Tipping in Canada: How much should you tip at restaurants? - MoneySense (2024)

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We’re fully into patio season—and if you’ve noticed that your restaurant bills have been getting larger, you’re not alone. It’s getting more expensive to dine out for two main reasons: inflation and “tip-flation.”

Sixty-two percent of Canadians say they’ve been asked to leave larger tips in recent years, according to an Angus Reid survey from early 2023. This is what’s known as “tip-flation.” Canadians are accustomed to seeing tipping rates start at around 10%, but if you’ve been handed a payment terminal with suggested tip amounts between 18% and 25%, you’ve seen tip-flation in action.

Two in five Canadians (42%) say that higher tipping costs are keeping them from dining out, according to the Angus Reid poll. But tips are not the only culprit for the growing cost of dining out. Supply chain issues, climate change, labour shortages, rising fuel prices and other factors have resulted in higher food costs across the country, and these costs are being passed on to customers in the form of higher-priced menu items.

Diners are now getting wary of tipping. During the early days of COVID-19, many of us gave more than the usual 10% to 15% tip, in an effort to support struggling restaurant workers. Restaurants Canada, a non-profit association representing the foodservice industry, estimates that 13,000 establishments have closed since March 2020, leaving many Canadians unemployed.

That trend appears to have lingered. The percentage of diners who tip 20% or higher has increased from 8% in 2016 to 21% in 2023, according to the same poll by Angus Reid. Fewer people are tipping low, too. In 2016, 44% of Canadians said they tipped less than 14% at sit-down restaurants, but this year that number has fallen to 23%.

So, many of us were already tipping higher than we did pre-pandemic, and now with eating out getting more expensive, a lot of Canadians are feeling weary and reluctant about tipping even more—now coined “tip fatigue.” So, how much should you tip in Canada, and when should you give a gratuity? Should it be limited to restaurants, or should we tip at fast food restaurants, takeout counters, and coffee shops and cafés, too? To find out, I spoke to customers and industry insiders.

How much should you tip in Canada?

The amount you should tip depends on many factors, including the type of establishment you’re dining in, your budget, the quality of service, your own beliefs towards gratuities, and whether you want to abide by the customary tipping approach in Canada (more on this later).

Matthew Massey, a videographer who lives in Toronto, says he sticks to 10% to 13% tips at sit-down restaurants, unless the server goes above and beyond—in which case he’s willing to tip a bit higher.

Even though he’s noticed that the suggested tip percentages have crept up, Massey tends to tip the same amount as the sales tax on the bill (in Ontario, HST is 13%). Massey grew up in England, which he says influences his approach to tipping. In England, he says, diners usually tip only 10% of their total bill, if they even tip at all.

Massey says he is aware that post-COVID-19, people have been a bit more generous with their tips. He feels “a bit guilty” about not tipping more, and he wonders if a large portion of servers’ income comes from tips in many restaurants.

“From a financial standpoint, it adds much more to the meal when you are tipping on top of a $50 or $60 bill,” Massey says. He says that despite feeling guilty, he can’t afford to go the extra mile because of inflation and the already higher cost of dining out.

What is the minimum wage for servers?

In most provinces, servers are now paid the standard provincial minimum wage (everywhere except Quebec, which is $12 an hour). But it wasn’t always that way—servers used to be paid a tipping wage, where their base earnings were slightly less than minimum wage.

Personally, I tend to tip around 18% to 20% at sit-down restaurants now, as I see dining out as an experience, reserved for weekends and special occasions. Gone are the days when I’d go out for food regularly on a weeknight with friends. I find it too expensive to make it a habit now.

When I tip, I also feel that I’m supporting servers who need to earn a living wage in Toronto—which is $23.15 per hour, according to the Ontario Living Wage Network. The province’s standard minimum wage is currently $15.50 per hour (it will go up to $16.55 in October 2023).

Everyone I talk to seems to have a different approach to tipping. So you might be wondering, is there a rule of thumb or customary tip amount in Canada?

What is the customary tip amount in Canada?

