Rules for tipping

There are no rules that are set in stone when it comes to tipping.

However, our basic guide to tipping gratuity is, if you’re unsure if tipping is appropriate for the service performed, go with your gut instinct.

Even if your neighbor doesn’t tip the newspaper delivery person, if you think he does a great job, then go ahead and include a tip with your payment.


Tipping and taxes

Restaurants report a percentage (around 12%) of the gross sales for food and beverage to the IRS for their staff.

This means that if you have a $200 food bill and $200 wine bill, the restaurant will report 12% of $400 or $48 as income to the server. In other words, the server has to pay tax on it whether you tip it or not.

If the restaurants do not report it accurately, the restaurant and the wait staff get audited by the IRS.


Tipping with a gift certificate

When tipping, if you received a coupon or gift certificate, how do you calculate the tip?

Tipping is always based upon the normal price of the good or service. If you get a coupon for 20% off, then tip on the original price.