For many European visitors the tipping culture in The United States can be confusing, so we decided to explain how it all works, and how much you should tip.

How the tipping system works in America

The tipping system is very different to most European countries, where waiting staff are paid a “living” wage, and tips are earned on the basis of good service. Get good service and you might tip 10%, great service may warrant 15%, and bad service usually results in no tip at all.

In the US, it works very differently. “Servers,” as they are called, earn a very low wage – sometimes just enough to cover their tax and employee costs. They rely on tips for their income. It should be noted this only applies to “sit down” restaurants and bars, not fast food takeaways.

Servers have to “Tip out”

The first thing to note is that servers have to do something called “tip out.” A percentage of every bill, based on the total, is taken off them to pay the cooking staff and if applicable, the table clearers. Note that this is based on the bill, not how much tip is left. So, if you don’t tip your server at all, he or she still has the “tip outs” deducted for the other staff. No tip means the server is actually losing money on serving your meal.

How much should you tip?

For normal service 15% is a standard tip and for great service, you should tip 20% of the total bill. If everything has been really outstanding, you might go to 25%. But always check the bill when it arrives, as in some cases, a “service charge” will already have been added, and obviously, if it has, then you won’t need to add more – that’s not very common, though.

You’ll often find that the bill includes a line which gives you help on calculating those percentages – offering perhaps 15%, 18% and 20% options. It’s fine, and easy to add the tip to the total bill when paying by card, and you’ll usually be handed the card machine, and be asked on-screen how much tip to add.

What if the service is poor or bad?

If the service has been below average, then many Americans will tip 10%, or even 5%. It’s still acknowledging that they have been served, and that they are paying for that service, but that it hasn’t been to their required standard. A 5% tip might just about cover the Tip out to other staff, but the server won’t end up with anything.

For many Europeans, that seems odd, to tip for something that wasn’t as good as they’d hoped.

If the service has been so bad that you really don’t want to leave a tip, then I’d recommend asking to speak to the manager, to make them aware that they have a training need with their server.

Why should we pay the waiting staff?

It’s a question we’re often asked by travellers, often with a “Why don’t the restaurants pay them a decent wage?”

The answer is that it’s just the culture, and how the industry in the US has evolved over time. Instead of increasing the wage bill and charging more for the food, restaurants pay minimum wage and allow their diners to pay their staff to serve them, by tipping. In a similar way, many sales people in the States are paid commission only – their pay is results based.

The upside for consumers like you and I is that we tend to get exceptional service in America. We’ve travelled extensively through the states, and eaten at hundreds of restaurants, and the service is massively better than in most European restaurants, with attentive, helpful staff who are always on the alert when you need something.

Other places to consider tipping

You don’t need to tip in petrol stations, they are nearly all self service. For taxis, generally 10%. In hotels you would generally tip $2 per case taken to your room by the door staff and $1 to $3 per day depending on occupancy for housekeeping.

Read our other travel tips.