USA: Tipping and Taxes

[soapsud]

tipping in the USA a little stressed about it

We are going to the states for 3 weeks (our first trip back there in 10 years), and will be staying in 5 star hotels etc, my dilemma is the tipping!!! We don't want to look like hicks-ville travelers.
Are there rules for tipping, how much and to whom. For instance at the hotels, do you tip the door man, the bell hop, the concierge, the maid, the valet and at the restaurants, the waiters, the maitre de, the car valet, what about going to the spa or hairdresser, and of course taxis, it is all so stressful, do we need big pockets full of small notes.
I read recently in a survey that the one think that would make travelling a lot easier was to do away with tipping, as it was stressful when you first arrive at your hotel, looking for the right notes to give, and who to give the tips too.
I have read some stories about porters in the US hotels, standing with their hand out. disgruntled because they were not tipped enough.
any advice much appreciated.

 

[anat0l]

Re: tipping in the USA a little stressed about it

Burns: Bravissimo, Luigi! Bring us your finest bottle of vino!
Luigi: Hey, you trust-ah Luigi, huh? He knows-ah what for to make-ah really nice the amore.
Jackie: Oh, Monty, I've never been to a more romantic restaurant.
Luigi: [heard off-screen; entering kitchen] Hey, Salvatore! Break out the cheap hooch for Mr. No-Tip and the dried-up-ah zombie he's-ah captured!

Yes the world would be a lot easier without tipping. But it's in America, so get used to it whilst there.

Definitely don't be all uppity and insist on never tipping. This is never good, no matter what your beliefs on the subject are. Sure, in principle you may be right, but don't expect to be sociable, as a minimum.

That said, arm yourself with some loose change - i.e. plenty of $1 and $5 notes. Usually when you change currency you might well end up with some of these, especially if you end up "cleaning out" the bank's daily stash of US dollars during your conversion Another alternative is to break large bills by going to a store or something when you arrive in the US and buying a small item like a chocolate bar, then insist on some loose change (explain it to them, they should be alright with it).

I think tipping is not so annoying once you get used to it. Sales tax (and other taxes) are more annoying - unlike Australia, marked prices do not have to be all-inclusive of taxes in many jurisdictions. For example, a hotel room in New York may be subject to any of about 3 kinds of tax which is added to the advertised room rate that you see on the website.

Now for how much should one tip. In general, expect to pay anywhere between 15% (optimistic!) to 25% of your expenditure for tips where applicable. This is not the hard rule, it's just a budgeting guideline. It probably pays for you to be a little bit on your toes with math (can you quickly calculate/estimate 15% or 20% of an amount?)

To get you started, check out the USA article in Wikitravel and skip to the section labelled "Tipping":

United States of America - Wikitravel

This thread on Flyertalk has a nice rundown on tipping; you can also add your question to it (I'm sure there'll be no problem having the thread bumped, even though it's showing its age):

Tipping in America? - FlyerTalk Forums

Yes there are hundreds of posts there (it probably helps to join as a member of Flyertalk (free) and then go to the Control Panel and change the number of posts to the maximum, so you don't have to keep changing pages frequently), however there is a wealth of information there.

I've posted some questions of my own about tipping in this post:

FlyerTalk Forums - View Single Post - Tipping in America?

And the replies to my questions are here:

FlyerTalk Forums - View Single Post - Tipping in America?

and

FlyerTalk Forums - View Single Post - Tipping in America?

Some general comments:

• If you don't like the service, call the manager. If it doesn't get resolved to your satisfaction, you don't have to tip; at least you have a verified reason. But not tipping (or tipping a penny) should be a last resort. Bad service may simply warrant a lower tip (e.g. 10%). In any case, "undertipping" may result in someone chasing after you - be prepared to give a good reason (it doesn't mean you're in the wrong, but you can't just willy-nilly undertip or not tip at all).
• Be careful in restaurants: if the food is bad but there is nothing wrong with the wait service (or it is excellent), a lower tip is not necessarily the appropriate action! In this case, provided the tips aren't pooled and shared with the kitchen, you are penalising the waiter who offered you good service; the fact that the food was not good is not his/her fault. Again, call the manager (may be able to negotiate discounting your bill or offering free courses / replacements).
• Where there is horrid service - with or without a manager - no tip may be applicable (e.g. taxis).
• New Yorkers seem to expect a solid 20% as a "baseline" tip. Everywhere else which isn't too swanky can probably work with 15-17% as a "baseline".
• Feel free to tip more if the service is excellent.
• If you forget to tip, there's no shame in going back and fixing your mistake (with a profuse apology to go with).
• Try not to let on that you don't know how to tip. Don't ask the person who needs a tip how much you should tip (chances are you won't get an honest answer, or something indifferent like, "however much you think, Sir/Madam"). Also, don't be intimidated by someone who suggests something along the lines of, "Since you are from Australia, you aren't used to tipping. Just letting you know a tip of 20% is customary." Personally, I'd find that kind of insinuation rude and probably tell the manager so, with a resulting smaller tip.

