How Much to Tip in the US, and Why the Bill Assumes It

In the United States, tipping is customary based on social norms rather than a legal requirement and each state has established laws that regulate wages for tipped employees on an individual basis and continually update them. When tipping, the two documents that guide your decision-making process are the receipt provided at the end of service and the written authority (restaurant) who provides the information regarding what is appropriate. For example, for a sit-down restaurant you generally should tip approximately 20% of the total bill (including tax) for a server who takes your order at your table but this percentage is rarely the same for food purchased at counters as there is no personal interaction. Under the Fair Labor Standards Act (FLSA), the US Department of Labor allows employers to pay tipped employees a direct wage of no less than $2.13 per hour, and in doing so count the tips they receive toward the mandated federal minimum wage as of September 20, 2026.

Thus, the confusion surrounding how much to tip in the United States lies in the fact that the bill presented to you has already included a certain amount for services provided by the restaurant before you determine how much to leave as a gratuity. This means that when you compare the amount recommended in etiquette books, the amount average Americans leave as a tip, and the amount shown on most restaurant credit/debit card machines, you will find discrepancies between all of them. Additionally, in some cases, restaurant bills include a line item charge for a certain percentage of your total bill (e.g., 15% of your total) which is already included in the menu prices, along with a blank line to write in the total amount of the tips you wish to provide your server. In America, the price displayed on the menu has never reflected the total amount owed for your meal. This can be attributed to the way payroll taxes and related laws are applied in the United States.

Why US Restaurants Expect 18–20% When the Menu Never Says So

Most of America sees what they pay for Food as a subtotal instead of an entire cost of the meal. This is legally authorized by the federal government under its wage laws, which state that servers can receive part of their wage via tips, so they don’t need to go into the restaurant’s books. So when you understand how the wage laws work, the expectations for the amount of tips cease to be random.

To illustrate how this works mathematically, the federal minimum wage is $7.25/hour, and under tip credits (the method used to pay tipped workers), an employer must pay $2.13/hour in cash, and they can count up to $5.12 of your tips as part of your total minimum wage. The Center for Economic and Policy Research published an analysis that showed that customers now provide 71% of tipped workers’ federal minimum wages through their tips, while the employer provides only 29% as cash.

For many years, the ratio between cash and tips that tipped employees received was not as lopsided as it is today. In 1966, Congress enacted the tip credit as a 50-50 split and when the federal government raised the federal minimum wage for the first three decades after that the cash tipped wage remained below half the minimum wage until the 1996 change to the federal minimum wage, which fixed the cash wage at $2.13. Since the 1996 change, the employer has continued to receive all of the tax credits for the minimum wage increases but there has been no cash wage increase since 1991.

The federal floor for tipped employees is not indicative of how much every tipped employee across America earns; some states do require a higher cash wage in addition to tip income, while several states require the full state minimum with tips being paid on top of that (this is addressed again at the time of payment).

According to Stephen Barth, a professor of hospitality law at the University of Houston, this system is actually “a subsidy for employers” and describes the tip as an added cost of dining in a restaurant. Under this system, the price of an American menu is not actually the final price for your food; it is merely a starting point from which to calculate your final bill. If you are coming from a country that includes service in their price packaging, it isn’t naivety on your part; it is simply a different pricing model, and tipping in France would be a different question altogether.

Is 18–20% a rule or a norm?

So, we don’t know why people tip what they tip. For instance, “How much do people tip in America?”: There are three different ways you could answer that question and none of those answers would agree. For example, according to the etiquette guidance documents, people have been encouraged to tip about 15% to 20% of their pre-tax total for many years. Also, when taking into consideration card and digital tipping data collected through the Toast platform (which represents roughly 180,000 restaurants), average tips for full-service restaurants in the second quarter of 2026 were 19.1%. In addition, when the Pew Research Center surveyed Americans on what they would tip after dining at a sit-down restaurant, 57% of respondents said they typically tip less than 15% of their pre-tax total.

Thus, “expected” represents a very strong social norm related to someone’s real compensation — this does not equate with any legal requirement nor does it indicate any accurate single figure. The area of variance between what is recommended and what is actually paid corresponds to where the individual’s own determination rests, and the range between these places is much less after one recognizes the level of service they are providing.

