Are You Too Generous With Your Tips?

Are you too generous with your tips?

I’m a very thankful person.

So when I go out for dinner or get a haircut and receive good service, I tip.

In fact, I can’t remember a time when I was so offended by a service, I didn’t tip.

In today’s world, tipping has become standard practice in the service industry. And while there are many tools that can help eliminate the stress when trying to figure out the math, such as a tip calculator, the question remains:

How much should you tip?

Tipping in Canada

Tipping culture has certainly permeated North America, but you may be surprised to know that the "tip" (a.k.a gratuity) was born in medieval England. They called it “Vails’ to the Servents” and customers would leave a gratuity at ye ol’ tavern in order to receive better service.

Today, tips are a way to show appreciation for a job well done or to set the standard for the kind of service you’d like to receive.

Related: How to Set ‒ and Stick to ‒ Your FUN Budget

Some customers don’t like tipping, while others do.

For some countries, such as Canada, a tip is an anticipated gesture (and is perhaps the reason some customers don’t like tipping!). In other countries, such as Japan, a gratuity is a complete and total insult.

So what’s the standard for tipping in Canada? Where exactly is the sweet spot between "Hey big spender" and “Thanks a lot Ms. or Mr. Cheapskate!”?

To find out, I enlisted the help of some friends in the hospitality and service industry to educate me on the standards of tipping today.

My method was simple: reach out to honest staff and ask them about the money they make.

The end game? Become a better, more appreciative customer while making sure my wallet isn’t overtaxed with uneducated guesses on tipping.

These findings may rattle some cages, or shake some core beliefs on tipping, but in the end, this post should help you view tipping in a clearer light.

How Much Do You Tip a Hairdresser?

Whether you’re visiting your local barbershop or getting a blowout from a high-end stylist, one thing is for certain: the more upscale the salon, the more you’ll end up tipping.

While anything from 10% to 15% is expected, there are a few subtle differences that determine how much you’ll spend.

Tipping in a Barbershop

Barbershops are back in style these days, so the price of a good, clean cut is bound to be a bit more than your average hairdressing chain.

Where I live, barbershops seemed to have popped up out of nowhere, undercutting most hair salons while offering something more than your typical mall cut. And they’re even appealing to more women as well!

According to my sources, people will typically tip $3 on a $25 haircut (a little over 10%) and scale it upward or downward depending on the service. Seeing that the average men’s cut takes between 15 and 30 minutes, a barber does OK when it comes to gratuity.

What does the barber like to be tipped? 10%

What is the reality? 10% – but anything is appreciated

Related: A Surprising Way To Save $50 On Shaving

Tipping in a Hair Salon

Unlike the simple barbershop, a salon ups the ante when it comes to tips.

Because salons tend to cost more with their wide array of services, such as blowouts, colours, washes, etc., bigger tips are usually expected.

And let’s face it, many hairdressers (and barbers!) do more than just hair. They are also sounding boards ‒ a confidant ‒ listening to all the joys and failures in a client’s life.

It’s important to remember that many hairstylists rent a chair from where they work, so while the price of services are generally influenced by this cost, a tip goes entirely to the hairdresser.

What does the hairdresser like to be tipped? 10 to 15%

What is the reality? Around 15%

How Much Should You Tip in a Restaurant?

How much you tip will depend on the night of the week and the type of restaurant you’re eating at. For high-end restaurants, most people will tip 20% or more on their bill. And as Mondays and Tuesdays are typically slow in the restaurant industry, people generally tip less on these days, anywhere from 10% to 15%.

When it comes to tipping the support staff (cooks, dishwashers, etc.), these earnings are calculated either as a percentage of the wait staffs’ tips or through a tip pool.

In some cases, the wait staff is required to put in roughly 20% of their tips (or 1% of their net sales) into a shared pot that is divided by the support staff.

In a tip pool, all the tips from each server and bartender are pooled into one pot, and then distributed to servers and support staff based on a certain percentage.

Related: Free Coffee Rewards

Tipping Your Server

The biggest tippers are typically other servers as they can appreciate the personal details that go into a nightly service while balancing many customer needs at one time.

But how much you tip will all come down to the service you receive.

