When do you tip + Good reads from the PF community

Despite growing up in Canada for more than half of my life, I have never gotten used to tipping. You see, tipping is not a common practice in Taiwan.

Tipping is also not common in Denmark. So whenever Mrs. T and I are asked to tip, we usually end up questioning whether it is really necessary and wondering how much we should tip.

We get it, restaurant servers are getting minimum hourly wages, so they rely on tips. Years ago, the customary rule used to be to tip 10-15% when eating at a restaurant. Nowadays, that range has increased to 15-20%, some places even expect you to tip 25% or more.

Imagine going out with a group of people and having to tip 25% on top of a $200 bill!

I’m fine tipping when I get decent service but I get annoyed when I’m “expected” to tip.

For example, we went out for a large family dinner at a local restaurant a few months ago. Since we had 19 people for the dinner, I knew the large group service charge would be automatically tagged on. I was not a happy camper at the end of dinner service because of the following:

  • When we arrived at our table, the server told us that water pitchers were set aside and we had to fill up our glasses ourselves. The server did not refill our water at all for the entire dinner
  • The server took our orders and the cooks bought our food out. We basically didn’t see the server for the rest of the evening
  • The water pitchers were completely empty about halfway through our dinner. They weren’t refilled until we made several requests (the manager ended up refilling the pitchers)
  • There was a 20% group service charge on our bill, the 20% tip was calculated on the total amount

Yes, the cooks and the kitchen staff rely on tips too, but for me, the quality and quantity of service throughout this particular dinner was extremely underwhelming.

You tell me, was I justified to be outraged about the 20% mandatory tip for this dinner?

CBC pointed out that the suggested gratuity on some point-of-sale terminals is getting higher and higher. The article found that some places even have a 30% tip as one of the suggested tipping amounts. Furthermore, it’s not just restaurants that have the suggested tips. The suggested tips have been showing up at more and more service places.

While at the UBC Apple Festival last weekend, we got a cup of latte from a food truck cafe. Not surprisingly, I was presented with the suggestion tip options of 15%, 20%, 25%, and no tip before finalizing my transaction.

I selected the “No Tip” option.

Before getting our cup of latte, I saw about 15 parties paying for their orders (there was a long line). I observed that most people selected the 20% option. I counted four people who selected the 25% tip option. Other than me who selected the no tip option, only one other person selected this same option.

Am I too cheap to not tip for a cup of coffee?

Is tipping 20-25% on top of a $5 cup of latte ($1 – $1.25) a standard practice now?

This brings up the first important question:

When do you tip?

People typically tip at restaurants, barbershops, takeouts, food deliveries, and taxi services.

Do we now have to start tipping everywhere because of the low employee hourly salary?

  • Cafe
  • Grocery stores (i.e. cashiers & baggers)
  • Bakery
  • Garbage pickup
  • Spa/Massages
  • Mail delivery
  • Fast food places
  • Cable/phone technicians
  • Babysitters
  • Teachers & sports coaches

Finally, the most important question – do you tip on the total bill or the amount before taxes?

Do you think tipping is completely out of control here in North America?

Sorry for this rant!

Good reads from the PF community

Here are some personal finance/investing related articles that I enjoyed reading.

Mike at The Dividend Guy explained why cash from operations is very important for dividend paying stocks“Think how your bank account fluctuates from month to month. Most of the time it is clearly stable. If you’re making more money than you spend, you will see your bank account (or savings) grow gradually. Then life happens, and you need to replace both your refrigerator and your dishwasher at the same time (true story, happened to me this month!) your cash flow is all over the place. This teaches us, once again, that a single metric can’t explain everything.”

AI has come a long way. Preet Banerjee asked if you can tell which video clips are real and which ones are generated by AI. Why is this important? Because we need to be aware that AI can be used for financial scams. We need to stay vigilant in the new digital age.

MiniHabits explained why tomorrow is not your friend – “Tomorrow is not only a blank slate, but an unknown slate. You might wake up with a headache, an unexpected appointment, an emergency, or a really lazy mood that laughs in the face of 4 cups of coffee. If I have one cup of coffee, I will involuntarily run a marathon, but that’s besides the point. When the allure of “doing it tomorrow” makes you procrastinate to eat healthy food, clean your kitchen, file your taxes, and call your grandma, among other important things, what do you think happens after 10 or 20 years of doing it? What do you have?

Speaking of patience, Craig at Retire Before Dad emphasized that having patience in today’s impatient world is vital for investing – “More than 90% of my net worth is in traditional assets like stocks, bonds, cash, and home equity. I reserve less than 10% of my portfolio for alternative investments and speculation (e.g., real estate crowdfunding, venture capital, and IPOs). But that 10% of assets takes up most of my investment research time. That partly stems from my general curiosity for alternative investments — which are also popular blog topics. I still monitor the individual stocks in my portfolio and don’t regret buying them. But I have a long-term outlook for the portfolio and rarely act upon it because of news or earnings reports. Diversified boring investments like index funds and ETFs require occasional rebalancing. But otherwise, you can set and forget them.

