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“Keep the change” – the truth about tipping

By: Reading Time: 5 Minutes

Ten percent, or 20? How much should it be? Is it an extra thank you or mandatory? The debate about tipping is an ongoing international issue. Where does the term come from? Who does it belong to – and what is its status in terms of employment law? KTCHNrebel conducted research and talked to a lawyer about this topic – and offer insight into tipping customs in other countries.

Gratuity or token of appreciation? 

The issue of tipping in the gastronomy sector is a constant source of debate. After the German anchorwoman Anja Reschke recounted the experiences of a waiter on Twitter at the end of July 2022, the debate broke out again. Everything is getting more expensive, so people tend to hold on to their money these days.

Service staff counting their tips which becomes less and less

Image: Fotolia | tanatat

A recent study by Jägermeister confirmed the status quo in Germany: 1,196 people were surveyed, including 106 bartenders, 116 restaurateurs and 68 taxi drivers. The result: Corona has changed the way people go out – basically, they go out half as much as they used to. As a result, this means fewer tips. According to the study, 92 percent tip in restaurants, 60 percent in bars and 54 percent in pubs. The average tip was five percent. That is half the ten percent normally expected in Germany! Most of the restaurateurs interviewed emphasized that tipping is more than just a sign of appreciation; it also provides motivation for employees.

Social psychologist and marketing professor Michael Lynn from Cornell University in New York is an expert on US tipping culture. His latest study on tipping and Corona shows that tips increased during the pandemic, such as for pizza delivery services as well as at fast food and full-service restaurants. At the same time, however, there was a one to two percent decline in face-to-face dining transactions at restaurants with service. “The more extroverted people are in a country, the larger the number of professions where tips are given, and the higher the tipping percentages,” the tipping expert said. Tipping 15 to 20 percent is common in the USA. In most U.S. states, tips are not a perk, but rather the main income. Service workers in the restaurant industry are paid a very low minimum wage, and therefore rely on generous diners. To this day, how much you should tip is a controversial topic. After all, the fact is that each guest can still decide for themselves whether or not they leave a tip for the service staff.

customer putting money in the tipping box at a restaurant

Image: AdobeStock | luckybusiness

History: ‘tips’ already around in the Middle Ages

Tipping – where does the term come from? A look at history: The word “Trinkgeld” (tip in German) can be traced back as far as the late Middle Ages in Germany. The person giving the tip implied that the tip should be used to drink to their health. Bibalia (latin for tips) were already included in the weekly accounts during the construction of Prague Cathedral between 1372 and 1378. Later, in his 1788 treatise “On Human Relations,” Adolph Freiherr von Knigge recommended “giving the wagon master a good tip.” However, the origin of the internationally accepted word “tip” cannot be clearly determined. British inns reportedly had bowls labeled “To Insure Promptitude,” where you should toss coins up front as a tip. This was done to “assure quick service.”  Another possible origin of tip is from the slang word “to tipple”.

Even in the past, tipping was sometimes controversial. Around 1900, an “anti-tips league” was even founded in Germany, but it was ultimately unsuccessful. There were also various legislative initiatives to ban tipping until the Weimar Republic. Tipping was also not necessarily popular in other countries: In 1909, Washington was the first US state to pass an anti-tipping law.

"Keep the change" - customer paying at restaurant

Image: AdobeStock | DWP

Legal information on the subject of tipping:

What is the legal situation in Germany?

We asked lawyer Dr Gerhard Engelmann, District Managing Director of Dehoga-Middle Franconia, about this topic. “Tipping in Germany is not mandatory. It is a voluntary gesture, an extra thank you from the guest,” says lawyer Dr Gerhard Engelmann. This is also the case in most other countries. “Tipping tax was abolished in 2002, by the Schröder administration at the time,” the lawyer said.

Who do the tips belong to?

“First of all, it is a gift from the guest, usually for the service staff. The guest could split the tip between service and kitchen staff, as in the case with larger celebrations,” says Dr. Engelmann. As a matter of principle, the employees alone should determine how to share the tips among themselves.

What does labor law look like?

“You should not regulate the tip in the employment contract. Likewise, the business owner or manager should not determine how to handle the employees’ tips,” the lawyer said. The business owner should avoid doing anything that goes in the direction of collecting tips. “This could very easily be considered business income by the tax authorities and be taxed accordingly. On the other hand, if the business owner then pays the tip back to the employee, it would be additional wages and therefore subject to payroll taxes.”

This much tipping is customary around the world:

  • Austria: The usual amount in restaurants and cafes is five to 10 percent, which is done to show appreciation. The amount is usual rounded up or the remaining change is left behind.
  • Italy: Italians have a service charge called coperto (place setting in Italian), which is added to the check. It is acceptable to leave about five to ten percent of the total amount on the table in cash.
  • France: In France, the check usually includes a 15 percent service fee. The service fee is included at the bottom of the check as “Service compris 15%”. The French also leave “pourboire” (tips) on the table – that is, unless the restaurant prohibits it, which is indicated by the words “Pourboire interdit” (no tipping).
  • Spain/Portugal: In southern European countries, tipping is not compulsory. However, the staff will be happy to receive a tip of about five to 10 percent of the total. Tipping a very small amount, such as rounding up €9.95 to €10.00, is considered impolite.
  • Scandinavia: In Sweden, tips are often included in the price, both in hotels and restaurants. Tips are not common in Denmark either. However, the service staff will be pleased to receive a small tip.
  • United Kingdom: Tipping 10 to 15 percent is common. Many restaurants automatically add a service fee to the bill. However, this is only the case in bars and pubs if the waiter brings the drinks to the table.
  • Ireland: Tipping five to 10 percent in a restaurant, pub or cafe is normal.
  • Switzerland: The service has been included in the price in Switzerland since 1974. Nevertheless, tipping around 10 percent is customary.
  • USA: The tax is shown and added to the bill, but tips are not. You are expected to leave a 15 to 20 percent tip for the service staff. In popular tourist destinations, particularly in cities like Orlando and Miami in Florida, the service charge is often included in the bill, in which case “tip is included”is at the bottom.
  • Canada: In Canada, you tip about 15 to 20 percent in restaurants, and this is not included in the bill. However, if your bill states “Tip/Gratuity included”, you do not have to pay a tip.
  • Mexico: In restaurants, tipping 10 to 15 percent is common. Giving tips is voluntary in Mexico. However, tipping is an important part of their income for many Mexicans working in the service industry. You should therefore note whether there is a service charge included in the bill.

 

 

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