Servers don’t expect everything to go smoothly, but they will do their best. A small tip speaks volumes and a good server will take that to heart and step up their game in order to earn a bigger tip next time.

What do servers like to be tipped? Roughly 15%

What is the reality? 8% to 20%

Tipping the Bartender

Tips for a bartender seem to run parallel to that of a server. When it comes to corporate restaurant chains, tipping for bartenders is usually on par with servers and they’ll pretty much make the same on tips per shift.

What do bartenders like to be tipped? 10% to 15%

What is the reality? 5% to 20%

Related: How Much is Reasonable to Spend on Alcohol Every Month?

Tipping the Delivery Guy

The tipping realities for a delivery guy are a bit shocking for a number of reasons.

On average, most people will tip $1 to $3 for a hot, fresh pizza to arrive at their door. While 10% is the preferred tip (roughly $3), most people will only tip 3% (roughly $1).

What’s disturbing is that both pizza guys I spoke with, who work for reputable, international pizza chains, made less than minimum wage for their time. One made $5.25 per hour, while the other made 6 bucks an hour. That was minimum wage back in 1992 ‒ this is 2018!

How is this possible? Perhaps neither are on the official company payroll and, to avoid taxes for their low wages, they get paid out at the end of each shift.

But when you consider that a typical night brings in $60 to $80 for an eight-hour shift, factoring in gas and wear-and-tear on a personal vehicle, simply having this job isn’t even worth it. Not even for a 16 year old!

What do delivery guys like to be tipped? $2 to $5, depending on the order size

What is the reality? $0 to $3 (for a two-pizza order)

Tipping On Tax

Most of the service people I spoke with didn’t know whether or not they were being tipped on top of tax (HST, PST, GST). Or rather, whether they were being tipped on top of the total bill of the service or the bill minus taxes.

Many customers think tipping on tax is wasteful. No one would ever buy a home and pay a real estate agent their cut by adding land transfer or any other tax factored in to their commission.

So why do it for the service industry? (Sure, the stakes are much smaller, but it really adds up!)

Tipping from the bill without taxes ensures you’re not tipping on money that doesn’t go to the business or the person serving you.

And let’s face it, not everyone is a whiz at math, nor do they want to pull out their cell phone and calculate the percentage for a tip when it’s time to pay.

So one thing to keep in mind when tipping is that most bills have taxes broken down on it.

For example, a $25 base service will result in a 15% tax of $3.75, creating a grand bill total of $28.75. Adding another $3.75 for gratuity is a generous 15%.

So, good practice is to use that tax as a tip rate when tipping.

Related: Basic Tax-Saving Tips for Investors

Your turn

Is this a good way to tip?

Do you get anxious when figuring out what to tip when you go out?

Does this change the way you tip?

Let us know what you think.

Disclosure: Some links in this article may be affiliate links. We're letting you know because it's the right thing to do. Here’s a more detailed disclosure on how HTS makes money.

Comments

michael
michael's picture

Do you tip your local Mcdonald's at the drive thru? Do you tip the cashier at your local home depot. No?
Why not?

I'm exchanging money for a product. That's fair and that's where it ends.

June 12, 2018 @ 12:05 pm
LJ
LJ's picture

I agree - I hate tipping. It has become an expectation and doesn't drive good service. I prefer the Australian system where a tip is truly unexpected and for above and beyond service. I would prefer that the restaurants, hotels etc pay their staff a decent wage and increase the prices they charge if necessary to do so.

June 12, 2018 @ 12:21 pm
Jacques Dumerac
Jacques Dumerac's picture

I don"t like tipping either, but I wish staff to be paid right, so I support your suggestion,
In a recent trip to France I noticed that a 15% gratuity was integrated in the price, so you
don"t have to tip anymore, but waiters still hope for a tip.
We should not tip on the tax, nor on wine or beer, unless given good advice by the waiter.

Also in hotels which offer "complimentary breakfast" I feel like giving a small tip to the attendants who
pften work very hard and are gnerally ignored or not given anything.

On another topic, I don"t like establishments which try, or worse charge "a suggested contribution" to
a cause or a charity. In the latter case I would call the manager to complain. Better for them to leave
a box at the reception.