Fritz reminds us that patience is very important. For me, this is a great reminder given that we’re getting closer to having enough dividends to cover our living expenses.


About to retire? How do pre-retirees plan for retirement budgeting? Ask the Money Coach have some tips for pre-retirees – “The key to a successful retirement is understanding and managing your expenses, assessing your income sources, creating a realistic budget, and making informed financial decisions. In this article, we’ll cover all of these topics and more. By the end, you’ll have a clear roadmap to help you navigate the financial aspects of retirement with ease. So, let’s get started! But before we do, take a moment to envision your ideal retirement. What does it look like? Whether it’s traveling the world, indulging in your hobbies, or simply enjoying quality time with loved ones, having a clear vision of your goals can provide you with the motivation you need to make smart financial choices. With that in mind, let’s explore the first step in retirement budgeting: understanding your expenses.

Nelson interviewed Jim, a fellow Canadian dividend investor who retired early with a $3M portfolio generating $120k per year. There are some really great lessons in this interview – “I want my stocks to go up. Like we’ve talked about, underlying earnings are what matters, and when I look at stocks I’m trying to see how earnings go higher. I want growth. Everyone should want growth. But when I screw up and that growth doesn’t happen, then I at least know I’m protected by that dividend. Paying out those earnings to the owners also makes sure management doesn’t do anything stupid with the money — like most share buybacks.” Jim is certainly on a similar path as Reader B who received $360k in dividend income a year only a few years ago (this number has since increased thanks to organic dividend growth).

Jim's portfolio
Jim’s portfolio as a reference

Andre Hallam’s recent article called Why this is Europe’s favourite retirement destination caught my eye, especially considering Mrs. T and both kids have Danish passports and it’s not as easy for me to get Danish residency – “Portugal might be the most popular country in Europe for retirees on a budget…a lower-cost route A D7 Residency Visa, also known as a Retirement Visa or a Passive Income Visa. Compared to the ritzier requirements for the Golden Visa, the D7 is more like a McDonald’s Value Meal. According to Atlantic Bridge Consulting & Investment, the D7 Visa requires a passive income of about €9000 a year; a minimum €9000 deposit into a Portuguese bank account, and a clean criminal record.

Speaking of living abroad, Nomand Numbers recently became a permanent resident in Taiwan and wrote an excellent article on how to become a permanent resident in Taiwan. Taiwan remains a great place for retirees due to the low cost of living compared to North America. It also has excellent healthcare. We have always thought about moving to Taiwan for a few years once we’re financially independent – “The APRC application process is quite straightforward and doesn’t necessitate the involvement of a third-party company if you’re familiar with the requirements. If you meet the qualifications for the Gold Card, you can obtain an APRC in just 3 years. Gold Card holders enjoy an expedited application process (3 years instead of 5) and are eligible for the foreign professional APRC, which is the most generous option available in Taiwan. This particular APRC only requires you to be in Taiwan for one day every 5 years.

Have a great weekend everyone!

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18 thoughts on “When do you tip + Good reads from the PF community”

  1. Hi Bob,
    Thanks for continuing to share informative content. I’ve not been reading your articles for a while and its good to be back.
    I want to share my thoughts on the tipping culture. I personally tend to tip in restaurants and barber/salon shops. I used to tip taxis years go however later I started using Uber and other apps and tried to my spending there. Hey, im not trying to be mean or trying to question someone’s right to receive tips, but it should be more voluntary rather than forced on to someone. Neverthless I still believe the tips at restaurants is here to stay and is common across the world although the amounts and %ages vary. I didnt observe any tip being paid for coffee or in fast-food places in Toronto, not too sure if this practice is prevalent in other provinces or cities. I pay tips at salons and reduced use of restaurants to fine-tune my budget as well as eating habits.

    My wife and I’ve taken a decision not to eat out or go to restaurants unless its a justified special occasion or like a travel or long-drive stopover. I’m not a great fan of fine-dining because lot of time goes in to starters, soups, etc and I honestly dont have time to sit, chat and rant for a hour esp. when we have short summer in Canada and need to use it to our advantage asap. In fact during summer we also experimented with packing home-made lunch, snacks, etc which not only turned out healthy and safe but also convenient during travel or long drive days. I eat out only on select occassions and appreciate that convenience and value service provided by people working in the sector, but I dont want to make it a regular habit. My choice is unpopular but hey I have to take care of my health and finances and choose what works best for me.

  2. Thanks for sharing, Bob. Missed you at FinCon last week. They need to get back on the West coast!

    Tipping is starting to annoy me as well. I go to a coffee shop some evenings when my daughter is at dance class and order an overpriced small fountain drink ($3). The tip request always pops up. The person grabbed a cup and gave it to me so I could fill my own cup.

    Seems the companies should just pay more.

  3. I HATE that ” if you can’t afford to tip, you can’t afford to eat out” saying. I know a number of servers who are younger and in all cases when they stopped working as a server after university (to become a police officer, accountant, and police officer) they took a PAY CUT!! Not to mention that they are unfairly able to hide a huge part of their pay from taxes, while most of us don’t have that option. So this attitude of “the poor servers rely on tips” really annoys me when loads of people makes less per hour than servers. And let’s not even get I to the fact that attractive people have a huge advantage in getting hired into server positions which is super unfair.

