Preet Banerjee

# How we feel about tipping on wine, tax and the total bill Add to ...

Although leaving a tip at a bar or restaurant is par for the course among Canadians, there is little agreement on how much to tip and on what. After last week’s column on tipping, we asked readers to submit their two cents on tipping etiquette, generating many comments and some more food for thought.

Tipping on the tax – Readers uniformly detested the idea of calculating the tip based on the total bill. If the percentage tip was determined to be 15 per cent for a particular visit, readers felt it should be calculated as 15 per cent on the total before taxes. It’s important to note that if you use the automatic tip calculation option on a payment terminal, the percentage options will tip on the total including tax. To avoid tipping more than your personal guidelines would suggest, you’ll have to select the option to input the exact tip amount.

Many people might balk at doing the math, but a simple mental way to calculate a 15 per cent tip is to move the decimal place one digit to the left to figure out 10 per cent, then simply add half that amount to get to 15 per cent. Another quick way would be to remember that every \$10 would generate \$1.50 in tips, and every \$1 would generate 15 cents. So a \$65 bill before tax would be (6 x \$1.50) + (5 x \$0.15) = \$9.75. You can always make these calculations on your phone.

Tipping on wine – Many readers gravitated towards a flat rate for tipping on bottles of wine. If you ordered the exact same meal but one week had a \$50 bottle of wine and the next week had a \$100 bottle of wine, few argued that the tip should vary by \$7.50 between these two meals (using a 15 per cent tip amount). A flat rate of \$5 or \$10 per bottle might be a better option. A higher flat amount may be warranted for wines that are decanted, which may be a service offered for the higher-end bottles on the menu. For the few who actually take advantage of establishments that offer the Bring-Your-Own-Bottle option, the same flat tip per bottle without tipping on the corkage fee may be appropriate.

Customer responsibility for tip-outs – Something that not everyone knows is that a generally accepted practice in many restaurants is for servers to be charged a percentage of all sales they handle on their shift. That amount might be 4 per cent and may be split with kitchen staff, hosts and hostesses, and in some cases, even the restaurant owners. This amount is charged regardless of whether or not a table leaves a tip for the server. Readers were divided on whether or not this is a concern of the patron. Some felt that tipping is a means to subsidize required tip-outs as well as a gratuity for good service and so they tip more. Others don’t feel they should be dragged into the internal economics of running a restaurant and will simply tip, or not, based on the level of service they receive.

Elimination of tipping – One reader provided a link to an article written by a restaurateur who eliminated tipping at his restaurant and replaced it with a service charge of 18 per cent on all bills. His insights are worth reading. He found that his servers did a better job, and that food quality improved.

Preet Banerjee, a personal finance expert, is the host of Million Dollar Neighbourhood on The Oprah Winfrey Network. You can read his blog at WhereDoesAllMyMoneyGo.com and follow him on Twitter at @preetbanerjee.

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