Guide to Tipping Etiquette – Is 20% the New Standard?

Written by David Bakke

David Bakke worked in the restaurant business as a manager for nearly 20 years and now shares his tips and insights on personal finance issues on Money Crashers.

As a veteran of the restaurant management industry, I understand both sides of the coin when it comes to the issue of tipping. You, the consumer, want to save money when dining out, yet you also want to fairly compensate your server.

The waiter or waitress expects a decent tip from each table they provide service to, as the hourly rate is typically less than minimum wage. In fact, in the state where I live, most servers earn $2.18 per hour. For many years, the standard tip was 15% of the bill, though over time, 20% has become the standard percentage to calculate a tip.

On What Criteria Do You Base Your Tip?

The average server earns a wage of $2 to $3 an hour. Therefore, wait staff make their livelihood off of their tips, not their base salaries. You should always keep this in mind when determining the amount of the tip. What additional factors do you use to calculate the tip? The food? The service? The decor?

You should tip more for fantastic food, but never tip less if the food is sub-par. Additionally, don’t reduce the size of the tip for a mistake in the order. You shouldn’t penalize the server for a mistake in the food preparation, as your server does not prepare your food, and you can’t penalize someone for a mistake for which they are not responsible for.

Base your tip on your total food bill before applying discounts, coupons, or gift cards. Even if you have restaurant coupons or discounts, your server still has to put forth the same effort to serve you.

Here are some additional basic guidelines to help you determine how much to leave for a tip:

1. The Overall Experience
Calculate your tip based on the overall dining experience. If you loved the food, but the server forgot a drink refill, don’t drastically reduce the tip. Mistakes happen from time to time.

The attitude, personality, and perceptive abilities†of the server go a long way, and you should expect the server to be friendly and knowledgeable. Exceptionally personable servers might receive something extra.

2. Server Involvement
When you calculate your tip, consider whether your server personalized the service based on your behavior. For instance, if you have a business meeting with a coworker or an involved conversation with your spouse, your server should play more of a peripheral role in the overall dining experience.

However, if you dine with a large group,†and the server makes your party laugh, helps you split the food bill with friends, or does anything extra for the children in your group, he or she definitely deserves a larger tip. This might just mean supplying crayons and paper for the kids. Parents spend the majority of their waking hours entertaining children, and they look at dining out as an escape.†If the server can help occupy your child for any part of the dining experience, leave a generous tip.

3. Promptness and Courtesy
In addition to the overall dining experience and server involvement, leave a larger tip for prompt, courteous service. However, always consider extenuating circumstances. If it’s 8pm on Saturday and the server has five other tables to attend to, you should still leave a decent tip, even if the service isn’t perfect. Expect your waiter or waitress to stop by occasionally, but have realistic expectations.

Tipping at Buffets, Self-Serve Restaurants, and Fine Dining Establishments

Generally, you do not have to leave a standard tip at a buffet or self-serve restaurants, because no one serves you. Dining room attendants working in these restaurants receive an hourly wage that compensates them beyond the $2 to $3 received by restaurant servers. However, a little something for exceptional service never hurts.

For fine dining restaurants, don’t venture too far out of your general tipping practices. However, these servers make better tips because of substantially higher dinner tabs, so you may slightly reduce the percentage you leave servers at expensive restaurants. Don’t be unreasonable, though – if you can’t afford to properly tip, you should eat at home to save money.

Final Thoughts

Go into a†restaurant with the intention of tipping your server somewhere between 15% and 20%, and look for reasons to keep the tip around 20%. Everyone wants to save a buck when†dining out, but you should never look to the tip as a place to save some money. I leave a 20% tip about half of the time, and I add something extra when servers occupy or entertain my child. I also leave larger tips to reward servers for accurately “reading” my table.

Rarely, if ever, do I leave a tip for less than 15%. The service has to be extremely poor to drop below that benchmark.

Essentially, I never tip based on what people think I should tip or to look good in front of my dining companions, and neither should you. Instead, always base the tip on straightforward criteria related to the quality of service received.

What are your thoughts on tipping?

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