What to Tip at a Sit-Down Restaurant, From Adequate to Exceptional

American sit-down restaurant tipping typically ranges from 18-20% of the pre-tax amount for standard table service that is reasonably competent. The amount is usually considered to be about 15% if service is considered slow or inattentive, and decrease to 10% if the service was genuinely poor. An increase to 25% would be appropriate for someone that did some work above and beyond what was expected in serving you. These percentages represent references for tipping, not rules; both American diners and servers function within this range of percentages.

Two published policies establish the range of tipping percentages. The Emily Post Institute lists typical sit-down wait service at 15-20% pre-tax, and lists buffet style serving at 10% as the server is generally clearing plates and refilling drinks. Cortney Norris, a researcher of how people tip at Oklahoma State University, has an even higher base figure of at least 18% of the pre-tax bill in Bankrate’s tipping guide dated July 2024. In addition to the base percentage, the base amount is relevant; the tax is an amount collected by the restaurant on behalf of the state to be passed on, and is not a service performed by anyone.

The things that will move you through the range of tipping percentages are more concrete than the term “quality of service” suggests. Norris references things that can be seen. For example, whether or not the order was correct when received, if the server returned after the order was delivered, etc. The other part of what will determine your percentage depends on how much of the server’s shift you were able to fill.

This second characteristic is what tends to confuse most visitors, as illustrated by a post on r/TalesFromYourServer. An American, who had spent 10 years in Europe, asked what percentage would be used as a base when he received “frowning and scoffing” at a patron who left a 15% tip.

A server replied to a similar question in a thread in May of 2023. He said that 20% was a good standard to tip for good service with no issues; however if someone is requesting recommendations or any extra attention, they need to tip at least 20%. He indicated that in that context, the customer is not grading the performance of the server so much as assigning a dollar value to how much of the server’s evening was spent serving them.

Working out the number at the table

There is a two-step process to determine how much to tip, instead of calculating it based on a percentage. Take your subtotal (before tax) and move the decimal point to the left one place and that will give you your 10% figure. Then, multiply that figure by two to get your 20%. For example, if your subtotal is $68.40, you would take $68.40, move the decimal to the left one space ($6.84), and multiply that by two ($6.84 x 2 = $13.68); rounding that up to $14 is perfectly acceptable! To determine a 15% tip, you would take the $6.84 figure from step 1 and add half of it, which is $3.42 ($6.84 + $3.42 = $10.26).

The above is based on the assumption that you get to choose what number you want to use for your tip. Most of the time, you do get to choose your tip number. However, as the amount of the printed bill in America continues to grow, more and more of the customers’ bills will have an amount printed above the tip line. The words printed next to those numbers will determine whether a customer is simply adding to a tip or paying for the tip twice.

How to Read the Bill Before You Add Anything: Service Charge, Tax and Suggested Tips

The IRS explicitly states that an employer or employee’s description of a payment as a “tip” does not determine whether that payment qualifies as a tip. The IRS fact sheet on service charges and tips states that what determines if a payment qualifies as a tip is whether or not you, the customer, had the choice of how much to pay and were free to choose not to pay anything at all. The IRS uses four tests to determine whether or not a payment qualifies as a “tip”; therefore, the most important factors in making this determination are also the first two. First, the payment has to be made without coercion; second, the customer must have the unrestricted right to determine the amount of the payment.

If you cross-check this established criteria with the service charge or automatic gratuity line on the receipt, they both fail because they are compulsory. Therefore, the IRS treats mandatory customer charges as non-commensurate wages rather than tips, and the IRS notes an automatic gratuity for large parties, a banquet fee, a hotel room service charge, and a bottle service charge as examples in Topic 761. The suggested-tip grid at the bottom of the receipt does not violate either element of the IRS definition of tip because you can choose not to pay this amount; therefore, you have the option of ignoring it. Sales tax is another type of mandatory payment made to the government, which the restaurant collects and passes on without any discretion on the part of the person paying the sales tax.

The bill-reading worksheet

When filling out the tip line, always work backwards through the following steps in order.

The fourth row of the grid represents the area on which the visitor is spending money. The grid provides a suggestion of a percentage but does not indicate the calculation used to derive that suggested percentage. It is the restaurant’s decision to determine if it wants its suggested dollar amounts to be based on its subtotal or total amount of the bill, which can be programmed either way. A quick way to determine if the suggested amount was based on the subtotal or total is to divide the suggested dollar amount by the subtotal.

What the pre-tax rule is actually worth

The argument against this method is supported by the example of a visitor’s receipt reflecting a $100 subtotal with 8% sales tax charged. Based on that subtotal, there is an approximate $20 pre-tax tip of 20% or a $21.60 tip based on the total with sales tax ($108) added. The tip amounts are almost $1.60 apart.

