The reason I tip 20% at restaurants

I love rules of thumb (even if the origin of this phrase is quite interesting), because they make my life simple. As I got older, I came to realize the importance of not having to think about things that don’t really matter, so that I can focus my energy on making decisions that have an impact.

If you’re from the US, you know you are expected to tip at a sit-down restaurant. It’s not really a tip; it’s more like your share of the server’s salary: the restaurant owner pays one part, and you pay the other, irrespective of the level of service you receive. Typically, if you tip 15%, you’ve covered the salary-share of the waiter. Anything you pay beyond this is the actual tip for good service. If you’re at a fast food restaurant, a food truck, or a food court where nobody comes to you to recommend dishes and refill your water, and you tip, then 100% of that is a tip because it is truly optional and not paying it doesn’t make you feel guilty.

And if you’re not from the US and you weren’t aware that tips work differently in the US than in the rest of the world, welcome to America… Yeah we do things a bit differently here.

Anyway, years back I had a roommate in Seattle who had previously been a waiter. He told me that life was tough for waiters, so whenever he ate out he would make sure to leave a generous tip of at least 20%. He told me that rule one time we ate a Mexican restaurant in Green Lake, and it got me thinking. Some time later I would meet a new friend who told me he always tipped 20% because, to him, the difference between 15% and 20% comes out to be only a few hundred bucks each year which is small compared to other types of expenses. And, 20% is easier to calculate than 15%.

Bingo.

Since that day, I’ve been sticking to the 20% rule. 20% is indeed so much easier to calculate than 15%. And while I’d like to show off my arithmetic skills sometimes, I’d rather the tip calculation not be a detraction from a nice dinner I have with my good friends or my wonderful dates. 5% does not make a dent in my wallet, but I know it means a lot to the people who make a living on it. The servers win, my friends win, and I win.