June 15, 2018 @ 9:42 pm
Holly
Holly's picture

That's all nice and good Michael, but it requires a system change to use your logic. McD and Home Depot wages have "no tipping" built into them, but hairdressers and servers definitely DO NOT. They make less. If you don't tip, you're a scrooge.

If you have an issue, take it up with your municipal councillor or provincial MP, to put forth a Bill to change it! Don't penalize the worker for a system they can't control.

June 12, 2018 @ 12:23 pm
Brian
Brian's picture

The gratuity is for service rendered, usually at restaurants and certain other services as mentioned earlier hair stylists. I've worked in the hospitality industry for decades and don't want to come across as someone with an agenda, but when you work in that industry, you have a different perception when it comes to tips, especially when its your only income with minimum wage.

June 12, 2018 @ 6:39 pm
Daniel
Daniel's picture

People who stand behind a cash register aren't providing service. People who ensure that your glass and cutlery are clean, that your food is hot, and that your dining experience is pleasant have earned more than the cost of your meal.

June 16, 2018 @ 8:57 am
James Connolly
James Connolly's picture

Tipping over the years have gone viral either with either restaurants adding "Service Charges", others such as signs in taxis and shuttle buses blatantly almost demand a tip as they are paid so low needing tips to survive on.. Cruise lines are constantly upping the "Gratuities" for there underpaid staff who again depend on tips (whether the monies actually get to the staff or cruise lines use the money on the money markets initially to pay for their new building program) automatically charged to ones onboard account, Norwegian for example following suite with other cruise lines such as Royal Caribbean Cruise Line, Celebrity ,has increased from less than 2 years ago from US$13.99 to US$14.50 per passenger, per day plus you buy a drink or with the included drink package charge 18-20% . As many people balked at these they have decided to re-invent it and instead of calling it "gratuity" now calls it a "service charges". THe US of course is at the forefront of the "tipping" from taxi drivers, shuttle bus drivers

June 12, 2018 @ 2:11 pm
gg
gg's picture

Thank you for this article. I don't like the process of tipping either, both because of the uncertainty of how much to tip, the expectedness of it, and the tension it can introduce into some service interactions. I would rather pay more and not have to tip. If you could expand this article to include tips on cap drivers, porters, etc, it would be very helpful.

June 12, 2018 @ 2:32 pm
Marpy
Marpy's picture

Tipping is a mixed bag. I rarely see what i would call exceptional service and so I tip around 10%. You have to watch your bill as some servers will automatically have added the tip when they key in what you owe before giving you the charge card machine. When I catch this, I consider it dishonest and ask that it be corrected and leave zero for a tip.
Different restaurants treat tips in different ways. I know that at one Keg, the servers are expected to put 3.75% of sales into the pot to be split among the other staff including management. If you can average 10%, you get to keep 6.25% of sales. Other places, its a percentage of actual tips collected.
With cruises, since they are already tacking on a charge per passenger, then unless the service is exceptional, why tip anything more?
Tips are an industry created problem used to deal with low wages and the high costs of doing business and to many people in these industries automatically expect them regardless of service or quality of product.
The unfortunate thing is that in places like Ontario, good quality jobs that pay a decent wage are hard to come buy and so more and more people are trying to earn a living in service industries that rely on tips to supplement wages.

JMO

June 12, 2018 @ 3:08 pm
GVD
GVD's picture

Holly, whether you agree or disagree with the comment, referring to Michael as a "scrooge" is unwarranted.

While the system to which you refer may have introduced wage discrepancies in industries which the service worker can't control that doesn't mean the customer should be penalized for it nor is it the customer's responsibility to correct it.

June 12, 2018 @ 3:12 pm
Holly
Holly's picture

I did not refer to Michael per se as a scrooge, only that type of behaviour, as a generality, would be scrooge-like.

Good and engaged citizens don't penalize each other (ie. not tipping will show them!), we go to the right mechanisms (laws, bylaws, rules, regs) to correct it, so none of us continues to get burned. That IS our responsibility and IS the responsible means for effective change, is it not?

June 14, 2018 @ 12:39 pm
Stephen Weyman
Stephen Weyman's picture

I agree with the sentiment that all employees be paid a fair wage that is at least minimum wage and hopefully more and that the price of everything be higher to compensate.