Additionally, using the suggestion as a quick guideline by doubling the total sales tax when adding a tip is an inaccurate approach. For example, if the sales tax ranged from 7% to 9%, then doubling would reflect a 15-20% tip based on that total combined sales tax. The Tax Foundation has provided the national average sales tax population weighted to be 7.53% as of 07/01/26, with Louisiana having the highest rate at 10.13% combined and Delaware, Montana, New Hampshire and Oregon not charging any sales tax at all where doubling would give you nothing.

When the bill asks twice

In September 2024, a visitor to the United States from France, on the subreddit r/tipping, described how the bills show a “20%-25% automatic tip” and how the waiter would still give him the receipt with a question for another tip. Whether these tip amounts are required is dependent on whether the menu or the receipt shows it. However, you may have both a required amount and an optional blank space on the same receipt. The only place where both ask you for an answer is between the subtotal and total lines.

Before you write a tip, you should read through the bill thoroughly and find out if there is any charge on the bill that is required rather than optional. If there is a required charge, then the space below that is optional. If there are no required charges, then the blank space below that is your total tip. This changes if someone does not bring anything to your table.

Where the 20% Rule Stops: Bars, Counter Service, Takeout and Delivery

Just about all the above boils down to one question: did someone take your order at the table? If yes, you would follow the same rates from the previous section; if no, you have stepped away from table service, therefore, you would tip less (or not at all, in some cases).

The bar is the situation closest to the edge of the tipping spectrum, because although you are served by a bartender, you are not seated at a table. The standard practice for tipping bartenders is per drink rather than a percentage of the total tab. For example, you would expect to tip $1.00-$2.00 for beer or wine, and half of the amount of your cocktail (you should tip for cocktails because they require a lot of work). The Qantas website offers guidance for Australian visitors about tipping practices in Australia — carry small bills and leave them on the bar in front of the bartender instead of handing them to him/her.

Counter service, where the guidance genuinely splits

In the above scenario, foreign visitors tend to overtip and the truth of the matter is that the authorities have differing opinions about what constitutes appropriate tipping practices.

Bankrate’s guide indicates that tipping is not required at fast food restaurants, counter-service restaurants and when taking out food, because food preparers and service staff typically receive full pay. Elaine Swann (founder of the Swann School of Protocol) spoke on this topic for the CNBC website on August 2023: “You are not obligated to tip unless your order was taken at your table; in order to tip when you pick up a food order or have something delivered to your counter, you have to place an order and have it delivered to your door.”

The argument in this article is valuable since it provides insight into why the tablet continues to come up for discussion. The article cited Bella Biagio, who has been working as a barista for 34 years in Seattle, and believes the need for the guideline is still valid, in that many baristas and counter people rely on tips and heartily support pooled tipping as a financial security net. The following are her exact words; “If you are going to act as if no one else has the right to share in your tips, that’s going to have an impact on a lot of people. Not just the people standing in front of you.”

Measured behaviour sits between the two positions rather than on either. Among Americans who use each service, Pew found that 25% always or often tip at coffee shops and 12% do at fast casual restaurants — against 92% at sit-down restaurants.

This means that someone can confidently provide a cup of coffee at home without any form of tipping, or a small amount, about 10% for larger or more complex orders. This is in contrast to many visitor-focused guides, where tipping is generally listed at 10% minimum; the Qantas guide sets 10% at the minimum for delis/cafés/quick-service places. The difference here is a matter of how you are complimenting someone’s wage, rather than a rule that you are breaking.

Delivery runs the other way

The increase in food deliveries is once again becoming closer to what you experience with table service. There is one cause for this return- the delivery fees that most of us see when placing an order typically do not support the driver/contractor. The Bankrate Guide notes that, “Delivery charges can be high…and this goes towards paying for things other than the delivery person.” The Qantas Guide suggests that you provide at least $5 or 20% of the price as a cash amount, if you are able to.

None of this has anything to do with the building or space you are in at this time. The test is that the person assigned to help you received their payment based on an understanding that you would cover a portion of the service they provided. The same scenario is true even after leaving a restaurant.

What to Tip Beyond the Table: Hotels, Taxis, Rideshares and Tour Guides

The question regarding the type of individual who is responsible for your care while at the restaurant continues to be asked: Was it “someone assigned to take care of you?” However, how does that exactly affect the form of how you answer this question? Rather than a bill, American Tipping is primarily done by dollar amounts per service rendered (Per each bag, per night, per booking), rather than a percentage of the total. The exceptions to this rule have been transportation and tours – where there is either a percentage or daily rate.

