The Art of the Tip

You head out for a nice dinner, and the restaurant is busy, so you grab a seat at the bar for a drink while you wait for a table. When the tab comes, you pause — do you tip a percentage of the total or a buck or two per drink?  During dinner, the service is great, but the food is just okay — do you tip on the service, the food or the whole experience? You head to the valet and scratch through your wallet for cash. Is $2 enough? That’s all the cash you have. Trying to navigate what to tip and when can be dizzying at best and frustrating at worst.

While tipping is about recognizing good service, in many states it is also about basic compensation. A federal law allows states to determine a tip credit, letting employers pay less than the minimum wage of $7.25 per hour, with the assumption that the server, host, busperson or bartender will be able to make up the difference in tips. In Texas, restaurants can take a $5.12 tip credit, meaning they only have to pay $2.13 per hour as long as the employee earns enough in tips to reach the minimum wage; otherwise, the employer has to make up the difference.

For servers who make $2.13 per hour, to earn minimum wage — approximately $15,000 per year — they must serve tables whose checks total at least $34 every hour, with diners tipping 15 percent. But minimum wage doesn’t stretch very far in Austin’s expensive market, and the City of Austin considers $15 per hour, just over $31,000 per year, to be the living wage. For servers to earn $15 per hour, they need to have at least $85 per hour in checks (pre-tip) if diners tip 15 percent. A generous 20 percent tip drops the total check amount needed to $64.

TABLE 1

Total check amounts employees have to serve in an hour to earn minimum or a living wage:

  DIFFERENCE BETWEEN WAGE AND TIP CREDIT ($2.13/HOUR) REQUIRED TOTAL OF CHECKS PER HOUR WITH 15% TIP REQUIRED TOTAL OF CHECKS PER HOUR WITH 18% TIP REQUIRED TOTAL OF CHECKS PER HOUR WITH 20% TIP
MINIMUM WAGE $7.25/HOUR $5.12/hour $34.13 $28.44 $25.60
LIVING WAGE $15.00/HOUR $12.87/hour $85.80 $71.50 $64.35

Identifying the “correct” amount to tip can start a great debate. We asked our readers to participate in an anonymous survey, which sparked lively comments about tipping etiquette. More than 120 readers participated, and their answers clearly demonstrated that Edible Austin readers are a generous bunch who understand the importance of tipping. Several readers mentioned that they always tip, even when the service is bad, and many noted that they tip 25 percent or more for table service, well over the standard suggested by the Emily Post Institute, a business that maintains and evolves the standard of etiquette for the modern world. See Table 2.

A few readers suggested twists to the standard percentage tip model for table service. One reader said they adjusted their tipping percentage based on the meal, tipping 15 percent during breakfast and lunch but 20 percent at dinner, when the meal might last longer. Another reader is a consistent 20 percent tipper but suggested that the tip on wine should be a flat fee rather than based on the bottle price since the labor involved is the same regardless of the price of the bottle of wine.

tip 2

Counter service and tip jars provided the biggest quandary for readers. One reader noted they don’t tip on a first visit but do tip when they become a regular guest. “It’s always difficult to navigate leaving a tip before receiving any service, such as at a pick up situation or an order at a counter or food truck,” the reader says. “If I’ve been to a place before and know they’ll be doing the bussing or walking around checking on guests, I’m more likely to leave a tip.”

Other readers shared that when purchasing at a coffee shop, they make their tip dependent on the order. When ordering drip coffee, they might skip the tip, but they will add a tip for a latte or more complicated drink. For bar service, most readers tip $1 or $2 per simple drink but tip 15–20 percent for a complex drink like a craft cocktail.

Diners who are weary of the complexity of tipping can frequent a growing number of restaurants that no longer allow patrons to add gratuity; many restaurants now add a hospitality fee directly to the tab. A 2016 American Express survey of 500 U.S. restaurants found that 74 percent had shown interest in no-tipping policies. Of those surveyed, 18 percent had already adopted these policies, 29 percent were planning to do so and 27 percent said they might consider doing so in the future.

TABLE 2

   EMILY POST INSTITUTE  EDIBLE AUSTIN READERS
TABLE SERVICE 15–20%, pre-tax 20% or more
BUFFET 10%, pre-tax 10–15%
TAKE OUT No obligation; 10% for extra service (curb delivery) or a large, complicated order 5–15%
DELIVERY 10–15% of the bill, $2–$5 for pizza delivery depending on the size of the order and difficulty of delivery 10–15% of the bill for a delivery service, 15–20% for delivery by restaurant
BARTENDER  $1–$2 per drink or 15-20% of the tab  15–20% (or more)
COUNTER SERVICE OR TIPPING JARS No obligation; tip occasionally if your server or barista provides a little something extra or if you are a regular customer. 5–15%
VALET $2–$5. Tip when the car is returned to you. 10–15%

For restaurateurs, the move away from a tipping model gives them the ability to distribute wages fairly among their employees. While a new law now makes it possible to split tips between the front and back of house, employers still rely on employees to accurately report those tips for sharing.

Jam Sanitchat, owner of the South Austin restaurant Thai Fresh, moved to a gratuity-included model in 2016 because she wanted to make sure that everyone on her staff made a fair wage. She added the gratuity to the price of the dishes and adjusted the minimum pay for her team to $15 per hour, with a slightly lower wage of $14 per hour for high school students who couldn’t serve beer and wine.

“Customer feedback has been positive, and the only customers who complained weren’t tipping for counter service,” says Sanitchat. “It’s been almost three years, and I’ve had almost no turnover in staff. It’s much better than it was before.”

tip 3

Restaurateurs considering the switch have two choices: like Thai Fresh or Black Star Co-op (another local restaurant with a gratuity-included model) they can add the gratuity to the price of the dish — or, they can follow a model like L'Oca d'Oro, which adds an automatic service charge to the check. Increasing the dish price to include gratuity means that the customer has to pay a small increase in tax, but the alternative automatic service charge method can feel to customers like a forced tip.

The benefits to the restaurateur can outweigh the risk of upsetting customers, particularly in a labor market as tight as Austin’s. In a 2017 article from The Journal of Hospitality and Tourism Research, Michael Lynn and Shou Wang detail that having more consistent wages can help restaurant owners by attracting more professional waitstaff, allowing servers to focus on good service rather than tips, encouraging teamwork and reducing discrimination against perceived poor tippers.

Until there is more uniformity in tipping policies, navigating the different tipping scenarios will continue to be a winding, sometimes confusing path for diners. The best approach is to develop a tipping strategy you can follow through your culinary adventures that lets you feel confident you are supporting everyone in the dining equation.

By Kristi Willis • Photography by Kody Gautier and Sam Truong Dan