To tip or not to tip? Perfecting the art of tipping down under

The end of a meal in the United States is traditionally marked with the “tip discussion” – not whether to tip, but how much. Leaving between 15 and 25 per cent on top of the bill will generally leave employees satisfied, waving happily as you exit, well-fed and content you’re doing your part.

The end of a meal in Australia is traditionally marked with confusion. Should I tip? Lettuce already costs an arm and a leg and hospitality staff are paid a decent wage in this country. Is it necessary? And if so, what’s the least I can give without embarrassing myself?

How should we go about tipping in Australia? Credit:iStock

Why do we tip?

Comparing minimum wage down under ($21.38 per hour) to the US ($7.25 per hour) is enough to understand why American workers rely heavily upon tips, and why it’s customary for patrons to support them regardless of the service.

Australia’s national minimum wage is far more generous, making tips a bonus rather than a means of survival. And with the significant increase in cost of living this year, a tip on top of the ballooning bill could send some spending accounts over the edge.

Should we bother tipping?

Etiquette expert Anna Musson says tipping in Australia is not essential, but certainly appreciated. If the budget allows, she recommends tipping up to 10 per cent of the bill, especially when in a group setting where more items are ordered and extra service is required.

“It’s important to remember its origins stem from showing our appreciation for good service, typically to boost the wages in that industry,” Musson says. “Examples of this may include food and beverage service, taxis, bell boy or girl, tour guides.”

These industries generally offer their workers lower pay, whereas others such as construction and legal services offer higher pay and are therefore generally less expectant of tips.

What do economists suggest? Scholar in labour economics at The University of Melbourne, Nicolas Herault, says economic models surprisingly have very little to teach about tipping.

“Economics can’t tell us the ideal or optimal tipping amount, nor which sectors we should tip the most,” Herault says. “However, if we think of tipping as a way to boost salaries for low-paying jobs, it makes sense to prioritise sectors with low wages such as hospitality and retail services.”

Where should we tip – and how much?

According to data from payments platform Zeller, Australians do tip, with Tasmanians the most generous of all states and territories. The average tip is $16.06, any fluctuations are likely based on certain states’ hospitality culture and customer services. This may come as a surprise to some if the last time you tipped was… never.

Musson recommends breaking it down by service and experience. Where 10 per cent works for a dinner bill, a standard $5 is sufficient for a bell person. If your taxi driver opens the car door for you, perhaps gift them a fiver, or even as much as $10 if it was a longer ride that required hauling luggage into the boot. Food delivery workers riding their bicycle through pouring rain could use an extra few dollars, and if you have a mind-blowing massage, consider adding between $5 and $10 to the bill.

If you’re a chronic non-tipper, director of growth at Zeller Joshua McNicol insists you’re not breaking any rules simply because “there are no rules around tipping”.

While Zeller data suggests a common amount to tip is 7 per cent across Australia, it’s still entirely based on the standard of service, which is highly subjective.

McNicol says Australians have historically tipped more at higher-end restaurants, but smaller or lower-end venues are beginning to see growth – something lower wage earners arguably benefit more from. The collective struggle of COVID-19 is likely a reason behind this. “The small token of offering is a way in which we can show that support … for staff and industries that suffered the most over the past several years,” McNicol says.

He says tipping has also become more common thanks to discreet tipping methods like QR code ordering apps and money transfer systems. The “death of cash” is slowly eliminating the “awkward situations and undue pressure” of dealing with waitstaff face-to-face, giving the customer private agency over their choice.

Technology doesn’t eliminate awkwardness entirely. If a venue doesn’t use ordering apps with in-built tipping options, one must still endure having the waiter watch as you press either “tip” or “no tip” on the EFTPOS machine.

What should I do if my friends want to tip, but I don’t?

The advice is unanimous: leave the amount you are comfortable with (even if that’s nothing) regardless of your friend’s choice. Everyone occupies a different financial position, meaning tips themselves cannot be treated as universal.

From both an etiquette and economic perspective, tips in Australia are a personal choice that will not decide the fate of an employee; thus it need not start an argument, advises Musson.

With digital payment methods, McNicol says tipping in a group setting has been transformed. Split bills and automatic tips calculated at the end of a transaction allow you to pay whatever amount without having to announce it to the world.

Economist Herault tends to disagree on this point saying the tactility of cash actually makes tipping more seamless by eliminating potentially awkward moments passing around the digital card-reader and punching in a number. Cash can be passed directly to waitstaff at your own discretion.

So, when it comes to group-tipping, leave as much or as little as you like, and select whichever payment method you find least public.

Is there a downside to tipping?

If you leave an extra $10 for your waitstaff, you want to know that money will make its way to their pocket and not the restaurant’s millionaire CEO. United Workers Union executive director Dario Mujkic says best-case, tips are distributed evenly, but worst-case, they’re absorbed by the restaurant or company.

If in doubt, Musson recommends passing cash directly to your server alongside a simple, yet meaningful, “thanks very much for looking after us.”

At Uber, 100 per cent of every tip goes to the specified driver, says Emma Foley, Head of Drivers at Uber ANZ. Some other companies may also guarantee this, but others (particularly bars and restaurants using ordering apps like Mr Yum and me&u, which generally do not specify waitstaff) may not.

A hyper-dependence on tips in Australia could also set a precedent resulting in fewer instances of employee pay bumps, Mujkic says.

“The more hospitality workers need to rely on tips, the more likely they’re to be subject to harassment from customers and wage theft from a bad boss. Hospitality workers deserve decent pay and more job security, not just tips,” says Mujkic.

“We should never move towards a US-style system where tips replace wages.”

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