If you received good service, a tip is customary, as it’s widely understood that Canadians tip. In sit-down restaurants, “we’ve always said 15% is the minimum you should consider, and 10% is a bit insulting to the service,” says Lewena Bayer, civility expert and CEO of Civility Experts in Winnipeg.

Bayer says that while tipping practices vary widely around the world, showing your appreciation with extra is meant to be optional. “A lot of the pushback [comes] when people feel they are being told that they have to tip 18%, 20% or even 30%, and there are no alternative options presented on the machine, unless you figure out how to change it yourself,” she says. “People find that a bit offensive.”

Bayer says that many Canadians were especially generous with their tips near the beginning of the pandemic when restaurants and service staff were suffering from the lockdowns. However, she says that in the last several months, everything from mortgage costs to food prices have gone up (thanks, inflation), and if you’re paying $24 for a hamburger and fries instead of $17, you’re already going to tip more due to the cost of food racking up a higher bill.

“I’m not sure that people understand why the rate of the tip has also gone up in addition to the cost of the menu item. It doesn’t make sense in a lot of people’s minds,” Bayer says.

She says it’s still important to reward good service, especially when it’s above and beyond. If you got more than you expected, you were pleasantly surprised, or a server treated you really well, she recommends tipping 20%.

What does bad tipping etiquette look like?

If you feel embarrassed about changing the tip amount on the payment terminal from the suggested 18% or 20% down to 15%, Bayer says not to worry. “You should have some control over the amount you want to give,” she says.

It’s important to be realistic about what you can afford before you decide to dine out. Budget for tax and tip on top of the approximate cost of your meal, she adds. “My parents used to say, if you can’t afford to do it properly, then you should probably eat at home, especially if you’re taking people out.”

And this should really go without saying, but don’t make snide remarks about high tip costs to servers or treat them with hostility, says Bayer. (Hint: don’t throw your cash on the table or say something like “I guess I’m buying your drink afterwards,” she says.)

If you’re dining out as a group, Bayer recommends checking if the gratuity has automatically been applied to your bill (a common restaurant policy for groups of six or more), to avoid double-tipping.

Should you tip on takeout in Canada?

Should you only tip at restaurants, or at cafés and fast food places, too? What about coffee chains like Starbucks and Tim Hortons?

When the machine automatically prompts you to tip for your coffee, “you should be able to leave a loonie or a couple of quarters, whatever you can afford and feel is reasonable, without being judged,” says Bayer. “You shouldn’t have to automatically give 18% on something that you’re walking in and picking up. It doesn’t seem reasonable to me.”

What about delivery people, from pizza delivery to Instacart, Uber Eats, Door Dash and others? Although you already pay a delivery fee and, in the case of food delivery platforms, service fees, these go to the company. With Door Dash and Uber Eats, 100% of the tips go directly to the drivers, who have to cover costs like gas, auto insurance and car maintenance, and possibly even parking.

Why some restaurants have banned tipping

In a surprising turn of events, some restaurant owners have banned tipping, and a few others are avoiding the practice from day one—like Then and Now, an Asian fusion restaurant in Toronto. Since owner-operator Eric Y. Wang launched the business in February 2023, there has been no tip prompt on its point-of-sale machines, and no automatic gratuity on the bill for groups.

Wang says he has been working in the restaurant industry for 12 years, in various positions including dishwasher, bartender and server. Before opening Then and Now, he was a restaurant manager. These experiences have shaped his views of tipping. “The simplest way to say it, really, is that it’s just not fair to ask the guests to pay a portion of the salary that people need in order to thrive in the city, or really anywhere,” Wang says.

He has observed that, at some restaurants, people who work in the kitchen, and even management, make less money than customer-facing servers because of how tips are distributed—that is, servers keep the bulk of tips. Wang says this has contributed to a culture of negativity at some restaurants, because when servers make a mistake, they may face more resentment from their managers or superiors, who earn less than them because of the tip structure.

