Do you tip on the pre-tax or post-tax amount?

Standard etiquette in the United States is to calculate the tip based on the pre-tax subtotal of the bill.

What is the standard tip rate in 2025?

For sit-down restaurants, 20% has become the standard for good service. 15% is often considered the minimum for adequate service, while 25% or more rewards exceptional service.

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The Definitive Guide to Tipping in the United States

Tipping is more than just a transaction; it is a social contract deeply embedded in American culture. While in many countries a gratuity is a bonus for exceptional service, in the U.S., it is the primary source of income for millions of service workers. Navigating the unspoken rules of when, where, and how much to tip can be confusing. This guide breaks down the economics and etiquette of modern tipping.

The Economics: Why Do We Tip?

The reliance on tipping stems from the "tipped minimum wage." Under the Fair Labor Standards Act (FLSA), employers can pay tipped employees as little as $2.13 per hour in direct wages, provided that this amount plus tips equals at least the federal minimum wage ($7.25). This is known as a "tip credit." Consequently, the 20% you leave on the table isn't just a reward; it essentially pays the server's salary. Without it, many service workers would earn poverty wages.

Standard Tipping Rates by Service Category

While 20% is the gold standard for dining, other industries have different norms:

Sit-down Restaurants: 18-22%. Use the pre-tax total. Leaving less than 15% signals significant dissatisfaction.
Bartenders: $1-$2 per drink, or 20% of the tab for elaborate cocktails.
Food Delivery: 15-20%, with a $5 minimum. Drivers use their own gas and vehicles. Bad weather warrants a higher tip.
Coffee Shops: $1 per drink or rounding up the change is standard, though digital kiosks often suggest 15-20%. This is generally optional but appreciated.
Hair Salons/Spas: 20% of the service cost. If an assistant washes your hair, it is polite to tip them $5-$10 separately.
Valets: $2-$5 upon retrieving your car.
Hotel Housekeeping: $2-$5 per night, left daily (as staff rotates).

The Psychology of Tipping

Studies show that tipping behavior is influenced less by service quality and more by social norms and group dynamics. We tip to conform, to impress others, or to avoid the guilt of underpaying a worker. Interestingly, research from Cornell University found that servers who introduce themselves by name, squat next to the table, or draw a smiley face on the check consistently earn higher tips.

Tipping Etiquette: FAQ

No. The standard etiquette is to calculate the tip based on the pre-tax subtotal. Tipping on the tax means you are tipping the government, not the server. However, tipping on the total (tax included) is a generous gesture that simplifies the math.

Quite the opposite! Cash is king. Tipping in cash ensures the server receives the money immediately (rather than waiting for a paycheck) and avoids credit card processing fees that might be deducted from their tips.

For large groups (usually 6 or more), restaurants often add an automatic service charge (typically 18%). Always check your bill carefully. If an auto-grat is included, you do not need to add an additional tip unless you want to reward exceptional service.

Dining out is a major part of our social lives. For stories on where celebrities are dining and what's new in the entertainment world, you can always check out **Gossips and News at Chilled Bee**.