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Tipping Etiquette Explained

(Don't Be Stingy)

You’ve just been handed the bill and you suddenly freeze — How much should you tip?

Being a good tipper is one of those things that no one ever really teaches you. Unless you’ve worked for tips yourself, you really can’t know what’s normal in a given industry unless you do some research. Here’s a quick overview.


Even though the federal minimum wage is $7.25, people who earn at least $30 a month in tips — like restaurant servers — are only required to be paid $2.13 per hour by federal law. They are expected to earn the majority of their wages through tips, which is why it’s customary in the U.S. to tip generously on a meal tab. But rules vary from state to state. About two-thirds of states have passed laws requiring tipped workers to be paid more than the $2.13 federal minimum.

But how much is enough? Industry standards say to tip wait staff 15% on average or 20% for exceptional service. It’s good tipping etiquette to tip bartenders up to 20% or leave $1-2 per drink. Same goes for coffee shop baristas — if they go above and beyond, you might tip more, but it’s standard to leave change in the tip jar.


Tipping around 20% is popular because it’s easy to estimate quickly. Most people suggest figuring tip based on the before tax total.

  • Let’s say your before tax total is $10.50
  • Start by moving the decimal one place to the left, which gives you $1.05. This is 10%.
  • Multiply this by two: $1.05 x 2 is $2.10.
  • $2.10 would be a 20% tip on a $10.50 bill.

You don’t have to be exact when figuring a tip. Somewhere in the ballpark of 15-20% is standard. Of course, you always have the option of withholding a tip or leaving less if you were dissatisfied with the service, but this is frowned upon given how much servers rely on tips for income.


Tipping etiquette usually falls in two categories — a percentage of the total cost or a small cash tip. The more complicated or intensive the service, generally, the more you tip. Most spa, beauty and barber treatments should be tipped based on the total cost. So, if your haircut was $65, you’re expected to add between 10% ($6.50) and 20% ($13) for a tip. If you’re unsure, do some internet research on the specific industry’s tipping guidelines. And if you’re traveling abroad, make sure you read up on international tipping.

If you’re traveling within the U.S. and staying in hotels, taking taxis, using coat checks and valet services, you should plan to bring some small bills. Standard cash tips are $1-5 each for everyone from the housekeeper to the concierge.


The etiquette for tipping your ride share driver depends on which service you use. While Lyft has offered the option to tip drivers since 2012, Uber only just added in-app tipping in July 2017. For short rides, $1-2 is pretty standard, although you might add more for difficult rides or challenging circumstances.


While it’s important to be aware of your own budget, there are instances where tipping is expected and appreciated. Overall, be considerate of the common practices in the industry and everyone will walk away happy.

As always, we’ve got your back. — The On Your Own Team End of article insignia

[Any reference to a specific company, commercial product, process or service does not constitute or imply an endorsement or recommendation by On Your Own, the National Endowment for Financial Education or any of its affiliate programs.]