Wang adds that racial stereotyping can impact a customer’s experience at a restaurant—another reason why he has banned tipping at Then and Now. Tipping is primarily a North American practice, and it’s not common in other countries around the world, he explains: “Over time, servers and bartenders start to collect data and they see somewhat of a trend—when people don’t tip at restaurants, typically they are someone with an accent, a visible minority, perhaps a student or a tourist.” He says that servers may subconsciously judge guests by their appearance and assume that they may not tip, before they even sit down at their table. Without the incentive of a tip, a server might not give the customer their best service.

“I’ve had many instances where servers will say to me: ‘I’m not going to serve that table,’” Wang says. “It’s just not right. It doesn’t matter what they’re tipping as long as people are respectful and not causing any trouble. We should treat everyone equally.”

At Then and Now, servers and staff are paid at least the certified Ontario living wage for the Greater Toronto Area, which is $23.15 per hour, and all also get workplace benefits. Wang says that having a predictable income allows his staff to have proof of employment for rental applications, for example, as well as to experience a greater sense of stability because they aren’t relying on fluctuating tips for their primary source of income.

“One of the biggest challenges is to convince people that even without tips, the service will still be great. When people first hear or read about our concept, they either think servers won’t give good service, or that our prices will be ridiculous,” Wang says. “However, I would never hire someone if I didn’t feel they would give 110% to serve the guests and make sure the hospitality side of things is solid.” Wang also notes that Then and Now’s prices are comparable to those of nearby restaurants.

A few other restaurants have switched to a hospitality-included model, including Richmond Station in Toronto. In 2020, co-owners Ryan Donovan, Carl Heinrich and Hayden Johnson decided to eliminate tipping when they realized that many of their staff didn’t qualify for a “liveable amount” of pandemic-relief subsidies when lockdowns shut down the restaurant, due to having uninsured direct cash-tip-based wages (direct tips are paid directly by the customer to the employee). The Canada emergency wage subsidy (CEWS) was calculated based on eligible weekly earnings, to a maximum of $847 per week, between March 15, 2020, and Nov. 30, 2021.

This decision to change business models wasmade in the interest of employees. Donovan says he was “happy to see how eager customers were to do away with tipping as an obligation on their part.”

Katarina Weltner, service director at Richmond Station, worked as a server in the restaurant before tipping was eliminated. She says the transition to a hospitality-included model has “changed the dynamic tableside” as servers can offer great service not to incentivize higher tips, but because it comes from “a genuine place.”

Where does your tip go?

We tip our servers, so they keep the tips, right? Not necessarily. Often, gratuities go into a “tipping pool,” which are the collections of all restaurant employees’ tips. The idea is that employers distribute tips from the pool among servers, back-of-house staff and kitchen staff.

In Canada, there is some legislation on tipping pools. According to the Employment Standards Act (ESA) in Ontario, for example, “the terms of a tip pool cannot be enforced under the ESA,” meaning there is no firm standard for tip pooling. It goes on to say that “employers do not need the employees’ agreement to make deductions from their tips or other gratuities if the amount will be redistributed as part of a tip pool. Participating in a tip pool could be a condition of employment.”

Wang says he once worked at an establishment where “the entire staff knew the owner had hands in the tips” (meaning that they were taking tips from their servers and other staff). When staff brought their concerns to the Ontario labour board, they were told that their complaints were too hard to prove. (Wang declined to name the establishment.)

The bottom line: Be a good Canadian and tip

Keep in mind that it’s important to budget for dining out, including estimates for your meal, the tip and the tax. Be realistic—how much can you reasonably afford? Many restaurants post their menus online. Read more about how to budget for food costs.

If you feel you’ve had excellent service, great food or a great experience, you could go above 15%. Just don’t feel obligated to tip higher than that every time, even if the server is hovering at your table.

What are your thoughts on tipping, how much to tip in Canada, and when you should tip? Let us know in the comments below.

Read more about budgeting:

• The cost of the average grocery bill in Canada–and how to lower yours
• Can young people afford to live in the city anymore?
• How to make more money in Canada: 6 side hustle ideas
• The 6 best bank accounts for your side hustle