To give you some comfort about hotel porters, well, if they do nothing to help you, they don't deserve a tip, full stop. Merely opening the door of your taxi I don't think qualifies them to get a tip, but carrying bags does. On the other hand, carrying your own bags (and dismissing the porter) can save you the tip, and should not be construed as actively depriving the porter of a tip.

I hope that gets you started.

 

[JohnK]

Re: tipping in the USA a little stressed about it

I read recently in a survey that the one think that would make travelling a lot easier was to do away with tipping, as it was stressful when you first arrive at your hotel, looking for the right notes to give, and who to give the tips too.

I hope this is true and they do away with tipping. I hate the perception of compulsory tipping. I am not totally against the concept of tipping but if I feel like tipping I will tip otherwise I won't tip and I should not have to explain my reasons to anyone. It is not my fault the staff are lowly paid. Put prices up and pay the staff more.

In the US most restaurants include the tip in the bill. I don't normally eat in restaurants preferring take away meals instead.

I also do not buy into the theory 'When in Rome do as the Romans'. Generally they tolerate that Australians are not tippers and most places do dot expect a tip. I have never been refused service, I have never ben told that I have to tip and I have never had anyone chase me down the street.

Right or wrong it is my right to excercise my right. I don't need anyone telling me I wrong and yes I will be going back to the USA in the future as there is nothing mentioned about compulsory tipping when purchasing airline tickets or filling out an ESTA application....

 

[anat0l]

Re: tipping in the USA a little stressed about it

I also do not buy into the theory 'When in Rome do as the Romans'.

Whilst you may exercise that belief in the US and not tip at all, there are other situations and countries where not conforming with local customs or conventions (not limited to tipping here) may result in worse than just an anti-social look, remark or treatment.

Sometimes, exercising a right even if it is completely correct in principle is not worth it. I'm not saying this about tipping in the USA, but more in general.

 

[awilcockson]

Re: tipping in the USA a little stressed about it

I hope this is true and they do away with tipping. I hate the perception of compulsory tipping.

Not going to happen in the US. What a lot of people don't realise is that a lot of people in these service industries in the US get virtually no income at all, except for their tips. It can be a little painful working out the 15%, but I just factor it into the cost of travelling to the US, treat it like another tax and it's not hard to take.

 

[yeldarb8]

Re: tipping in the USA a little stressed about it

Long time US resident, and business owner.

I try to keep the rules simple.

1. New York. 20% of the pre-tax bill just about everywhere unless service is horrid. If horrid, treat case-by-case, use common sense... (e.g.: am I ever likely to need help from this person again?). This includes taxis.

2. Everywhere else. 15% of the pre-tax bill. If horrid service, see rule 1 above. This includes taxis.

3. Luggage portage from hotel carriage porch to/from hotel room. $1 per bag up to 2 bags. $5 for 3-4 bags (total, not per bag). $10 flat for 5+ bags up to one cart full.

4. Luggage on/off hotel/car shuttle buses. I used to tip a $1 but lately I see very few people tipping the shuttle drivers unless it's 3+ bags. OTOH if driver executes a materially time-saving move in my favor, takes a short-cut, skips a stop, whatever, I have tipped for sure on that occasion.

5. Tour guides. Been a very long time since last on my part but the 15% rule is still OK I think.

The tipping thing is unlikely to go away and since it is really a hidden consumption tax the notion that many seem to have that the US is a "low tax" country is just bogus. Plan for it in your budget.

Be aware that in many of the service industries "employees" get no actual salary, just tips. The IRS continues to turn a blind eye to this (no employment taxes collected) thus putting those businesses at actually create stuff and have real employees at a big disadvantage (tax burden wise). Thus, real jobs get exported.

