851428_coin.jpgI have always tipped on the total bill and it wasn’t till starting this series that I learned that there are people who don’t. Of all the things people say you’re not supposed to tip on this loophole made the most convincing argument.

First off, a little restaurant economics, and Vixen, feel free to correct me. A servers’ income is taxed on her sales, which is assumed to be 8% after tip outs. The sales tax is also based off the same items the servers are taxed on. In essence that line item is not a sale and therefore not income. From an accounting perspective, there is no obligation that one should have to tip on this amount.

But as the Straight Dope response so aptly illustrates, people get a little touchy when you talk about reducing a tip:

“The bottom line is: The cost-less-tax thing is a [BLEEP] argument so you can be a cheapskate. You’re talking about an extra quarter or buck or whatever. It’s a small difference for you. You’re the patron at the restaurant, you can afford the price of the meal. The waiter or waitress works on a crummy salary and depends on tips to earn a living. So, big deal, you save a buck and the waiter feels hurt and undertipped and gets paid less. Sorry, bud, but that’s about as cheap as it gets.”

Ouch!! Harsh words. But let’s re-examine the main point: the tip on tax is a trivial amount. Honestly here in Atlanta you can’t get out of a semi-nice dining establishment for less than fifty bucks. And as we saw with certain high ticket items, like wine, the incremental costs can really add up. So I decided to tally the numbers in Excel and see what the costs and savings actually were. I used a 10% sales tax and a 20% tip, which is around what I pay here. I’m not sure if the alcohol sales are taxed differently and given the preliminary results I’m not really that concerned. See for yourself:

Bill Sales Tax Tip on Tax
$10.00 $1.00 $0.20
$50.00 $5.00 $1.00
$100.00 $10.00 $2.00
$300.00 $30.00 $6.00
$600.00 $60.00 $12.00

Now I’m hesitant to call any amount of money “trivial” but this just doesn’t seem to be worth getting that upset about. Even at a super-expensive level, there just isn’t that high a return from diligently tipping on the pre-tax amount. It equals out to about a 2% savings on the total bill.

Money aside, many people don’t believe in tipping on tax based on the principle. I don’t see anything morally reprehensible about omitting it, though you can expect some dirty looks if the server was expecting 15% of the total bill and gets what he thinks is 13%. And of course you always run the risk of being called cheap. But if you tip 20% or more on the base, I doubt anyone even notices. For me it’s worth the “extra” 2% just to keep things simple and tip on the total.

As always your comments are welcome. The “official” tipping etiquette Survey is still running, so click over to weigh in.

When not eating fifty-dollar meals at various restaurants in Atlanta, Mike writes Broken Cupid, a dating blog for single gay men.