Service is a job like any other and part of that job is to provide good service regardless of tip. It would just make the whole process much smoother for everyone involved.

June 12, 2018 @ 3:34 pm
Judy
Judy's picture

I go to the salon every two months to get my hair coloured and it cost me $170 each time. I gave her a $10 tip and I feel cheap but I just can’t afford 20%

June 12, 2018 @ 5:53 pm
Teri
Teri's picture

@judy, if you have $170 to pay for colouring your hair but don't have a minimum of $17 for the hairdresser, you have your priorities wrong.
First off, that is an appalling charge for a colour (very high)
and secondly, paying such a shameful tip is an insult to the person who has spent hours on your hair.
Find a different salon or save up from your daily coffees, and pay at least 10%.
Shocking.
You are so far from 20% is it laughable - 20% would be $34.
10% would be $17.
you are cheap and one of the people who really should revisit your priorities.

June 15, 2018 @ 3:26 am
Stephen Weyman
Stephen Weyman's picture

I would argue it is more shameful how you just spoke to Judy than her not paying a full 20% tip on her visit to the hairdresser.

Don't you think the hairdresser is being paid for her job and time? I'm not sure what makes service work that much more special than any other job. There are so many jobs out there that involve direct interaction with the customer and they get no tips at all.

I tip 15% at restaurants (usually on top of tax) and other places where tips are common it's usually around 10% but more discretionary. I do it because it has become the custom here in Canada. However, if someone is making a fair wage for the work they do then IMO tips should be completely optional.

June 15, 2018 @ 10:22 am
Aaron
Aaron's picture

Anyone paying $170 to have their hair done can easily afford to pay a 10-20% tip if the service is good. If you can't afford the tip, you can't afford the hair styling.

June 17, 2018 @ 4:55 am
Patrick
Patrick's picture

I think paying less than minimum wages should be criminalized. It breeds dishonesty. For example, in the USA, low wages in the service industries are appalling, ($2.13/hr in Utah). I met a resident of that state who says its common for people to work as waiters for free- they are not on the books, they can qualify for govt handouts and they get don't declare their tips. The restuarant gets a free ride.

The other side of the coin is that people work in the service industry willingly, presumably because of the tips. They could look for better paying work elsewhere. So if someone doesn't tip well, the server knew the risk of that going into that line of work.

Tipping is a system that leaves no-one happy- the server thinks he didn't get enough, the customer feels she payed too much, and the tax man feels like he not getting his share.

I don't work in the service industry, but I always go the extra mile to make the customers feel special. I never get tips, but it ensures job security- happy customers tend to loyal, and become repeat customers.

On a side note, I always had to fix the job a barber did- i never met a barber who seemed to be able to cut my hair. I got so good at fixing their mistakes that I've been cutting my own hair now for years. Saves me time and money and I avoid the dilemma of how much to tip!

June 12, 2018 @ 6:38 pm
Ken
Ken's picture

I tip fairly almost always, but I have a problem re tipping for service that is no more than handing you a muffin, donut, lottery ticket etc. over the counter in a process that takes all of 1 minute at the most. I would much rather tip for a service such as a restaurant, taxi, hair salon/barber etc. where the service is extended over time and more input goes into the service. I ignore tip jars on counters otherwise and find them an overreach of the concept of tipping.

June 12, 2018 @ 9:14 pm
Ronni
Ronni's picture

Perhaps the servers, cab drivers, hair dressers etc. like getting tips. It's a bonus and can be way more than they would be getting if they had a fixed hourly wage. Much of it could even be held back from claiming it on their taxes. These people aren't in a rush to end the tipping custom.

June 12, 2018 @ 9:25 pm
Tom
Tom's picture

Minimum wage in Ontario is now $14 per hour, going up to $15 next year. Students under age 18 also get 13.15 and Liquour servers $12.20. Do we really still need to be leaving an extra 15%? Also the restaurant payment devices are being set up to calculate the tip on top of the tax which seems a little devious to me. Lastly, I've been picking up my pizza to avoid delivery charge and tip which can add up, yet they try to squeeze a tip out of you at check out. I have to scroll down to no tip on the payment machine...It's all getting a little out of control!