 

[drron]

Re: tipping in the USA a little stressed about it

Dont fret.You have already been given good advice.Yeldarb8 is spot on.Follow those rules and you wont go wrong.my only addition is that in small town USA we usually tip 10% in restaurants and never had a problem,though it doesn't sound like you will be getting out into the country.
Certainly there are attempts to increase the numbers of people you should tip-I see no point.We have been travelling regularly to the States for 30 years and for example have never tipped a maid-never had that commented on even in hotels we stay at regularly and are known by name.
Even in NYC with the exchange rate as it is you will find eating generally cheaper than in our major cities even with the tax and tip added.
And JohnK-I wish the Americans would honour the "When in Rome..".Unfortunately they tip whereever they go even to places where tipping has not been part of the culture.I cringe when I see advice on what to tip in Thailand-easy answer for me-just dont.

 

[serfty]

Re: tipping in the USA a little stressed about it

Not going to happen in the US. What a lot of people don't realise is that a lot of people in these service industries in the US get virtually no income at all, except for their tips. It can be a little painful working out the 15%, but I just factor it into the cost of travelling to the US, treat it like another tax and it's not hard to take.

...

Be aware that in many of the service industries "employees" get no actual salary, just tips. The IRS continues to turn a blind eye to this (no employment taxes collected) thus putting those businesses at actually create stuff and have real employees at a big disadvantage (tax burden wise). Thus, real jobs get exported.

The federally legislated minimum wage for those in industries/roles where tipping is customary (such as waitstaff and bellhops) have a Federally regulated minimum wage of $2.13 per hour:

• What is the minimum wage for workers who receive tips?

Some states have this regulated at a higher rate, eg. in California it's USD8.00 per hour.

I hate tipping as much as the next guy, but when in the USA, $1 bills are your friend.

For more, see here:

• Are you supposed to tip? - FlyerTalk Forums

Waitstaff also pay tax on a certain amount in tips that it is assumed that they have earned, whether or not they actually received it. This is to try and counteract the situation of wait-staff not reporting their tips as income to the IRS.

 

[Oneworldplus2]

Re: tipping in the USA a little stressed about it

Great thread.

I'll be in the states later on this year. It's been 10 years since l last visited the states. Refreshing advice in this thread.

Serfty, good advice. $1 bills will be my best friend.

 

[serfty]

...
And JohnK-I wish the Americans would honour the "When in Rome..".Unfortunately they tip whereever they go even to places where tipping has not been part of the culture.I cringe when I see advice on what to tip in Thailand-easy answer for me-just dont.

The problem is that many USA residents get quite uncomfortable if they don't tip or don't see it happen.

It's so ingrained into their culture.

 

[BAM1748]

Re: tipping in the USA a little stressed about it

Whilst you may exercise that belief in the US and not tip at all, there are other situations and countries where not conforming with local customs or conventions (not limited to tipping here) may result in worse than just an anti-social look, remark or treatment.

Sometimes, exercising a right even if it is completely correct in principle is not worth it. I'm not saying this about tipping in the USA, but more in general.

Agree. If in Iran would you not do as the Iranians do?

Tipping in the US is fine and no big deal. Although I've had some slow service there I've never really had horrid service.

I worry about people visiting Oz and experiencing some of the service I have to endure here in Sydney. I'm sure tipping improves customer service in a diner for sure.

Matt

 

[rotator101]

Re: tipping in the USA a little stressed about it

Hello from a US native based in Texas, so this is typical for midwest / south:

Tipping is not included in your restaurant bill unless you are part of a large group (6-8 or more), so read the fine print on your bill if you're not sure. Only exception could be a special theme restaurant. You should tip wherever you get table service; so if you are in a fast food / self service, you don't have to tip at all unless you ask for and receive special service; then $1 is enough. 15% is more than enough; but should include the entire meal (including beverages). 20+% is for good service! You tip in bars too. In larger restaurants, waiters, bus people and hostess all share from a combined tip pool (restaurant determines the % for each). If you are seated at a sushi bar or at the grill table in a teppan style steak house, then $1-2 each person is nice to give directly to the cook (at the end of service).

Hotels: you only have to tip the valet when picking up your car (especially if you are paying overnight valet parking fees) and a $1 or $2 depending on how fast the car arrives is enough. You only tip the porter if he brings your bags to the room, $1-$2 is OK unless you have LOTS of luggage or take lots of his time explaining the room features. Valets at restaurants should also get $1-2, depending on whether the parking is free or not ($2 if free is nice). Maid are optional. Remember at that larger resorts, they now tack on a "resort fee" so you don't have to tip every single person doing their job.

Airports: if you bag check at the curb (outside), then $1 per bag is good; and if porters help you with luggage from baggage claim out to the curb, then $1-2 a bag is good, more if you have a pile of luggage.

