselves).

Otherwise, I don't sweat the details. Roughly calculate 20% and round up to a full dollar amount.

It's easy to do in your head - move the decimal point over giving 10%. Double this giving 20%. Round up to an even dollar.

Done.
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Old 08-11-2016, 07:48 AM   #20
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I think you are being a little overly sensitive here. Tip whatever you want based on the service you received. Also, in no way are you "tipping the taxman" as the small increment will simply form part of the tip to the server/restaurant. I like to be generous in tipping, around 20% and if I give a little tip on the tax it certainly doesn't bother me.
I agree with this. If the recommended tip is based on the after-tax total, that is probably a sign that the wait staff influenced how the bill is presented to the diner. In this situation we're still free to tip any amount we choose.

There's no guarantee that tip goes to the wait person, the restaurant management decides how the tips are allocated.
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