4 ms·

The 'politics' of tipping aside, one thing that really grinds my gears is that they calculate the tip after taxes are applied. I feel that the tips should be ca

The 'politics' of tipping aside, one thing that really grinds my gears is that they calculate the tip after taxes are applied. I feel that the tips should be calculated based on the exchange I had with the establishment/person and that the taxes should considered separate from our interaction. Like, here's the 20% tip on the 100$ I spent. Not, here's the 20% tip on the $100 + 5% tax, $105 total. I know why they do this, it's more money to them, but, to me, it's disingenuous (or they don't realize it being done this way, which may be worse).

Waterluvian 8y ago
It was never like that. They just exploit the digitization of tipping to con you out of a bit more money. Tipping is being fundamentally exploited as a way to make everything look cheaper.
spdionis 8y ago
Isn't the problem the other way around? In Europe taxes are included in the price from the start.
- late2part 8y ago
  That's because the VAT paradigm obscures the taxes; in US and some other places the amount paid is separated into "cost" and "tax."
  - hesk 8y ago
    It's not really obscured. Actual costs and taxes are stated separately on every receipt or invoice. It's just that the advertised price has to include taxes.
    - late2part 8y ago
      Fair point, thanks for clarifying.
      - Symbiote 8y ago
        Example receipt from Sweden: https://upload.wikimedia.org/wikipedia/commons/9/9e/Cash_rounding_receipts.jpg https://upload.wikimedia.org/wikipedia/commons/9/9e/Cash_rou... On the middle one, you can see there are two different tax rates ("MOMS" = VAT), depending on the category of goods. Here's one from Germany: https://upload.wikimedia.org/wikipedia/commons/2/26/Aldi-Quittung-2006.jpg https://upload.wikimedia.org/wikipedia/commons/2/26/Aldi-Qui... It also has two VAT rates (MwSt A and B), and each item is marked according to the rate. The yoghurt and müsli has a lower rate than the soft drinks and electronics.
- nraynaud 8y ago
  Yeah, and for a really capitalistic reason: you can compare a night at the restaurant with a night at the movie to allocate your budget, wheras in the US you have to know the tax on movie tickets, the tax on food (good luck, theses are defined by town), and the tip you will leave. Capitalism only work if both side of the transaction have the same information, that's how Stiglitz got his Nobel prize. (another US trope: collecting the Nobel prizes and never reading the papers)
- adrianmonk 8y ago
  No, those two things are orthogonal. The convention in the US is to compute the tip on the pre-tax amount. If the pre-tax price is $10, a 20% tip is $2 and 8% tax is $0.80, for a total of $12.80. Now, some of this software has come along and tried to sneak in a change to the formula where the tip is computed on the post-tax amount. They take $10, add 8% tax to get $10.80, and then compute 20% of that for the tip, for a total of $12.96. They have deceptively changed the tip rate from 20% to 21.6%. Whether prices are listed tax inclusive or tax exclusive isn't the issue. Even with tax-inclusive pricing like Europe has, it still would have been possible to sneak in a change to the formula for computing the tip.
  - cardiffspaceman 8y ago
    > They have deceptively changed the tip rate from 20% to 21.6%. It's simply a bug. I got a suggested tip amount on a bar bill, the other day and it was clearly derived from the total of all the food and beverage, before taxes. It was all there in writing, and the figures were easy for me to check in my head.
    - Balgair 8y ago
      Oh, with drinks it's even harder to calculate in the US. The 'typical' tip, regardless of (a reasonable) price is $1 flat. For a $3 domestic, that's a ~33% tip. For a $7 microbrew that's ~14% tip. Even with $10 martinis, $1 is 'typical'. Trying to factor that all in to the tip on the bill makes for a heck of a problem, especially after a few drinks!
