Whether it’s “tipflation,” “tip fatigue” or “tip creep,” most people are uncomfortable with the changing expectations around gratuities, at least in the U.S.
In other countries around the world, tips are smaller — and less problematic.
While customs vary by region, “the U.S. is the most tip-happy country,” said Michael Lynn, a professor of consumer behavior and marketing at the Cornell University School of Hotel Administration.
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“We tip a greater number of service providers than any other country in the world and we tip larger amounts.”
Some U.S. workers rely on tips, some don’t
In most other countries, including throughout Europe, “tipping remains a small gesture of gratitude,” said Jaime Peters, Maryville University’s assistant dean of accounting, finance, and economics. That’s in contrast to the U.S., where “tipping is almost obligatory.”
In part, that’s because tips make up a larger part of workers’ pay in the U.S., particularly in industries like entertainment, food service and leisure and hospitality.
In fact, in some of those jobs, workers make less than minimum wage because they are considered “tipped employees.”
Under federal law, employers can pay workers as little as $2.13 per hour — much less than the minimum wage — if the tips they receive bring them up to a baseline salary. (Some states are now increasing the hourly minimum wage for tipped employees or eliminated tipping wages altogether.)
This applies primarily to restaurant workers, although other employees who receive more than $30 a month in tips may qualify.
“There are people other than servers that are getting a substandard wage but not many, it’s mostly waiters and maybe bartenders,” Lynn said.
For these workers, tips can boost wages by about 25%, according to data from payroll platform Gusto.
“Tips play a significant role in compensation, although it can vary quite a bit,” said Luke Pardue, an economist at Gusto.
Here’s how much people tip around the world
In other countries, that’s not the case. Workers don’t rely on tips for income and therefore a gratuity remains just that, a token of gratitude.
Before heading abroad, Peters advises travelers to research the tipping guidelines and standards at your destination and carry both cash and credit cards so you can tip appropriately.
From Paris to Puerto Vallarta, here’s a look at the tipping expectations in some of the top travel destinations around the world, based on TripAdvisor data pulled for CNBC: