USA: Tipping and Taxes

[serfty]

Of course, as yeldarb8 posts, many in the service industry may be working for tips alone and as such may have no tax assessed on their income at all, as the IRS may have no knowledge about it.

 

[anat0l]

Re: tipping in the USA a little stressed about it

But have you ever tried to tell an American that their culture is flawed? Good luck...

You're right. That's why the Americans are still holding on to dear life to the Imperial system and not moving to the SI system.

 

[Matthew Moore]

Hey guys!

Traveling to Los Angeles and I have been advised that when I am dining out, or paying for a service that the indicated price does not include tax, and also tipping is customary.

I am worried that I am going to get very confused when paying for general things!

Can anyone give any advice, is there an app to help you!? haha

 

[awilcockson]

I believe there is an app. Here you go, there's more than one http://www.ilounge.com/index.php/ar...l-30-tip-calculators-meal-splitters-reviewed/

But it's not that hard, just think of it as a tax that you have to work out yourself.

For standard service, add 15%, for exceptional service, add more ... this goes for restaurants, taxis etc.

For someone who carries your bags etc, $1 per bag is the guideline.

 

[harvyk]

That is correct...

To be honest I never found it to be too much of an issue, they will still quote a post tax price when you get to the checkout.
As for tipping you'll quickly learn who gets tips and who doesn't.

Basically anyone who does something for you is probably deserving of a tip. So this is people such as waiters at restaurants, porters, taxi drivers and barmen just to name a few. For trivial amounts (ie less than $10) I usually round up to the nearest dollar or if rounding up only gives an extra couple of cents (eg a $5.95 bill) I'll throw in an additional dollar. So if a taxi driver drives me a couple of blocks and it barely registers on the meter I'd prob only round up.

For other things I'll tip somewhere between 10% and 20%. I get the feeling that most Americans accept that foreigners may not completely understand their tipping culture. That said short of leaving no tip your unlikely to be chased down the street by an angry waiter, and I have yet to be refused service at establishments where I think I got the tipping amount wrong where I think I got the tipping amount wrong the previous night.

 

[moa999]

For LA/NY where State Tax is 8-9%, in a restaurant the general rule is double the tax.

Note that if you are going in parties of 4 or more... some restaurants will automatically add a 15-20% to the bill.
Don't get caught tipping twice!

 

[SeaWolf]

Also, it may not seem obvious but you don't need to tip at places like McDonalds, Starbucks, Subway etc. where it's all counter service.

 

[casanovawa]

I loathe tipping and varying taxes over there... Just pay your people what they are worth (and need to live on) and put the all inclusive price on the menu, shelf, product etc and let me choose between businesses as to how much i want to actually pay without guilt trips of being responsible for the staff getting any actual take home pay or working for nothing!

 

[AV8]

Just make sure that you have numerous $1 notes in your wallet and don't confuse them for $100 - US currency looks the same except for a couple of slightly coloured denominations.

 

[Blackadder]

For LA/NY where State Tax is 8-9%, in a restaurant the general rule is double the tax.

Note that if you are going in parties of 4 or more... some restaurants will automatically add a 15-20% to the bill.
Don't get caught tipping twice!

+1 for this method
Generally speaking for groups the gratuity will be added on to the bill.

Also if you use the Shuttle vans to/from the airport the grauity is added if pre booked.

 

[Pooch]

I also tend to leave $2 per day for the hotel cleaning staff - they're the bottom of the totem pole. Yes, they should be paid a living wage, but the reality is they're not ... and when they provide a good service (which they do!) I'm happy to leave the $2 ...

 

[Dougo]

Our US friends often pay a tip equal to the tax which saves working out 15% or 20% or whatever it is. Some people in the US who rely on tips to make a "living wage" expect up to 25% - whether they get it or not, I'm not sure.

 

[POF13]

e: USA: Tipping and Taxes

Agree with the doubling the state tax method for working out the tip. Most wait staff in restaurants actually pay tax on an assumed level of tipping. It can be a bit annonying sometimes paying a tip for what could be seen as poor service - I register my "protest" by paying less than 15%.
Also in NY, parties of 5 or more are expected to pay at least a 20% tip.
There are apps to help with tipping if needed.