It is important to understand the distinction, as it will allow you to calculate a ‘percentage’ of things that were never priced in this manner and therefore the entire trip may be budgeted prior to leaving.

The ranges below are derived from the Emily Post Institute’s travel tables and bands for hotels and transport as indicated in Bankrate’s Guide, while the tour figure is based on recommendations from one operator. These are customary ranges as published on September 20, 2026, and should not be confused with prices, particularly since many of the high-end ranges relate to luxury-based services.

The best row to focus on is that of Housekeeping, rather than memorising how much to write in the envelope for the housekeeper. By leaving a daily amount for housekeeping, you are acknowledging the fact that different people perform the service of housekeeping on different days, so if you only left one envelope at the time of checkout, then the person who worked the last shift may be receiving your gratitude without you knowing who is going to be cleaning your room. According to Bankrate, you should also clearly label the envelopes and place them in a visible location (on a desk or countertop; they should not be placed on the nightstand) as staff members are typically trained to not pick up any items that are not marked as ‘personal property’ and are placed beside the bed.

Where the published guidance doesn’t agree

Rideshare tipping falls outside other categories as one true split in terms of expectations, i.e., what people expect or think about rideshare drivers. According to Bankrate’s Elaine Swann, tips can be 3% to 5% (or sometimes more) depending on how your vehicle looks and whether your driver performs any “extra” services. The University of California, Los Angeles (UCLA), Dashew Center has published a guide for visitors from abroad, which indicates the following: for a very short ride (under $10), a $2 tip is expected; for an average longer ride, approximately 15% to 20% (closer to 20% if a driver carries a passenger’s luggage). While both figures are defensible—either may be correct, but no consensus has yet developed as to the tipping practices for rideshare drivers the way there has been for restaurant servers. If you take the $20 airport run as your example, that results in a $3 difference in tip amounts. Therefore, choose which amount feels right to you and then move to the next issue.

Guided tour tipping does not have a U.S. tipping standard authority that publishes what an appropriate number should be—therefore, the $10-$12 per day guideline provided by Go Ahead Tours (an operator) for tour directors and $4 per day per person for bus drivers is an operator’s recommendation for cash-based tipping, rather than being published by a standard body as the proper amount for each. Like the previous caution, this tip amount guideline is merely that—a guideline—rather than a requirement. From this, we can see a general principle that you do not have to give a tour guide or bus driver an additional cash tip (should the price of porterage already be included in your tour fee) and you may use the “bill amount test” to determine whether you should tip someone additional (when a receipt is provided) for services rendered.

All in all, if we put this list of tips together, you will be surprised at how many times during the short period of one week you will have to use cash on small cash-based purchases — very few of these events will occur with a credit card machine. The last challenge will not be how much to tip, rather how to give these cash tips.

How to Pay the Tip Without Overpaying: Screens, Cash and Large Parties

The percentages displayed on a card reader are made to look as though they are confirmed by an authority somewhere. This is not a representation of an official or set standard. The configuration options are what the company has chosen to present to the public. After understanding the available options, the terminology that describes those choices will make sense as instructions for that display.

The merchant has access to Square’s own setup instructions for merchants. On the smart-tip settings, there is the option for NO Tip, and then either $1, $2 or $3, for under $10; after $10 and above, you have the option for NO Tip, 15% Tipping, 20% Tipping, and 25% Tipping. If a merchant has chosen to not use those settings as shown on the display and instead selected a different three until one is satisfied, the merchant can do that at any time. There are also separate toggle switches to determine if the selected percentages are before or after tax (however, this may vary based on locality), and there is a switch that allows for rounding up your total (to the nearest whole dollar if under $20, or to the nearest $5 if over $20).

The position of the prompt within the queue in the store is also a setting, and it is this position that contributes to the pressure felt when being prompted for a tip prior to checking out. Because Square has their default setting to prompt for the tip before the payment, the tip prompt appears on the display between the shopping cart and card tap. You can make your tip decision while still at the counter with your card in hand and the person serving you just an arm’s length away; therefore, the pressure to decide is not a consequence of technology, but the result of the default factory setting.

First, create a predetermined tip amount when the tip screen appears. You can do this using the estimated bands for your location from the previous articles and entering it in the custom field. You will not have an option to use the “Tip” button with this method, but it is a legal option when performing a counter sale.

