Yahoo Finance Should You Tip On The Total Bill At A Restaurant Or The Subtotal?
Put on your best Hamlet voice: To tip on the pre-tax subtotal? Or to tip on the total bill? With pathogenic phrases like "tip fatigue" and "no one wants to work anymore" infiltrating even supposedly polite conversation these days, it seems like many modern consumers want to penny-pinch when it comes to doing their part in making sure their server earns a livable wage. So, let's break it down.
When tipping, some diners might be of the inclination toward whatever's easier, math-wise. After a nice meal, calculating a mental equation is probably pretty low on your "stuff I want to do right now" list. Especially in establishments that use digital payment interfaces, the tip screen can make it all too easy to press a button and leave whatever figure it says constitutes a 20% tip, subtotal be damned. Also, inflation has driven menu prices through the roof, which makes the fact that tipping is a percentage-based system even more stressful for budget-conscious foodies.
For folks who have a little extra to spend (or pretty much anyone who's ever worked a service industry job before), the modus operandi might be to err on the side of over-tipping rather than skimping. Whichever way you lean, money isn't really a matter of opinion when exchanging goods and services. The consensus is that you should probably be tipping on the total, but there are arguments in favor of tipping on the subtotal as well. Let's break down both sides.
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Tipping On The Subtotal Is Customary
For sit-down restaurants, tipping on the subtotal is generally considered customary in the U.S. Why could this frame of mind make sense? While the nature of the service industry has evolved a lot over the years, one factor remains black-and-white: Taxes go to the state or local community, not to the employees directly. This matter is even further complicated by the sales tax rate, which is downright outrageous in many states. In California, Oklahoma, Alabama, Washington, Arkansas, Louisiana, and Tennessee, the 2023 tax rate is over 8.5%. Other states have no sales tax rate at all but do impose other fees. In New Hampshire, for instance, there's no sales tax, but an 8.5% "meal tax" is imposed on all prepared meals. Determining how to tip could be a matter of regionality.
Still, "custom" might not be the most important factor as you figure out how much money to leave your server at the end of a sit-down meal. If you're unsure, don't hesitate to ask the server or other staff about the restaurant's tipping policy or tip calculation method before settling the bill. Admittedly, you're probably more likely to care about the subtotal if you've just dined out with a large group and the price on your bill is looking pretty hefty. That percentage starts to matter more with a big sit-down meal than with the couple of bucks you slap down for a round at the bar ... or does it?
Nickel-And-Diming Hardworking People
Let's say you've just spent $200 on a nice meal out. Good for you! If you're dining in Agua Dolce County in Los Angeles in 2023, for example, your sales tax rate is 9.5%. That sucks! But, 9.5% of $200 is $19. If you tip 20% on the subtotal versus the total, that's a tip difference of $3.80. If you're willing to drop $200 on a meal, you can afford to toss your server an extra three bucks.
Don't try to do the math yourself. You're the guest in this situation, not the management. In theory, tips are the express property of employees, and if the employer skims any off the top, that's wage theft. But, in actuality, servers have a lot of hands in their tip jars. Employees must report tips on their federal tax returns. Plus, different establishments distribute tips differently and, at the end of a shift, many restaurants require servers to tip out the entire restaurant, including cooks, bussers, runners, and hosts.
This figure is often calculated as a percentage of the total sales post-tax, so if you're tipping on the subtotal, your server is the one who has to bite that extra three dollars (multiplied by however many other tables decide to tip on the subtotal, too). At the end of the day, if you punctuate a lovely sit-down meal by spending three minutes deciding whether to leave an extra three dollars ... maybe you should just leave the three dollars.
Read the original article on Tasting Table.