 

[Pooch]

Re: e: USA: Tipping and Taxes

Agree with the doubling the state tax method for working out the tip. Most wait staff in restaurants actually pay tax on an assumed level of tipping. It can be a bit annonying sometimes paying a tip for what could be seen as poor service - I register my "protest" by paying less than 15%.
Also in NY, parties of 5 or more are expected to pay at least a 20% tip.
There are apps to help with tipping if needed.

Yep ... a 10% tip is the best way to make sure your protest registers!

 

[harvyk]

Just make sure that you have numerous $1 notes in your wallet and don't confuse them for $100 - US currency looks the same except for a couple of slightly coloured denominations.

I have come to accept that during a trip to the US I will at least once hand over a $50 for a $9 bill and receive only $1 in change. I do try really hard to keep track of which notes in my wallet is which, but when your in a hurry it can be very easy to pay an incorrect amount, and no the colours do not help much, as they are still all the same size, and predominately white and green.

 

[harvyk]

Re: e: USA: Tipping and Taxes

Agree with the doubling the state tax method for working out the tip. Most wait staff in restaurants actually pay tax on an assumed level of tipping. It can be a bit annonying sometimes paying a tip for what could be seen as poor service - I register my "protest" by paying less than 15%.
Also in NY, parties of 5 or more are expected to pay at least a 20% tip.
There are apps to help with tipping if needed.

Whilst I have yet to have bad service anywhere (there is something about having your pay directly linked to your performance which really makes people go the extra mile) I have always been under the impression that a tip for bad service was suppose to be a completely nominal amount (eg $1 for a $100 bill). That way they are aware you didn't just forget to leave a tip and that they know that you where not happy.

Of course if you do that don't expect to go back to that restaurant and receive food which has not been spat in.

 

[dsotm]

I tend to leave the tip in cash if paying with a credit card. I just don't think the staff always get the tip if you add it to the card. Waiters will appreciate it that is you who are paying personally for a personal service, not just tacking it on the company CC. As mentioned take lots of $1 notes. A collegue once refered to it as "throwaway"

 

[Stephen65]

Most wait staff in restaurants actually pay tax on an assumed level of tipping.

This claim is commonly made to justify an argument that even bad service should reach a tip but it's not actually true.

The way it works is that the IRS assumes that employees of certain businesses like restaurants where tipping is customary will receive a minimum of 8% tips on the gross income of the business. All tipped employees are supposed to report their tips to their employer and
if the reported tips do not reach at least 8% then the employer has to notify the IRS and allocate the difference to employees. So provided an employee reports at least 8% he or she can keep the difference if its a cash tip and not pay tax on it. Tax avoidance on tipping
is accordingly rampant in the US.

Even if the 8% level is not reached employees can still avoid paying tax on any excess of what they were tipped if they keep a daily record of their tips and can show the IRS they earned less than 8% - something they are supposed to do anyway.

In short, do not feel obliged to tip because of this myth about US taxation.

 

[Stephen65]

In the US I tip waiters 15% rounded up for good standard service, 20% for really good service and only over that for something exceptional. I've never had an issue. On the very rare occasions I have received bad service I leave a nominal amount to show I didn't forget (which may be assumed if you are a foreigner).

Some restaurants will add a service charge and list it on the menu particularly if its a large party or they see you are foreigners. I've seen more than one restaurant in tourist areas that have special service charge included menus for foreigners. If a service charge is levied it would be exceptional to tip over that.

 

[Pooch]

I have come to accept that during a trip to the US I will at least once hand over a $50 for a $9 bill and receive only $1 in change. I do try really hard to keep track of which notes in my wallet is which, but when your in a hurry it can be very easy to pay an incorrect amount, and no the colours do not help much, as they are still all the same size, and predominately white and green.

I always take a separate billfold for my $1 notes - that way, I'm sure of not handing over a $100 etc bill!