Cash or card: does it reach the same person?

While the U.S. Department of Labor published a fact sheet about the tipped employee situation, it also states that an employer can deduct the credit card processing fee from a tip that is charged to a credit card. The way this works is that if you charge a $14 tip on your credit card and the credit card processor takes a 3% fee, the employee receives 97% of the total of the tip that you wrote, or approximately 42 cents of every dollar. This small amount may not seem significant when considering one meal; however, when you consider multiple meals during your trip, it becomes significant, and it is the reason why many American diners leave a tip in cash when they charge their meal on their credit card.

The reason for leaving a cash tip is more than just the amount charged to a credit card, however. In the previous section, there is little to no contact with a terminal, such as housekeeping, bellhops, doormen, and tour directors. In addition, having $1 and $5 bills on hand during your trip are more useful than the decision of how much to tip. In addition, in the United States, you will receive $20 bills as change if you use an ATM and none of the service staff in the above categories can change that denomination.

Large parties, and the states with a different wage rule

Gather together as a group, and your total may have already been covered. According to the UCLA Dashew Centre, they advise international visitors that restaurants usually include an automatic service charge of 15-18% for groups of 6 or more. This service charge is mandatory, meaning that it falls under the service charge category in the previous examples; therefore, you are not tipping, just paying. You should check the printed receipt before completing it.

Geography is another variable that contradicts an enticing assumption. The Labor Department’s state table updated on July 1, 2026, explains that 7 states (Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington) and Guam require the employer to pay the full state minimum wage before any gratuities may be construed as part of the employee’s compensation with no tipping credit applied.

Tipping does not end there. Card tips for the state of California average 17.1% across all restaurant types according to previously referenced platform data and are the lowest in the country and approximately four per cent lower than the highest. The change in wage rules creates a new custom, however, this is still a customary practice.

Therefore, the “Pay Moment” is three habits. Be aware of your number ahead of time, keep cash handy (no more than a couple of small bills) for each individual that will never provide you with a screen, and read the receipt to see if the amount has already been included in your total.

The Final Call

For a dining experience at an American dining establishment that provides food and beverage service, it is important to note that servers’ tips typically range between 18-20% of the pre-tax subtotal. When approaching from an off premise perspective, the model changes to a flat fee per bag, per night, or per booking. Therefore, prior to entering anything into your system or creating an entry for yourself, first understand what the charges on your subtotal and total mean and if there is already a mandatory service fee on your bill. After you do that, you will be able to compute all the remaining aspects of your trip utilizing arithmetic you have created for yourself — in the custom field you will enter your own percentage of tip based on what you determine is appropriate, instead of the standard percentages provided to you on the screen when you start to enter your charges. Be aware that if you are at a table of six who have been automatically charged a service charge, adding an additional gratuity can result in almost 40% of your bill being in the form of a tip, which is not what you expected when you prepared your bill before dining at the establishment.

Frequently asked questions

Do I tip when I buy something in a shop, like water at a convenience store?

Tipping in the U.S. is considered a service charge (for the value of a service to you), and services are not the same as creating a sale, so if an employee has performed a service for you in the past (and an employee expects to receive gratuities), then it is normal to not leave a gratuity. However, if you walked up to an employee who provided you with a service and that employee was using a credit card reader that had a “tip” option, and you decided to not leave a tip on your card reader, you are not neglecting to tip that employee.

Is it rude for a visitor to skip the tip?

As for sit-down restaurants, yes — 92 per cent of Americans say they always or often leave a gratuity in a sit-down restaurant, and being a tourist does not make it any less expected to leave a gratuity. However, when dining at a counter (e.g. McDonald’s), only 12% of diners leave a gratuity, therefore it is not unusual for diners to decline to leave a gratuity at a counter (e.g. McDonald’s).

Do I tip at a hair salon or spa in the United States?

As for hair salons, manicures, facials, waxing, and massage appointments — they are close to restaurant rates for gratuity. The Emily Post Institute recommends a gratuity of 15–20% for a hair salon, a manicurist, and for a facial, waxing, or massage appointment, and advises that the salon ask for the employee’s gratuity to be shared among all employees who worked on the client.

Does my server actually keep the tip?

The Labor Department fact sheet mentioned previously states that an employer is prohibited from keeping any portion of an employee’s tip, however a valid pooling arrangement that shares tips among tipped employees is permitted. A percentage of tips paid via a credit card may be deducted from the tip amount.