The Basics of Tipping  

In professions where tipping (also known as gratuity) is customary, it is a the main way people make their money. The most notable is for bartenders and servers. Their hourly wage is extremely small so when tipping, this means that you have a direct effect on someone's livelihood. 

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Tipping is not Mandatory

Tipping is completely based on discretion so first, you should tip based on the service that you receive and second, on what you can afford to tip. This is more prevalent with those with small budgets. In addition, it is true that kids may not receive the service they deserve as they are percevied with have with having little money to spend.  

 

With that being said, you should not buy something knowing that you can't afford a fair gratuity. For example, if you eat in an expensive restaurant and run-up a $50 - $100 bill, then you need to factor this into your budget.

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What Professionals Get Tipped 

First and foremost there, is no need for a tip if it has been automatically added to the bill; however, this does not occur in most situations. If you are in a generous mood, you can add additional money when you pay the tab. 

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Keep in mind that when tips are paid with a credit card, then this is trackable wages. When tips come in the form of cash, then the discretion of income from tips is the responsibility of the server.

 

Technically, withholding tips collected means that the IRS can levy a penalty for not reporting or underreporting tips in any amount. The penalty amounts to half of the Social Security and Medicare tax that would have been due if the tips had been reported.

 

FYI - According to the US Department of Labor, a tipped employee engages in an occupation in which he or she customarily and regularly receives more than $30 per month in tips. An employer of a tipped employee is only required to pay $2.13 per hour in direct wages.

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Who Do I Tip and How to Tip?  

Below are the common professions where people receive a tip as well as what is customary when tipping:

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-Checking your coat: This is common at weddings and company outings - If you pay for this service then there is no need to tip otherwise, if the tip is usually $1 to $2 per coat.

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-Parking garage and valet attendant. This is similar to tipping when checking a coat. When there is a charge to valet park no tipping is required: however, you are welcome to tip. If there is no charge to park, $2 -$5 is customary depending on your mood. 

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-Barista: A common tip minimum is $1 for drinks that require some skill such as an espresso, and for a straight coffee round to the nearest dollar. 

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-Food delivery: Tipping is not mandatory; however, the general consensus is 15%. 

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-Taxis, Uber and Lyft: Tipping is not mandatory; however, the general consensus is to tip 15% for a long trip and 20% for a shorter trip.

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-Restaurants: Tip the server on the basis of the bill. The standard is 15%; purists will tip 20%. If you are buying a $5 beer from the bartender, a $1 tip is customary.