Other places: if you coat check and it's free, then $2 when you pick it up. At hair stylist, 10% of the bill unless you had a lot of other services like washing/coloring, then 15% so they share with their assistants.

Hope this helps.

 

[Alanslegal]

Re: tipping in the USA a little stressed about it

ive been to the usa numerous times now and i really dont pay attention to whAt is the tipping norm there, i really dislike tipping esp. when i get the coughpiest of service yet i see a puppy-dog look in their eyes with their paws out expecting a tip :shock:

at restaurants for tips, in most cases i work out 10% pre tax, and round my total bill to the nearest dollar .... this includes rounding down . i have never been chased by the restaurant owner or head chef for being a tight a*** contrary to what people (americans??) would make you believe.

luggage wise at hotels, i'll refuse assistance from the bellboys even if i'm staying at 5 star hotels because of the tipping policy. my belief is that the hotel should be providing that service complimentary, to pay their staff above average wages and training them not to accept tips. its unacceptable that i pay 400 or so a night and have every joe and jane blow in the hotel expecting a tip!

if their employer is paying them soooo little, then stop whining and do something about it, skill up, study - nighgt school, online and distance education, find another job that pays more. its soooo wrong to hide behind a veil that just because i am earning minimum wage that i have a right to a tip! sure there are disadvantaged people out there but im not responsible for saving the world and i as a consumer should be able to exercise my right whether to tip or not.

 

[drewbles]

Re: tipping in the USA a little stressed about it

I'll echo peoples sentiments in general here, and offer some additional advice..

Check your bill in *all* restaurants you dine in. Up until my most recent visits last year, it was customary for them to include an 'automatic' gratuity for tables of 8 or more (as mentioned by others). My colleague and I were eating in a place in Santa Monica CA one night, tipped around 18% (great service and beer/food). Went back a few nights later and noticed that they'd already added 18% on for just the two of us. Needless to say, they didn't get a tip (or any return service, I feel it's rude trying to sneak it in like that). So the first night they got a 36% tip

Also, when in bars, it's good practice to tip an amount around equal to the price of the first drink, if you're planning on spending time there. This will ensure you get looked after both in terms of service, and drink strength (if that's what you desire). A single $1 bill (known as 'a single' over there) per drink thereafter will ensure the good service continues.

In hotels, I simply decline porters. I can quite easily take my own luggage (I usually travel alone anyway so don't take more luggage than I can handle by myself). Concierges at hotels should be tipped $3-10 depending on what they do for you. I have a particularly helpful one at one hotel, and he was tipped around $5 for sorting out a dinner reservation at a restaurant for a friend and I.

One other thing is if you are using dining vouchers (say complimentary included breakfasts etc) where there is table service (so not Hampton Inn's where they have a complimentary breakfast buffet), you still are expected to Tip. The Hiltons I stayed in offered me free breakfast, but I still needed to tip 15% or so for being seated and being offered coffee/juice/water (with many refills).

It's a necessary evil. I just count it as part of the experience and expenditure of visiting the states.

Australians are notorious in the USA for being lousy tippers. I've often noticed the bad service goes with this. I've also found that making a joke about it and then tipping is another good way to ensure excellent customer service, providing of course you plan on frequenting the place multiple times (hence why the people in the SFO Admirals Club know me by name, I'm "an Awww-sie who tips!"). Don't fall into the trap of 'I don't do it at home so stuff them i'm on holidays'. They earn stuff all, because management are greedy and the minimum wage is generally lousy as others have mentioned. I'm a strong subscriber to "when in Rome" even though others are not.

Note though, you are not required to tip the TSA. They feel you up free of charge </tongue in cheek>

 

[burrco]

Re: tipping in the USA a little stressed about it

It does become second nature after a while.

I do find the concept of tipping in five star hotels to be annoying as you are supposedly paying a price premium for service which in effect has been outsourced to a myriad of independent contractors (valet, bellboy, concierge, housekeeping etc).

Agree that it is important to double check the bill at a restaurant, as often in tourist areas, you can get the "foreigner" bill with an amount already added in.

 

[straitman]

Re: tipping in the USA a little stressed about it

Agree that it is important to double check the bill at a restaurant, as often in tourist areas, you can get the "foreigner" bill with an amount already added in.

I was at the HAI convention in Orlando a few years ago and a (local) friend paid the bill and he go caught by this. I'm sure they enjoyed the 36% tip.