  - spdionis 8y ago
    I just meant that to simplify literally everything you could just work only in post-tax numbers like the rest of the world does. Obviously this would indeed increase tip amount, but it would definitely decrease confusion and probably fix itself over the long run if the new tip amount was too big.
- tyfon 8y ago
  Also, at least here in Norway, the service workers have to pay taxes on the tips. How does this work in other countries? It it just a way to dodge taxes for the owners? Minimum wage laws also applies to the pre-tip salary so it's not really expected most places unless you get exceptional service. I've never seen "pre-calculated" tips either here or elsewhere in Europe.
  - Symbiote 8y ago
    Some proportion (between 25-75%, I'm not really sure) of restaurants in Britain do this. At the bottom of the menu it says something like "A discretionary service charge of 10% will be added to your bill [for groups of (4|5|6) or more]" Then it ends up like this: https://s3-media3.fl.yelpcdn.com/bphoto/28hfOrBSZ1SYPD--tlNUCg/348s.jpg https://s3-media3.fl.yelpcdn.com/bphoto/28hfOrBSZ1SYPD--tlNU... I don't like it; it makes the prices on the menu appear smaller than a competing restaurant.
mikestew 8y ago
I feel that the tips should be calculated based on the exchange I had with the establishment/person You're free to calculate the tip however you like. Just because some junior programmer took the easy way out to make the math easier doesn't mean you have to along with it. I don't recall a digitized tip screen that didn't let me enter a custom amount.
- Balgair 8y ago
  True, but it is dishonest at best and negligent at worst. The 'error' is in their favor, not the customers. It sends a bad signal that they are willing to 'cheat' you over less than a dollar. What else could they be 'cheating' the customer on?
splonk 8y ago
This is configurable in the point of sale system. In my experience at local places it seems relatively evenly split between pretax and posttax. Not clear if there's a consistent default across all the various POS systems. For example, Square's documentation: https://squareup.com/help/us/en/article/5069-accept-tips-with-the-square-app https://squareup.com/help/us/en/article/5069-accept-tips-wit... >You will need to select if you would like your tips to be added before or after your taxes have been applied to the sale.
sushid 8y ago
If there's anything I've learned through a decade of browsing Reddit, there's nothing to be gained on a discussion revolving around tipping. Feelings will be hurt, people will talk over each other, and no one goes on doing anything different than they did before. Might as well as be debating tabs vs. spaces while we're at it.
- alexozer 8y ago
  I thought it was pretty clear spaces are better?
  - dysan819 8y ago
    I'm not a fan of somewhat opaque spaces and think pretty clear spaces are better as well.
beatgammit 8y ago
Tipping shouldn't be based on a percentage of the bill either, it should be based on the service. If you give me good service, it doesn't matter if I spent $10 or $100, you should be rewarded the same. I have kids, and I know they can be a pain for servers. If they handle my kids well (e.g. sitting us in a booth near a wall is better than a table in the middle of the room) and/or my kids make a mess, I'll leave a bigger tip. If they ignore is for more affluent looking customers, I'll leave a smaller tip. When I bring my kids, I'm not paying a sitter, so that money is up for grabs. My wife and I will often order and give some to the kids instead of them having their own meal (they only pick at it anyway), so basing the tip on the bill isn't a very good way to do it. I also don't like to buy drinks (I don't drink alcohol and I prefer to avoid sugar), so my bill will always be way less than someone who goes all out.

