How to tip properly to show you're a savvy business traveller in the USA

By John Walton, January 26 2011
How to tip properly to show you're a savvy business traveller in the USA

Tipping in the US is deeply controversial among business travellers from other countries. How much should you tip? Who expects a tip? And, most importantly, how do you cultivate the air of a savvy business traveller and avoid looking stingy, rude or clueless to American contacts?

Regardless of your personal thoughts about the tip/don't tip argument, it's probably not good for business to get into a comparative cultural study about how your home country treats its service industry better.

Just like offering your business card with both hands in China and Japan, tipping is a part of American culture and smart business travellers know how to deal with it.

At the risk of generalising, Americans don't look too kindly on foreigners who stiff service staff. Sure, you may be having a business lunch with an executive vice-president wearing a power suit and Manolos, but she might have waitressed her way through college or her son might be a waiter on a $2.13/hr base salary. She'll be judging you on your behaviour.

So -- with the caveat that this is all pretty subjective but checked with actual Americans -- here's our guide to tipping to get good service in line with US etiquette.

Top guidelines for tipping

Always, always tip

If you want to be seen as someone who knows how to do business in the US, never skip the tip.

Even if you've received the world's most abysmal service, excuse yourself from colleagues, express your displeasure to the manager, and tip 5%. The manager can usually fix it for you (sometimes with a discount or taking things off the bill) and you'll have made your point.

Plus, you'll avoid the deeply undesirable experience of having someone chasing you (and, worse, your colleagues) out into the street shouting that you've forgotten the tip. 

Tip early, tip often

If you're on a longer trip or you're a frequent visitor to a particular spot, tipping helps to build up a relationship with service staff. If you'd normally tip 15% for a service, tip 25% the first time and seek out the staff member to thank them, perhaps mentioning that you're there from Australia (no, you don't have a kangaroo; yes, the person probably did see Oprah in Sydney) and that you'll be staying for a while. And keep tipping each time you return, but no need to be continually over-generous unless you receive particularly outstanding service.

Get the tip itemised on the bill

Corporate expenses and tipping don't tend to go together well. Policies vary from specific percent maxima to guidelines. But if the tip is printed on the bill, experience shows that the corporate beancounters are less likely to quibble.

So, on arrival, have a quiet word with the maitre d' or server away from your guests, explain the situation, tell them that you want to make sure that their tip is taken care of by your company, and ask them to include an itemised tip at 20%. The service is likely to be top-notch: restaurants love a thoughtful customer.

Tipping in bars and restaurants

Only the host of a meal tips in a restaurant, though anyone can tip bartenders. At the bar, tip $2-3 per drink, $5-10 to start if you're going to be there a while and want to be top of the bartender's list.

Here's a rough guide to what savvy business travellers like to be seen to tip for meals:

  • 25%+ is extraordinary service
  • 20% is great service
  • 15% is good service
  • 10% is average service
  • Only for dire service should you consider going lower, and only if it's actually the fault of your waiter. At this point you should probably be having a word with the manager.

Should you include drinks when you calculate the tip? That's even more contested than tipping in general. If you're aiming for the "not stingy" look, then yes, include the drinks. If you've used the services of a sommelier, tip that person separately.

If you're hosting a meeting in a restaurant, consider having a quiet word with the maitre d' or your waiter when you arrive. Explain that you're having an important business meeting and ask them for anything you need (if you want a particular gap between courses so you can talk about something in-depth, for instance). Pass them a tip of about $10-20 per hour (even more if it's the best restaurant in town) and you'll be golden.

Tipping in hotels

Tipping housekeeping is another hot-button issue. Most business travellers won't be inviting colleagues back to their hotel rooms and so don't risk being judged on the level of their hotel tips. But for the best service, a tip of a few dollars per day goes a long way. 

Do you want extra packets of coffee left out each day without having to call housekeeping first thing in the morning? Leave a note for the cleaning staff with a tip (say a dollar per day or $10 for a week-long stay).

Hotel staff are sometimes instructed not to touch money in the room unless left in a marked envelope, which is probably a good idea -- if you don't have an envelope to hand just enclose it in a folded over note.

There's no need to tip for directions, but if the concierge scores you and your colleagues a table at a hot restaurant, or gets you corporate box tickets to a ballgame, a tip of $20 is a good idea.

Tip $2-3 for valet parking (you really don't want to quibble with the rental car company if it gets "accidentally" scratched), and a couple of dollars if the door staff get you a taxi (an extra buck if it's raining, snowing, or 40 degrees C outside). 

Luggage porters or bellhops get one or two dollars per bag, but round down if you have several cases. 

While you never tip normal public transport drivers, a couple of dollars to a hotel bus driver who's carried your case or held the bus for you is a good idea. This is especially true if you're likely to come back soon and want the bus to wait for you next time.

Tipping in taxis, limos and chauffeur-driven cars

Tip 15-20% for taxis, or less if you weren't satisfied and you hope never to see the driver again. 

If you're using a limo service (what we'd call a pre-booked car) or a chauffeur it's also 15-20%. As usual, if you're going to be a repeat customer, consider tipping a bit extra the first time so the driver's always waiting for you and gives you the best service.

Tipping baristas in coffee shops

There's almost always a tip jar. Pop a couple of coins in there (more if it's the cafe next to the hotel you're staying at all week and want them to remember your order).

Tipping hair stylists and barbers

Tip the person who cuts your hair a few dollars unless you're really unhappy with your new look. You can usually tell how much the customary tip is by the cost of the service: if it's a $23 haircut, tip $2 to round it up to $25.

If you're in a salon, you should tip just about everyone you come in contact with a dollar or two: the person who brings you a drink, the person who washes your hair...

Australian Business Traveller's top tip

Carry plenty of $1 bills. It's a pain to carry a thick wad of singles because they take up so much room in your wallet or purse, but it shows that you're a good tipper and a well-prepared business traveller. Americans notice this -- especially if you've just arrived and are seen to be prepared and ready to do business. That's a good look for any business traveller.

John Walton

Aviation journalist and travel columnist John took his first long-haul flight when he was eight weeks old and hasn't looked back since. Well, except when facing rearwards in business class.

Qantas - Qantas Frequent Flyer

24 Nov 2010

Total posts 60

One staffer explained it to me once, common question in the service industry

Q: What's the difference between an Aussie tourist and a canoe

A: It's easy to get a canoe to tip

Seriously though they do work on sub standard wages in the US and tipping makes up the shortfall, it's also possibly the reason why service is quite often of a very high standard, I've been to the US around a dozen times over the years and I don't recall getting poor service anywhere, even fast food service is met with enthusiasm that is unheard of anywhere else

Something we're not so used to but much more palatable while the dollar is near parity, some trips I've been on it hasn't been out of the ordinary to go through several hundred dollars just on tipping, one trip years back the dollar was in the mid 50's, that was a costly trip but something that does need to be budgeted for

08 Sep 2011

Total posts 1

I just wanted to comment that, as a former restaurant server in the US (I served during college ;) ) the percentages are slightly off from what we tend to expect.

- 20%+ for great/extraordinary service
- 18% for good service
- 15% for acceptable service
- Less (usually 10%) for terrible service, at your discretion. If you feel the need to tip this low, it's probably not worth going back.

From what I understand, things in the US generally cost less than in Australia (According to a relative of mine who's Australian, it's around $18 to see a movie in Australia? Here it's only $7 for a movie, $10 for 3D). Likely, at least in part, because of our minimum wage being so low.

Great article otherwise.

03 Jan 2011

Total posts 665

Huh, that's interesting. Can I ask where it was that you worked? Your tip rates (and your movie prices) don't flesh with my NYC and suburban NY baselines, and I'm wondering if you went to college in a markedly different part of the country.

16 Aug 2012

Total posts 1

The US is not one market, for the past 35 years I've based my restaurant tipping on the sales tax shown on the end of the check (bill).  US sales tax varies from place to place as it's made up of City, County and State sales taxes.  Therefore in a low cost of living location the sales tax is low, and in the big cities sales tax is high, as cost of living is high in these places. The easy rule is to make the tip double the sales tax amount, it may not be the highest tip but will be in the right ball park, if you want to be generous then tip at 2.5 to 3.0 times the sales tax.

03 Jan 2011

Total posts 665

The problem is that sales tax doesn't directly correspond to cost of living -- and some cities and states forego sales taxes entirely.

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