Careers Business Ownership Restaurant Tipping and Dining Gratuity Guide Share PINTEREST Email Print Bambu Productions/Getty Images Business Ownership Industries Restauranting Retail Small Business Real Estate Nonprofit Organizations Landlords Import/Export Business Freelancing & Consulting Franchises Food & Beverage Event Planning eBay E-commerce Construction Operations & Success Becoming an Owner By Lorri Mealey Lorri Mealey Twitter Lorri Mealey has nearly a decade of restaurant experience, including owning and operating her own restaurant in Western Maine. Learn about our Editorial Process Updated on 07/26/19 Tipping comes in almost as many forms as restaurant concepts. It is sometimes referred to as gratuity or a service fee. Restaurant tips can be collected individually by servers or pooled together. Tipping also changes from place to place. Tipping is forbidden in some places, like Russia and Japan, while in the South of France, it is the sole source of waitstaff’s income. In Europe, many restaurants add a service charge automatically to the bill. In the US, tipping is often left to the discretion of the dining patron. Fifteen percent is considered the minimum of a decent tip, 20% considered excellent. Lately, there has been a movement to eliminate tipping altogether - something that is met by with mixed reactions in the restaurant industry. To Pool or Not Pool Tips Pooling tips refers to all the wait staff putting their tips together at the end of a shift and then dividing it evenly between them. The idea is that everyone will help each other out and work hard, to up the tipping pool. However, usually, someone is unhappy with pooled tips because they feel (perhaps rightly, perhaps not) that they did more work than the others and deserve more of the tip money. Many servers prefer to gamble that they will make more without pooling their tips. Tipping Out Servers aren’t the only employees who should be tipped. Some organizations use a process called tipping out. With this process, at the end of their shifts, servers submit all or a portion of their total tips to a pool which is separated between other important restaurant staff such as barkeeps, hosts, and busboys. This method is especially expedient at restaurants that handle mainly credit card transactions. It avoids the need to pull funds from the till to cover server tips from individual receipts. At times the server may tip out independent of the restaurant. They should divide 30% of their earning (give or take) to the bartender—who in turn tips out the barback— the host or hostess, and the busboys. If you really want to win brownie points as a server, consider throwing five or ten dollars to the dishwashers as well, if it is a very busy night. They are often overlooked and have one of the less pleasant jobs in the restaurant. Service Charges Catered functions and some fine dining establishments add gratuity, often referred to as a service charge, to the bill. It usually ranges between 15-20% of the total bill (before taxes). They then either divide the service charge up among staff as they see fit, or pay everyone a flat rate. Tips as Wages Depending on which state your restaurant is located in, wait staff must be paid a certain wage. Some places require the flat rate of the minimum wage, while others, like Maine, have a special reduced wage for tipped employees. It isn’t uncommon for servers’ paychecks to be zero after tips are factored in. Employees must claim their tips (at least part of them) for tax purposes, as well. Bad Tippers A bad tip doesn’t always mean the service was bad. It can be a reflection of the food, the ambiance or cleanliness of a restaurant. Therefore it is important for the entire restaurant staff to work together, to ensure that every patron leaves satisfied. Big tips mean happy customers. No More Tipping Some restaurants are doing away with tipping altogether. Danny Meyer, of Union Square Hospitality Group out of New York City, has shaken up the restaurant industry by paying a flat wage to servers in lieu of tipping. As minimum wages are raised across the country, many predict that this is the end of tipping in the United States.