Calculating Tip: Include Tax or Not?

[scfr]

When you calculate your tip at a restaurant, do you tip based on the cost of your meal alone, or do you tip based on the cost of your meal plus tax?

I have always tipped based on the cost of the meal alone. I thought: Why on earth would I tip on sales tax? In fact, it really annoys me when restaurant receipts include those pre-calcluated tip percentages a the bottom (as "suggestions" for how much you should tip) and they include the sales tax. Now I wonder if I have made some sort of social faux pas.

In Friday"s WSJ (Aug. 1, pW6) there was a review of a book called "Waiter Rant." They ran down a list of offensive restaurant customers, including this:

"And there are the cheapskates who compute the tip before the tax is added."

Do wait staff really consider someone who tips pre-tax a cheapskate? Is this really the view of wait staff, or is it perhaps the opinion of the journalist creeping in?

I have been a waitress (when I was in college), but it was in a no-sales-tax state so this was never an issue. Which begs the question: Why should a waiter in a sales tax state automatically get tipped more for the same value of meal as a waiter in a no-sales-tax state?

I do not see tipping pre-tax as being a cheapskate. I see it as being logical. However, if the concensus of the board is that this makes me a cheapskate, I will consider tipping based on post-tax.

However, if I do feel I "must" tip post-tax, I will cut down even further on dining out (something I don't do very often now). I have reluctantly accepted that a 15% tip is now considered the "norm," and that has caused me to eat out less and less. When deciding whether or not dining out is "worth it," I do think about the cost of the tip. If I have to add 15% to the cost of the meal AND the cost of the sales tax, I don't know if I'll be able to stomach the idea of dining in a restaurant again except on very rare occasions.

[disneysteve]

I tip based on the pre-tax amount.

I think the whole tipping thing is a scam anyway, but realize it is a necessary evil.

[boosami]

I tip on the total bill including tax. Then again, I also tip 20-30% and will only go as low as 15% if the service is terrible. Pay for servers is pretty horrible and it's a tough job. It makes me feel good to imagine making up for at least one customer who stiffed them that day.

I also once tipped a valet $20 by accident (meant to be $5). He was floored and treated me like a VIP the entire rest of my stay in the hotel. Sure, I spent a little more than I meant, but it was worth it to me for the promise of exception service.

[DebbieL]

The tip is calculated on the amount before taxes. Why on Earth would anyone tip on taxes?

[ActYourWage]

Never really thought about this, but I tip on the total amount.

[PrincessPerky]

I tip on the total bill taxnd all, but I tip 10% for lousy service 15 for ok and as high as a can for great.

reason being the minimum claim amount was 7% of gross sales when I waitressed, never thought to do it any other way.

[ActYourWage]

I tip based on the pre-tax amount.

I think the whole tipping thing is a scam anyway, but realize it is a necessary evil.

How is tipping a scam? Why do you consider it evil?

[srblanco7]

I tip on total amount - usually about 20%...

And aren't we talking about approx. a 1% differential when comparing pre-tax tipping vs post-tax tipping (7% sales tax and 15% tip would result in a 1% addition to your bill).

Perhaps I dine at less expensive eateries - but 1% on a dinner bill wouldn't seem to amount to much...

[stressedmama]

I usually tip on the total bill too, but I tip 15% for average service, really good service 20%, and 10% for lousy service. I never gave much thought to this before.

[disneysteve]

How is tipping a scam? Why do you consider it evil?

Tipping is a scam because it is no longer what it was designed to be - a thanks to the server for good service. Most places pool their tips so the lousy waiters get just as much as the great waiters, and they share their tips with the busboy and kitchen staff.

Tipping is a scam because the tip is based on the cost of the food rather than related in any way to the level of service. If you and I go out to dinner, each paying our own way, and I order the $30 filet mignon while you order the $15 pasta, I am expected to tip twice as much as you even though delivering my meal didn't take any more work than delivering yours.

Tipping is a scam because it allows restaurant owners to pay their employees slave wages rather than a fair salary for the work being done. And despite that, many restaurants still add an 18% "mandatory gratuity" (which is an oxymoron) to the bill if there are 6 or more people dining together. I'd much rather pay more for the food and forget about tipping entirely and have the employees paid a fair wage.