    • It’s definitely unfair and unfortunate these people took a pay cut when going into other profession. I’d rather have restaurants paying servers a proper wage by including that in the cost of food/drinks than have the expectations that one must tip. Tipping is becoming a mandatory gesture lately and it has gone overboard IMO.

  4. Hey Tawcan,

    Too bad we couldn’t catch up while you were in Taiwan. The timing wasn’t great with my family in town, and we were showing them around the country.

    Thanks a bunch for giving a shoutout to our recent post about how we became permanent residents of Taiwan! It’s been a thrilling journey for us, and I’m really glad you shared it with your audience. Hopefully, more people looking to add a permanent home to their list will consider Taiwan.

    About tipping, we hardly ever tip outside the USA, at least as far as I can remember. Of course, we haven’t been everywhere, but in most countries, tipping isn’t the norm because the service is usually included in the price of the food you order. It’s that simple!

    Mr. NN

  5. It’s out of control. I get servers are making minimum wage but most the servers I know are making more per hour then a lot of people with those tips they don’t claim tax on.
    I work in the utility industry maybe I should knock on the door when I get your power back on.

  6. I haven’t experienced your service situation but if I had, I would have spoken to the manager to get the service charge reduced to 10%. If refused, I would tell them I’d write up a bad but truthful review on google and yelp. I doubt the manager would refuse.

  7. I’m with you Bob . I never tip for takeout or a beverage.
    That feeling of throwing money away is why we’re frugal and manage our money well.
    It must be genetic and generational for me as my parents were born in 1940’s and were brought up in austerity in Ireland and Australia.
    Nothing like adversity to focus the mind and things that are important. It’s self reliance and a knowledge that only you can provide the best . I teach my kids that “Money doesn’t grow on trees “ “ save for a rainy day”.
    In only the last 50 years have Western government stepped in to provide a back stop for everything to their citizens. Prior to that citizens were on their own.
    It has created extremely high expectations that people have become dependent on the government for everything and not themselves .
    So we avoid eating out as much as possible and create gourmet feasts and great memories at home with the family.

  8. I believe there is no tipping in Australia either.
    My spouse and I were recently in Spain Sept/Oct 2023 and there is no tipping. In fact there is no option for tipping when paying. All the service was great and nothing is ever paid for until after the item or service is received. You never pay first and then receive the item or service which is the way it used to be in Canada and should be.
    It was a real pleasure and wonderful experience traveling in Spain for 3 weeks.
    The quality of food, service, transportation, cleanliness, helpfulness, respectfulness was all second to none. Would go back in a heart beat which many others must agree with considering the sheer number of tourists we saw from all corners of the earth. Gracias Espańa

  9. Tipping in Ontario is especially weird now that servers don’t make a “serving wage” anymore (typically it was 1/2 to 2/3rds of minimum wage) but they make a regular minimum wage as of last year. But tipping hasn’t changed at all to reflect that. It also begs the question you mentioned above: who should and who shouldn’t be tipped? If a retail person helps me pick out a bunch of things and assists me for an hour, why should they not be as entitled to a tip as a server who may plop our meals down and then just bring us the bill?

    One of the arguments I often hear is, “if you can’t afford to tip, you can’t afford to eat out” but that’s not fair either because it means that the tip should be a built in cost that should be reflected in the pricing. Otherwise, it’s a choice. Although I spent 9 years working in restaurants – and always, ALWAYS tip 20%+ (even when it isn’t deserved) – I also have challenges with the idea that a tip is now expected. Last year for my husband’s birthday we had a horrible experience with our server but all of the other staff were incredible. It would be great to be able to divvy up the tip so only they got it but I also get that this adds a level of complexity that is untenable.

    A friend recently went to a bakery to pick up a dessert for a dinner. When she went to pay there wasn’t an option for “no tip” just a variety of amounts 15%+. She had to actually choose “other amount” and put $0. She got the stink eye but I think more people are exhausted from all of the tipping changes since the pandemic. You passed me a box that I chose and brought to the cash, why should I tip for that?

    I am seeing more and more establishments eliminate tipping and instead building a good wage/benefits into their pricing. I much prefer this idea vs. the unspoken rules around tipping. I would like to see more of that and I am happy to pay more if the pricing reflects the actual cost.

    To be honest, I have found portions smaller, prices higher and service worse since we started heading back to the restaurants post-lockdown. We currently have about 5 take-out places we frequent for special occasions and because they are small businesses and/or have delivery, I always tip. The food, service and effort is there for me to want to give them a little extra as a way to say thanks. For other places, I just never go back.

    • Right, if the servers are getting regular minimum wage nowadays, it begs the question, do you still need to tip? Or the government should raise the minimum wage more?

      Agree with you that tipping should not be expected. Unfortunately, many places/people now think that’s mandatory. Seems odd to me.


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