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How much to tip? Well, it depends. 4 tips to make it less taxing

Except for filing income tax returns, there are few common financial exercises more confusing to Americans than tipping.

Is 15% a standard rate that applies across the board? Do residents of other countries view tipping differently? What about those coin jars placed near cash registers? How do minimum wages factor into the equation?

There aren’t a lot of universal answers, which isn’t surprising since tipping at its core is a voluntary gesture of thanks, though it is one molded by social expectations.

Tipping also is something that perplexes travelers visiting from other nations where tipping isn’t common. Australians don’t tip well, for example, partly because Australia’s minimum wage is higher, at about $13 per hour.

Here’s a guide to common tipping practices.

Tipping at 15% is a good starting point.

Check out any tipping guide, and you’ll notice that rates vary by the type of service provided, by the region of the country and other factors. The Emily Post Institute provides these general recommendations: 15% to 20% for sit-down restaurant service, 10% for servers at buffets (for help with drink orders and plate removal) and $1 to $2 per drink for bartenders, or 15% to 20% of the bar tab.

Other examples include: valets ($2 to $5 to retrieve a vehicle), 15% to 20% for taxi drivers, hair stylists, manicurists and those doing massages, and at least a couple of dollars for pizza delivery. For skycaps and hotel bellhops, figure on $2 for the first bag and $1 for each additional one. Doormen could receive a dollar or two to carry luggage or hail cabs.

For hotel staff, the Emily Post Institute suggests $2 to $5 per night, with money left each day (since housekeeping crews change throughout the week) and a thank-you note for the staff. Leave more if the room looks as if a hurricane went through it.

As for cash-register coin jars, there’s no obligation to add money to them, although it might be worth it if you receive super service or you’re a regular customer, the institute suggests.

Tips augment minimum wages.

Tips are legally considered wages, and restaurants in some states can apply some tips received by workers to meet the business’s obligation to pay minimum wages, according to the National Restaurant Association. Pretax profit margins for restaurants are fairly slim, in the 3% to 6% range. So when you tip, you help subsidize these employment costs.

One reason tipping expectations vary is that minimum wages are all over the board. There’s a federal minimum wage, $7.25 an hour, but many states and cities have their own, higher levels. Plus, many localities have a separate minimum for workers who receive regular tip income.

For example, both the regular and tipped-worker minimum wage is $8.25 in Nevada, but the tipped-worker minimum is just $2.13 in nearby Utah, Texas and many other Southern states.

Tips are a big part of compensation for waiters and waitresses, who average $12 to $17 an hour in tips compared with $4 to $5 an hour in wages, according to the National Restaurant Association. Those are median figures, so servers at busy or upper-end restaurants can do much better.

Full-bill vs. pretax tipping.

Do you tip on the full restaurant bill or the pretax amount?

On a large bill, the difference can add up, especially in places such as Arizona where sales-tax rates can exceed 9%. The general recommendation from the Emily Post Institute is that the 15% to 20% rate for servers (or 10% for buffet staff) should be applied on the pretax amount. Logically, there’s no strong rationale to tip on taxes, though many people do.

Tipping in foreign countries.

You might want to take a vacation to get away from all these American tipping details. Matters get a little simpler once you leave the USA, but it depends on where you’re going.

In a few nations, including Canada, Mexico and India, tips are expected. In many European nations, service is included in your restaurant bill. If so, there wouldn’t be an obligation to pay more, though some customers still leave small, single-digit tipping percentages. (Tipping also can make sense for activities like carrying luggage).

In still other nations such as Australia, Ireland, the United Kingdom, Brazil and Japan, tipping isn’t common. That’s also true of China, except for tipping tour guides, which is expected.

Reach Wiles at or 602-444-8616.