June 13, 2018 @ 8:48 am
S Arun's picture

Thank you for sharing

I tip at restaurants (15% of cost) because I know that a portion of waiters’ salary comes from customers’ tips. And, I tip hair dressers because I get a better service for next visit. Also, I tip hotel cleaners (not owners) to make them happy..

Other than that, I don’t remember I gave tips for other services because I rarely use them.

June 13, 2018 @ 4:57 pm
Barb
Barb's picture

You raised a good point in your comment regarding tipping hotel cleaners. That is one area that I never know what the appropriate amount is to tip. Can you (or others) share your thoughts on this?
Thanks

June 16, 2018 @ 3:39 pm
Louise
Louise's picture

I have learned to always pop the question now. My daughter worked in the food industry and at the end of the day, the owner kept all the tips to himself. Before I pay now I ask the waitress/waiter who gets the tips. You would be amazed to find that in many places, the owner keeps all the tips. I am always happy to tip the employees but refuse to tip an owner that is not the one serving me.

June 14, 2018 @ 8:47 am
Laura Mazerolle
Laura Mazerolle's picture

I am a senior, I go in with a $4 off, any haircut, so, are you telling us, older folks, to turn around and give the HD a tip? Why have a coupon then? Most of the time, they cut my hair way too short,after, I told them, not to, at the very beginning. I feel they do not listen, some are so friggin scissor happy! That, I do not feel like tipping!

June 14, 2018 @ 1:53 pm
Roxi
Roxi's picture

I have both worked in and out of the service industry. I recall watching or hearing a speaker on tipping say, that you should not tip an individual who has attended schooling for their position e.g. hairdressers. I have had some refuse a tip, I have also seen where if you tip at a till your server doesn't get the tip. Therefore, I try to give a tip in cash directly to my server for her or his service. I have recently returned from Europe. Tipping is a North American phenomenon. In France if you give a Euro $1.60 value they are grateful, however, you pay more for your food. Frankly, I found service to be better perhaps because with more pay come greater expectation on the part of the owner?!

June 14, 2018 @ 2:50 pm
Tony
Tony's picture

As someone already mentioned, this has been popularized by Americans and Canadians have adopted it. Minimum wage in several US states is below $3 an hour and therefore they actually depend on tips to make ends meet. In Canada we don't have a 2 tiered minimum wage so those making tips can make ends meet in the same way as those who work at Tim Horton's or McDonald's do. I've found that the food to be of better value in the US and the service to be far better than what we get in Canada. Given this and the minimum wage situation, I don't hesitate much when I tip in the US.

Why is tipping based on percentage of the bill? Going out for breakfast costs much less than going out for lunch or dinner. Is the waiter/waitress and kitchen staff at night working harder than one in the morning? Doesn't the cost of the food reflect the ingredients and labour that go into it?

That being said i usually tip $2-$3 in Canada. Call me a "scrooge" if you want, but at the end of the day the choice to be a bartender/waiter/waitress/hairdresser/whatever was theirs and many people make ends meet by working 2 jobs. We also live in Canada where access to education through programs and student loans is easy, especially when compared to the US or 3rd world countries.

June 14, 2018 @ 3:37 pm
DD
DD's picture

My philosophy is to always overtip the breakfast server since,as Tony points out, breakfast usually costs less than going out for lunch or dinner and the server is deserving too.

July 02, 2018 @ 12:48 pm
Bobbi
Bobbi's picture

Oh brother. As someone else mentioned, service industry employees now make $14 and will be making $15 next year, my cost of living has jumped significantly as a result (rise in prices of products and services, but crappier service everywhere because the business owners are cutting hours and staff) so the amount I tip out is going to have to suffer. Not sorry either. If you want to make more money, get into a different industry, just like I did when I was tired of crappy wages and having my ass grabbed every night. And for the record, when I go to the salon I’m already spending $400 a visit, you you actually think I’m leaving then a $40-$80 tip?? No chance.

June 14, 2018 @ 8:41 pm
Fred
Fred 's picture

Tipping is demeaning to the customer. For a supposedly optional activity it seems like it’s obligatory. Spending a lot of time in Spain I noticed that tipping was rare. Never for a coffee or in a bar. At a restaurant leaving nothing is the norm. Rounding up a bit for a server is ok but in percentage terms never more than 5 - 10%. And it’s never expected.

