Canada’s average restaurant tip is 17.2 per cent.
More than 4,200 people filled out a recent newsletter survey on tipping and the vast majority of them said they tip between 15 and 20 per cent.
The prompt for surveying readers about tipping was, first, the rising price of restaurant meals as a result of pandemic inflation and, second, Ontario’s move to bring servers up to the same minimum wage standard as other workers, as of Jan. 1. The current minimum wage for bartenders and servers in Ontario is $12.55, compared to $14.35 for others (data on all provinces here). Starting Jan. 1, the new Ontario minimum wage for all will be $15.
Job vacancies soar beyond one million in tightening labour market
Just under 59 per cent of survey participants said they plan to tip the same going forward, one-third said they will tip less and the rest said they would tip more. As ever with tipping, there was disagreement in the survey results about whether to apply the percentage tip to the total bill or the pre-tax amount.
A small minority of survey participants specified in completing the survey that they tip on food and drink costs, not the tax portion of the bill. I looked online for views on this and the consensus seems to be that it’s fine to tip on the pre-tax amount, but tipping on the entire amount is what a lot of people end up doing.
One reason to tip on the full amount is that it’s a generous thing to do for people who work in a sector that was hit hard in the pandemic. Also, tipping 17.2 per cent on the tax portion of a restaurant bill doesn’t add much to the cost of dining.
That said, the payment terminals used in restaurants definitely steer people toward tipping on the full bill. These terminals typically offer preset tip percentages as you complete your payment with a credit or debit card. I asked on Twitter if people found these preset percentages were applied to their full bill with tax included and the consensus answer was yes. Many did not seem happy with this arrangement.
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Rob’s personal finance reading list
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Living at the mall
Canada’s most valuable mall, Toronto’s Yorkdale, is adding apartments to create a mixed-used property. We need more rental stock badly, so this is a promising development. But my recollection of Yorkdale as a one-time Toronto resident is that we should expect luxury rentals, not affordable ones.
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The days of seniors getting free banking are long over, but banks still offer lower-cost packages to seniors.
Inflation Alert
From a reader in Richmond, B.C.: “On the weekend, my young daughter and I were at a mall and went to the food court for lunch. She wanted the $8.39 popcorn chicken combo from KFC. I ordered it, but when they handed me the credit card terminal it indicated I was paying $10.59. I pointed out that it was higher than the $8.39 price on the menu board, but was told their prices have gone up. The worker pointed to a box behind the counter and said that the new signage was in the box, but they hadn’t gotten around to putting it up yet. That’s a 25 per cent price increase!”
Today’s financial tool
To mark Financial Literacy Month: A financial literacy self-assessment quiz offered by the Financial Consumer Agency of Canada.
The Money-Free Zone
I can’t get enough of the guitar bit at the end of the song What It is? A gem from an overlooked 1970s psychedelic soul band called The Undisputed Truth. You may know their song Smiling Faces.
Tweet of the week
A parent asked for book recommendations for teens going to university soon. A couple of recommendations followed.
In case you missed these Globe and Mail personal finance-related stories
- How to reboot your portfolio with Canada’s ETF guru
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- Seniors have a lot of stuff: Here’s how to downsize instead of dumping it all on heirs
More Rob Carrick and money coverage
Subscribe to Stress Test on Apple podcasts or Spotify. For more money stories, follow me on Instagram and Twitter, and join the discussion on my Facebook page. Millennial readers, join our Gen Y Money Facebook group.
Even more coverage from Rob Carrick:
- 🎧 Catch up on Stress Test: Are your parents giving you money? • Why it’s time to stop shaming the renting lifestyle • Is now the right time to buy a house? • Why are young Canadians leaving the cities they love? • Eating in: How COVID has shifted our food spending • Crisis-proof your finances? • Can you afford to live downtown? • The cost of kids
- ✔️ The housing file: The housing boom is ripping apart the financial fabric of Canada • Shut out: A well-qualified millennial home seeker throws up his hands after losing multiple bidding wars • Big city housing affordability is over – now what? • She sold her Toronto house to retire somewhere cheaper, but it didn’t work • How young adults and the whole country win with a tougher mortgage stress test for home buyers • Can’t afford your house? It’s likely not your fault
- 📈 Investing: Robo-advisers have grown out of the novelty stage. Here’s help in finding one right for you • The 2021 ETF Buyer’s Guide: Best Canadian equity funds • The 2021 Globe and Mail online brokerage ranking: Who’s best for investing … and answering the phone • Are these the stock market returns of a lifetime? • On the cusp of retirement and wondering about an ETF that pushes the limits on aggressiveness
- 💰 Your money: The five most important numbers for checking the health of your personal finances • Today’s freakishly low mortgage rates can’t last. What will pandemic home buyers do when they rise? • There’s a cost in money, isolation and family stress when seniors choose to remain in their own private homes • Taking CPP early can cost you $100,000 and limit your long term options • Fleeing the city for the suburbs? Watch out for higher property taxes, more cars and other costs
Are you reading this newsletter on the web or did someone forward the e-mail version to you? If so, you can sign up for Carrick on Money here.
Rob Carrick