Waterluvian 8y ago

It was never like that. They just exploit the digitization of tipping to con you out of a bit more money. Tipping is being fundamentally exploited as a way to make everything look cheaper.

spdionis 8y ago

Isn't the problem the other way around? In Europe taxes are included in the price from the start.

late2part 8y ago
That's because the VAT paradigm obscures the taxes; in US and some other places the amount paid is separated into "cost" and "tax."
- hesk 8y ago
  It's not really obscured. Actual costs and taxes are stated separately on every receipt or invoice. It's just that the advertised price has to include taxes.
  - late2part 8y ago
    Fair point, thanks for clarifying.
    - Symbiote 8y ago
      Example receipt from Sweden: https://upload.wikimedia.org/wikipedia/commons/9/9e/Cash_rounding_receipts.jpg https://upload.wikimedia.org/wikipedia/commons/9/9e/Cash_rou... On the middle one, you can see there are two different tax rates ("MOMS" = VAT), depending on the category of goods. Here's one from Germany: https://upload.wikimedia.org/wikipedia/commons/2/26/Aldi-Quittung-2006.jpg https://upload.wikimedia.org/wikipedia/commons/2/26/Aldi-Qui... It also has two VAT rates (MwSt A and B), and each item is marked according to the rate. The yoghurt and müsli has a lower rate than the soft drinks and electronics.
nraynaud 8y ago
Yeah, and for a really capitalistic reason: you can compare a night at the restaurant with a night at the movie to allocate your budget, wheras in the US you have to know the tax on movie tickets, the tax on food (good luck, theses are defined by town), and the tip you will leave. Capitalism only work if both side of the transaction have the same information, that's how Stiglitz got his Nobel prize. (another US trope: collecting the Nobel prizes and never reading the papers)
adrianmonk 8y ago
No, those two things are orthogonal. The convention in the US is to compute the tip on the pre-tax amount. If the pre-tax price is $10, a 20% tip is $2 and 8% tax is $0.80, for a total of $12.80. Now, some of this software has come along and tried to sneak in a change to the formula where the tip is computed on the post-tax amount. They take $10, add 8% tax to get $10.80, and then compute 20% of that for the tip, for a total of $12.96. They have deceptively changed the tip rate from 20% to 21.6%. Whether prices are listed tax inclusive or tax exclusive isn't the issue. Even with tax-inclusive pricing like Europe has, it still would have been possible to sneak in a change to the formula for computing the tip.
- cardiffspaceman 8y ago
  > They have deceptively changed the tip rate from 20% to 21.6%. It's simply a bug. I got a suggested tip amount on a bar bill, the other day and it was clearly derived from the total of all the food and beverage, before taxes. It was all there in writing, and the figures were easy for me to check in my head.
  - Balgair 8y ago
    Oh, with drinks it's even harder to calculate in the US. The 'typical' tip, regardless of (a reasonable) price is $1 flat. For a $3 domestic, that's a ~33% tip. For a $7 microbrew that's ~14% tip. Even with $10 martinis, $1 is 'typical'. Trying to factor that all in to the tip on the bill makes for a heck of a problem, especially after a few drinks!
- spdionis 8y ago
  I just meant that to simplify literally everything you could just work only in post-tax numbers like the rest of the world does. Obviously this would indeed increase tip amount, but it would definitely decrease confusion and probably fix itself over the long run if the new tip amount was too big.
tyfon 8y ago
Also, at least here in Norway, the service workers have to pay taxes on the tips. How does this work in other countries? It it just a way to dodge taxes for the owners? Minimum wage laws also applies to the pre-tip salary so it's not really expected most places unless you get exceptional service. I've never seen "pre-calculated" tips either here or elsewhere in Europe.
- Symbiote 8y ago
  Some proportion (between 25-75%, I'm not really sure) of restaurants in Britain do this. At the bottom of the menu it says something like "A discretionary service charge of 10% will be added to your bill [for groups of (4|5|6) or more]" Then it ends up like this: https://s3-media3.fl.yelpcdn.com/bphoto/28hfOrBSZ1SYPD--tlNUCg/348s.jpg https://s3-media3.fl.yelpcdn.com/bphoto/28hfOrBSZ1SYPD--tlNU... I don't like it; it makes the prices on the menu appear smaller than a competing restaurant.

mikestew 8y ago

I feel that the tips should be calculated based on the exchange I had with the establishment/person You're free to calculate the tip however you like. Just because some junior programmer took the easy way out to make the math easier doesn't mean you have to along with it. I don't recall a digitized tip screen that didn't let me enter a custom amount.

Balgair 8y ago
True, but it is dishonest at best and negligent at worst. The 'error' is in their favor, not the customers. It sends a bad signal that they are willing to 'cheat' you over less than a dollar. What else could they be 'cheating' the customer on?

splonk 8y ago

This is configurable in the point of sale system. In my experience at local places it seems relatively evenly split between pretax and posttax. Not clear if there's a consistent default across all the various POS systems. For example, Square's documentation: https://squareup.com/help/us/en/article/5069-accept-tips-with-the-square-app https://squareup.com/help/us/en/article/5069-accept-tips-wit... >You will need to select if you would like your tips to be added before or after your taxes have been applied to the sale.

sushid 8y ago

If there's anything I've learned through a decade of browsing Reddit, there's nothing to be gained on a discussion revolving around tipping. Feelings will be hurt, people will talk over each other, and no one goes on doing anything different than they did before. Might as well as be debating tabs vs. spaces while we're at it.

alexozer 8y ago
I thought it was pretty clear spaces are better?
- dysan819 8y ago
  I'm not a fan of somewhat opaque spaces and think pretty clear spaces are better as well.

beatgammit 8y ago

Tipping shouldn't be based on a percentage of the bill either, it should be based on the service. If you give me good service, it doesn't matter if I spent $10 or $100, you should be rewarded the same. I have kids, and I know they can be a pain for servers. If they handle my kids well (e.g. sitting us in a booth near a wall is better than a table in the middle of the room) and/or my kids make a mess, I'll leave a bigger tip. If they ignore is for more affluent looking customers, I'll leave a smaller tip. When I bring my kids, I'm not paying a sitter, so that money is up for grabs. My wife and I will often order and give some to the kids instead of them having their own meal (they only pick at it anyway), so basing the tip on the bill isn't a very good way to do it. I also don't like to buy drinks (I don't drink alcohol and I prefer to avoid sugar), so my bill will always be way less than someone who goes all out.