Here's the number that explains why US tipping culture is what it is: $2.13 an hour. That's the federal cash wage a restaurant can legally pay a server, with the assumption that tips will carry the rest. Nowhere else does the math work quite this way, which is why visitors — and plenty of Americans — routinely get it wrong.
Sit-down restaurants
15-20% of the pre-tax bill is the standard range: 18-20% for good service, 20%+ if it was genuinely excellent. Watch your bill for an automatic 18-20% "gratuity" charge on parties of six or more — restaurants add this by default, and tipping again on top of it is a common, easy-to-avoid overtip.
The $2.13 that makes it all make sense
The federal tipped minimum wage has sat at $2.13 an hour since 1991 and hasn't moved. Employers can pay that low cash rate as long as tips bring total earnings up to the standard $7.25 federal minimum — the gap, up to $5.12/hour, is called the tip credit, and the employer is legally required to cover any shortfall if tips don't get there. Seven states — Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington — ban this arrangement outright and require the full state minimum wage in cash, tips on top. Everywhere else, tips aren't a bonus. They're most of the paycheck.
A 2026 update worth knowing: tips just got a federal tax break
Since July 2025, tipped workers can deduct up to $25,000 a year in qualified tip income from their federal taxable income, running through the 2025-2028 tax years under the One Big Beautiful Bill Act. It's a real, meaningful change — but it only touches federal income tax. Social Security and Medicare still come out of tip income as normal, and each state independently decides whether to follow suit; several haven't. None of this changes what a diner should actually tip. It changes how much of that tip the server actually keeps.
Beyond the restaurant table
Bartenders: $1-2 per drink, or 15-20% of the tab. Rideshare and taxi: 10-15%, though far less rigidly enforced by social expectation than restaurant tipping. Hotel housekeeping: $2-5 per night, left daily rather than saved for checkout, since staff rotate and the person who cleaned your room Tuesday may not be the one there Friday. Hair stylists and barbers: 15-20%. Food delivery: 15-20% or a few dollars minimum, worth taking seriously since drivers are usually covering their own gas and vehicle wear.
Where the expectation doesn't apply — yet
Fast food counters, self-checkout, most retail — none of these carry a real tipping expectation, even as point-of-sale screens increasingly ask anyway. This mismatch has a name now: "tip creep," and it's become a genuine point of friction between customers who feel pressured to tip in places tipping was never traditionally expected.
One small technical detail
Proper etiquette calculates the tip on the pre-tax subtotal, not the total after sales tax. Most people round up or tip on the post-tax figure anyway — the difference is usually small enough not to matter — but if a card reader is suggesting percentages, it's worth a glance at which base it's actually using.
Calculate an exact tip and split it evenly among any group size with the Tip Calculator.
A few things people actually ask
Does the new tip tax deduction mean I should tip less?
No — it changes what a server keeps after federal income tax, not what a fair tip actually is. Standard etiquette (15-20%+ depending on service) hasn't changed at all.
Do servers still pay tax on tips at all?
Yes. The federal deduction only applies to income tax, up to $25,000/year through 2028 — Social Security, Medicare, and (in many states) state income tax still apply to tip income as normal.
Is it rude not to tip at a self-checkout or fast food counter?
No — there's no traditional expectation there, even though screens increasingly prompt for a tip anyway. This mismatch is common enough now to have its own name: "tip creep."