Games Developers Conference and PyCon are both coming up, which means lots of familiar international travelers in the US. A post on G+ asked about how the tipping system works in the US. I’m not going to list the percentages and people (though I will say aim for 20% and always tip taxis and servers), but I will explain three very important things about ‘how the tipping system works.’
The first thing to understand is, tips are generally a part of wages. The federal minimum wage is $7.25, but may only be $3 or so for an employee that earns tips, because the rest of the money ‘must’ be made up in tips. Tipping is never “extra” money to a tip earner (takeaway, baristas, etc., are generally not ‘tip earners’).
Second is, servers do not generally declare how much they made- there is a standard percentage of sales they must be declare as tips (differs per state but generally something like 10-13%). So if they make $1000 of sales and make $250 in tips, they are allowed to say they only made $130 (%13) in tips and only pay taxes on that (I say allowed, this is ‘illegal’ but everyone does it and there is no expectation to report everything you earn). However, this has an inverse- if you make $1000 in sales and only make $100 in tips, you pay taxes on the $30 you didn’t even make! So if you tip someone 10%, they may be paying taxes on money they didn’t make- you are taking money out of their pocket.
Last and most important is, many servers need to ‘pay out’ to other staff, such as bussers and food runners. This can often be 5% of sales or so. So they may only be taking home 10% of your 15% tip. And the blowback from not tipping is far worse here- if you tip 5%, that server may be earning exactly zero dollars from your table. If you skip on the tip entirely, you are taking money out of your server’s pocket.
So, Europeans, and Americans too, please understand- tipping should never be considered optional, even for bad service. Unless you think it is OK to take money out of someone’s pocket for a job poorly done, or even just if they made some mistakes. Imagine if your pay was docked for each bug you wrote! The only time I would ever not tip is if you were to walk out of the restaurant (for lack of service or some other dealbreaker). Likewise, your server is almost never getting as much of your tip as you write (taxes, payouts to other staff). So if you get good service, tip generously, then add a dollar or two. And if you get bad service, tip anyway.
Enjoy the conferences!
PS- laws are different in each state and restaurants are different. These are just general guidelines. Please don’t nitpick exceptions.