[feh]

Tipping is a scam because it is no longer what it was designed to be - a thanks to the server for good service. Most places pool their tips so the lousy waiters get just as much as the great waiters, and they share their tips with the busboy and kitchen staff.

Tipping is a scam because the tip is based on the cost of the food rather than related in any way to the level of service. If you and I go out to dinner, each paying our own way, and I order the $30 filet mignon while you order the $15 pasta, I am expected to tip twice as much as you even though delivering my meal didn't take any more work than delivering yours.

Tipping is a scam because it allows restaurant owners to pay their employees slave wages rather than a fair salary for the work being done. And despite that, many restaurants still add an 18% "mandatory gratuity" (which is an oxymoron) to the bill if there are 6 or more people dining together. I'd much rather pay more for the food and forget about tipping entirely and have the employees paid a fair wage.

I tend to agree with you. I don't enjoy tipping, although I see it as part of eating out. My range is 10% for bad service, close to 20% for excellent. And I use the total bill (including tax) when calculating.

I grew up (and still live) in a small midwest town, where eating out really was the only time someone tipped. I must admit it rubs me the wrong way when I travel to large cities and anybody that performs any service for you has their hand out (taxis, bellman, concierge, chamber maid, etc, etc, etc).

[PrincessPerky]

I tip on total amount - usually about 20%...

And aren't we talking about approx. a 1% differential when comparing pre-tax tipping vs post-tax tipping (7% sales tax and 15% tip would result in a 1% addition to your bill).

Perhaps I dine at less expensive eateries - but 1% on a dinner bill wouldn't seem to amount to much...

Thanks I was trying to mull over that myself.....

at a restaurant where I would tip avg bill for all is less than $40 7% of 40 is $2.80 for a total of $42.80

10% is $4.30 vs pre tax $4
15% is $6.42 vs pretax $6
20% is $8.60 vs pretax $8

I just don't see why not doing it after tax....but then I budget 40 for a meal, even though the bill is usually 30 or less, I account for tips when budgeting.

even if your avg meal is 40..total $80, 7% is $5.60, after tax = $85.60

15% is 12.84 vs pretax 12...

maybe you folk prefer fancier restaurants...avg plate $100...bill for two is $200, 7% is $14..with tax bill = $214

15% is $32.10 vs pretax $30.. a whole 2 dollar difference.....

now suppose you have a really fancy place, 1K a plate...2K for two, 2140 with tax.....

15% tip is $321 pretax $300

Now that the tax makes a difference, but at that level, if you have to ask the cost you prolly can't afford it.

[PrincessPerky]

BTW the way tips are calculated is rediculous...

It is a system that benefits the restaurant..waiters want to sell you more stuff so the total bill goes up so their tip goes up. quite silly IMO.

But on the other hand I expect more from a waitress at say Nakato (20$ plate minimum) than chilis

And if I ever find a waitress who can keep my water filled I may just have to tip an extra 10, no matter where I am! I really don't know what is so hard, but I have learned to make my husband get one so I can steal his.

[disneysteve]

Here are a few quotes I pulled from internet etiquette sites...

A 15 to 20 percent tip is the usual amount that should be left for good restaurant service. Keep in mind that you should leave 15 to 20 percent of the total bill, before tax, and before any coupons or discounts are taken off.

Custom says that tips are calculated pre-tax, but many people just use the total bill either for the sake of simplicity or to be more generous. In other words, either way is fine.

Servers expect 15%-20% of the pre-tax amount of the bill.

Other sites said essentially the same thing. The standard is to tip based on the pre-tax amount but either way is okay. Obviously, they won't turn down a larger tip.

[disneysteve]

I expect more from a waitress at say Nakato (20$ plate minimum) than chilis

And if I ever find a waitress who can keep my water filled I may just have to tip an extra 10, no matter where I am.

Agreed on both points. A fancier, more costly restaurant should bring with it a higher level of service. I've had the good fortune to eat at some top-notch restaurants where dinner for 2 with drinks can approach $400 (or more depending on what you're drinking) and the service is phenomenal. Compare that to your standard chain restaurant where you're lucky if they even get your order right and bring out the food while it is still hot.

Just last week we ate at a casual restaurant in Atlantic City. The food was fine but the waitress didn't come back to check on us a single time during our meal. I had to flag her down to refill my water glass. Yes, I left her a smaller than usual tip because I didn't feel she deserved any more than that.