June 15, 2018 @ 8:44 pm
Solara2000
Solara2000's picture

Unfortunately those few corporate restaurants that tried to eliminate tipping by paying staff more appropriate wages have had to yield to the competitive pressures of lower prices by operators who pay minimum wages to duck attendant payroll taxes - CPP, EI, etc.
Not an easy quandary to resolve. In the meantime, if I can afford to use the services of servers, stylists, taxi drivers etc at the end of the day I know they are working hard for themselves and/or their families and an extra buck or two (or 5) will mean a lot more to them than it will to me.

June 15, 2018 @ 8:58 pm
Anoymous
Anoymous's picture

Here in Canada servers make a lesser wage than the cooks in the back (who get at least min. wage) Mangers make a higher wage also. So why should the server have to tip out anyone else? Also I tip the server This is the person I interact with...If food is not up to snuff it is the cook who messed up. The server will apologize for the mess up and the tip will be lessened.
Also why should I tip more if a server brings me an alcoholic beverage, the same effort to bring a glass of water. So this percentage tipping is messed up.
The bottom line is the tip is ment to optional and it must be earned.!

June 15, 2018 @ 9:32 pm
Zim
Zim's picture

Is there any standard for the tipping of taxi drivers?

June 15, 2018 @ 10:38 pm
Ruth
Ruth's picture

I don't think percentages are always appropriate.

For a simple haircut, I tip at least $5 and not more than $10, no matter what the price.

In the same way, I don't tip cleaning staff based on the price I pay for a hotel room. I tip between $3 and $5 a night, but only on stays of two nights or more.

For all service help (such as carrying my bags), my rule of thumb is to tip the cost of a beer in the sort of place the person would go to. That helps when travelling in Europe, Africa, etc - although I have to guess, of course.

The article suggests tipping more in an expensive restaurant. I do the opposite. If I have breakfast in a cheap diner and the waitperson is filling up my coffee cup repeatedly, I'll tip up to 50%. I'll also tip well if the restaurant is really slow. But if I'm in a fancy restaurant where we're spending $200 a head or more, I will rarely go over 15%.

June 16, 2018 @ 1:24 am
Najeeb
Najeeb's picture

While it's easy to calculate tips based on the amount of the bill it's also unfair: a server in a cheaper restaurant may just work as hard to satisfy the customer as a server in an expensive restaurant but will get a much lower tip. Perhaps the tip should be based on the number of dishes brought over, or the number of times a server checks in with your table (filling up water, etc.) or other effort-based measurement.

June 16, 2018 @ 6:18 am
Daniel
Daniel's picture

For whatever reason (probably because the transaction is closed after the driver has driven away) people don't tip Uber and Lyft drivers. Without tips, driving for Uber and Lyft produces sub-minimum wages.

June 16, 2018 @ 9:06 am
brian
brian's picture

I think tipping should be based on a percentage of the wages a person makes, assuming the service is good and how long the service takes. Why should a server in a high-class restaurant receive so much more than a server in a lower class restaurant, when the service usually is the same. And waitresses in cheaper restaurants, seem to run around and work a lot harder than those working in expensive restaurants.

June 17, 2018 @ 2:24 am
Jessica
Jessica's picture

I understand the purpose of tipping when it exists to supplement wages that the governments allow to be less than minimum. However, that's not really a big thing in Canada and I think the rest of tipping culture is just attitudes bleeding over from the US where that is prevalent. I don't like it, but of course people will think poorly of you if you don't cough it up. My solution is often to just forgo those services because I don't think they are worth it at the extended price.

The example that really gets me thinking is massage therapists. If I go for a massage at a physio/chiro office, it's viewed as a medical treatment and there is no expectation for a tip - it's not even given as an option on their payment machine. However, if I go for a massage at a spa or a place that just does massages, it's viewed as a personal service that I'm supposed to be tipping 15-20% on - and the fee for the massage is often already much higher to begin with! But these are the same professionals with the same RMT designation. How does anyone think this is reasonable?

June 18, 2018 @ 2:34 pm

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