 

[yeldarb8]

Re: tipping in the USA a little stressed about it

The federally legislated minimum wage for those in industries/roles where tipping is customary (such as waitstaff and bellhops) have a Federally regulated minimum wage of $2.13 per hour:

• What is the minimum wage for workers who receive tips?

Some states have this regulated at a higher rate, eg. in California it's USD8.00 per hour.

I hate tipping as much as the next guy, but when in the USA, $1 bills are your friend.

For more, see here:

• Are you supposed to tip? - FlyerTalk Forums

Waitstaff also pay tax on a certain amount in tips that it is assumed that they have earned, whether or not they actually received it. This is to try and counteract the situation of wait-staff not reporting their tips as income to the IRS.

Be careful not to drink too much of the Cool-Aide...

Federally regulated minimum wages. Probably the most unregulated and unenforced provision of US Labor Law. This "law" is ROUTINELY ignored. I have NEVER EVER in 20+ years of doing business in the US ever seen, heard of, nor personally experienced a minimum wage enforcement action. Not saying there is zero enforcement, perhaps it does happen, but I have never seen evidence of any. There are many restaurants I go to on a regular basis where I know the staff well enough to know if they are getting a wage and the answer is "no". It's all tips.

 

[serfty]

If they are not getting paid a wage, even a miserly $2.13 per hour then there is something illegal going on. As you indicate, staff in such a situation would not be paying ANY tax for their work. So the employer pays less (wages and tax), the staff pay no tax on their earnings (tips).

I would not attend an establishment if I knew this to be the case; l all I can do is assume they are on the minimum wage and pay tax, then tip accordingly.

In any respect, this make no difference to the fact that tipping is ingrained into US society and patrons are expected to tip.

 

[awilcockson]

Re: tipping in the USA a little stressed about it

the staff pay no tax on their earnings (tips).

I think it was mentioned earlier, but the IRS "assumes" that people in certain work sectors will earn a certain amount of tips, and automatically taxes them accordingly. So if the employee doesn't earn at least the assumed level of tips, they are paying taxes on money they never earnt.

I've only been to the US a couple of times, but my key rules are:

* Always make sure you have a good supply of $1 notes.
* Carry my own luggage
* Always tip the bar man!
* 15% in restaraunts, but as mentioned by others, check the bill carefully to make sure the tip hasn't already been included.

 

[JohnK]

Re: tipping in the USA a little stressed about it

Whilst you may exercise that belief in the US and not tip at all, there are other situations and countries where not conforming with local customs or conventions (not limited to tipping here) may result in worse than just an anti-social look, remark or treatment.

Sometimes, exercising a right even if it is completely correct in principle is not worth it. I'm not saying this about tipping in the USA, but more in general.

Perhaps I used the wrong term. I do not cause any trouble when I am overseas and I do observe the customs of the country I am visiting and ensure that I do not do anything to offend anyone or that it does not get me into trouble.

Unfortunately that does not include tipping. I refuse to buy into the theory that I need to carry a wad of $1 bills with me and that everyone should be tipped. If tipping is included in the bill then I will pay it. If tipping is not included in the bill then I will think about it. Most times I do leave something behind and believe it or not they do get a shock when they see an Australian tip.

I will generally tip if I eat at a restaurant but that does not happen very often. I will generally tip a porter if they happen to get my luggage before I have had the chance to stop them. Who else should I tip? Just some that come to mind.

Should I tip if I purchase a ticket at a train station? No
Should I tip at McDonalds? Burger King? Depends.
Should I tip a taxi driver? Leave loose change.
Should I tip a maid? No
Should I tip check-in staff at the hotel, airline etc? No
Should I tip the barmaid? Leave loose change.

I am not a harsh person but I do not believe in tipping anyone and everyone. I really do not see any reason to tip people in the above categories. It is up to me.

And JohnK-I wish the Americans would honour the "When in Rome..".Unfortunately they tip whereever they go even to places where tipping has not been part of the culture.I cringe when I see advice on what to tip in Thailand-easy answer for me-just dont.

And this is one of the biggest problems facing a tourist in Thailand.

It is a fact of life that Thais do not tip. They will generally leave loose change (such as 1, 2, 5 baht coins) if they have a large(-ish) bill in a restaurant. They may also leave some loose change in a tip jar at some of the convenience stores. Live and go out with a local and you will understand.

Yet a falang is expected to tip just because of the silly custom started by some tourists.

By the way I do tip at restaurants, cafes and bars in every country I visit if I feel the service warrants tipping. The amount of the tip is entirely up to me....