There are certain topics that are guaranteed to incite passionate responses. Discussing controversial issues such as religion or politics is bound to land you in, at the least, a spirited debate. Oddly, you'll find that similar vigor and vitriol enters the conversation when discussing tipping etiquette, especially if you bring it up around those in the restaurant industry. The debate over who, where, when, why and how we should tip has become so overrun with conflicting opinions that it's tough to know what to do, particularly if you're in a foreign country. To clear up some confusion (and likely stir up some controversy), let's look at the standards for tipping service staff in some popular vacation destinations, and the rational for each custom.
TUTORIAL: Starting A Small Business Tutorial
The United States
Unfortunately, many workers in America's food industry don't receive fair minimum wages. In some states, tipped employees (workers who collect more than $30 per month in tips) only collect the federal minimum wage of $2.13 per hour. Worsening the deal, tipped employees must claim their tips on their income taxes. For these reasons, it is customary for a diner to tip enough to help boost the server's wage to the prevailing minimum wage.
In most cases, a 15% tip is the minimum that's expected, and 20% or more is appreciated for extraordinary service. In higher-priced restaurants, an evening of 15% tips can easily net a server $100+, but that same percentage at a truck-stop waffle house might only add up to about $20 to $30 in tips each shift.
Canada's standard for tipping is similar to America's; however, the majority of Canadian food service workers receive the standard minimum wage (national average is $9.57). A minimum 15% tip is expected in most restaurants. Some argue that the better wages takes onus off the customer to tip this amount, but there are other factors to consider. Most servers in Canada will have to give a percentage of their tips to their coworkers. At the end of each shift, a server has to tip out 1-2% of their total sales to funds collected for the kitchen staff, hosts/hostesses and busboys.
Legal or not, some restaurant owners even ask their servers to contribute money to a fund to cover plate and glassware breakage and dine-and-dashes - essentially passing on the costs of business to their employees. In light of the previous costs, a 10% tip on a $100 tab could easily mean the server paid money out of his or her pocket to serve that table. Many of these costs are also common to servers in the United States, making their reliance on tips even greater.
In a country where the toilets flush backwards, it may not surprise you to find that Australia's tipping customs are completely opposite from those in North America. Essentially, there is no tipping in Australian restaurants. The minimum wage for servers is $15 per hour, which eliminates any pressure on customers to supplement a server's income. Small tips are appreciated for exceptional service or in upscale eateries, but they aren't expected. While this seems like a great deal for the customer, there is a downside. Taking tips off the table eliminates a lot of incentive for servers to increase customer satisfaction, and the sometimes-lackadaisical service can be frustrating for diners who are used to being catered to.
Many North American servers complain about the stingy tipping habits of European diners, and there's some irony there, given that many North American servers are saving their tips to travel to Europe. Unfortunately, any vengeful American backpackers will find it hard to stiff their industry-peers in Europe. Widely speaking, European eateries add the gratuity to the bill. When the charge for service isn't added, a 5-10% tip is common, or even just rounding up the bill to a whole number is appreciated. This lack of emphasis on tipping causes many European travelers to assume that other continents have the same tipping etiquette. Other Euros are simply resentful of the practice, and refuse to support it.
This became an issue for Royal Caribbean International cruise line in 2009, when customer feedback showed that Britons were reluctant to take cruises that expected guests to tip. Other cruise lines automatically add a service charge, but this system also has drawbacks, as many vacationers report a lower standard of service when the staff has been tipped beforehand. Paying a gratuity in advance contradicts a fundamental rule of business: Never pay for work upfront. Legal precedent on this matter was set in 2004, when a Long Island, New York man won a court case in which he was arrested for theft of services when he left a 10% tip instead of the "mandatory" 18%. The judge ruled, "A tip or gratuity is discretionary…." So, yes, you can choose to protest the suggested gratuities on your bill, but the possible legal costs could make it a costly stand to take.
TUTORIAL: Personal Income Tax Guide
The Bottom Line
Before you eat out in another country, you should know the expectations for tipping. If you're unsure, check the bill or menu to see if any service charges are included. And if not, a 10 to 15% tip should be enough to keep the staff's saliva from your soup on future visits (nah, just kidding, that doesn't happen). Even though many countries pay their service staff better than America does, you still won't find many servers, dishwashers or fry-cooks lamenting the rising costs of caviar or the absence of the Concorde. Restaurant workers are no different than any employee, in that they want to be acknowledged for a job well done. And in the restaurant industry, a tip is the best way to encourage and acknowledge good service. (Financial guru Suze Orman once challenged her fans to go a day without spending any money. Here are the lessons learned from this exercise. See A Day Without Spending, A Lifetime's Worth Of Lessons.)