Tip jar

How much to tip in the UK: service charge guide

Tony Naylor delves into the murky world of the service charge. Who gets what? Is it fair? And how do we make it better?

Restaurants spend a lot of time and money creating the illusion that their hospitality is freely given; that they’re hosts and we’re welcome guests. Within this cocoon of pleasure, this warm amber womb of alcohol and expert lighting, nothing is too much trouble. The real world – harsh, selfish, stressful – fades. We’re at peace here. Until I ruin it at the end of the meal by asking: “If I leave a tip on my card, do you get it all? Or would you prefer cash?”

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I do so because on an almost monthly basis another news story emerges of a famous restaurant withholding – where they have been paid by credit card rather than in cash – tips or service charges from their staff. Like many of the dining public, I find that highly unpalatable.

I always ask the cash question discreetly and, generally, waiters appreciate it. But it’s an awkward end to the meal. The spell is broken, you’re no longer a guest, this is now a financial transaction, and one with an ugly backstory. With one simple question I’m highlighting the poor pay in restaurants, how restaurants rip-off their staff, and that my tip is potentially crucial to that waiter’s welfare. Which rather takes the shine off the experience, doesn’t it?

It shouldn’t be down to we diners (do you leave £10, 20% or loose change; did you remember to go to the cashpoint?), to ameliorate restaurants’ low-wages. It’s demeaning for staff that their income hinges on the whims of diners and therefore fluctuates constantly. Beyond that basic principle, moreover, the opaque tipping system is unfair in almost every detail.

Let’s assume I leave a cash tip. Does the waiter pocket that? Or, as I would prefer, do they add it to the collective tip pool? If so, how are those pooled tips distributed? Front-of-house staff get the bulk (say, 70%), while everyone from the pot-washers to the cleaners (memo: clean plates and fragrant toilets are important, I find), might divvy up 30%. Is that fair? Among front-of-house staff, the managers and long-serving employees often get a far larger slice of the tips than new floor staff on minimum wage. People who played no direct role in your evening may take home more of your tip than your charming waiter.

It’s a minefield, a mess, and that’s in the best case scenario where you do leave cash. When it comes to tips and discretionary service charges paid on credit cards, things get far murkier. Astonishingly, restaurants are under no obligation to hand that money over to staff, and many don’t. From high-street chains to Michelin-star restaurants, the last few years have seen a stream of venues exposed (often by the Unite or GMB unions) for pocketing the service charge or, before they distribute it to staff, making endless deductions (for admin and bank charges, breakages etc.), in an attempt to claw it back. There are even systems where waiters effectively pay rent on the tables they serve.

You pay a service charge on the assumption it goes to the staff. Often the restaurant swipes it in ways that range from dubious to outrageous. Despite public anger, restaurateurs make endless excuses. They complain about the cost of processing credit card tips and distributing service charge through their payroll. Some claim they retain service charge receipts to reinvest in the business. Others insist transparency is the issue. Be open, they claim, and the public will accept deductions. Rubbish! This isn’t about transparency. It’s about basic (un)fairness.

In a series of consultation papers and non-binding recommendations the government has repeatedly ticked restaurants off. It expects all tips to go directly to staff. But it has done nothing to enforce that. Consequently, I’m left asking questions every time I pay a restaurant bill.

The solution? It’s time to ban tips/service charges and, therefore, any chance of such underhand dealing. It’s time to follow the example of enlightened venues, most notably the Gallivant in Sussex, who accept that, in order to recruit dedicated staff, they must pay decent wages – rather than using tips as an incentive.

We diners are key in this. It’s undeniable that restaurateurs operate on tight profit margins and, if honestly distributed, tips and service charges have been a cost-effective way for restaurant owners to top-up wages. Scrap this and wages and running costs will go up. Menu prices will have to rise accordingly. If we care about waiting staff, diners must accept higher prices. We must support those restaurants that pay real wages (Living Wage Foundation rates and above).

It’ll take several years, but this feels like the beginning of the end for tips, service charges and the low-wage exploitation which they provide cover for. That end can’t come soon enough.


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Image credit: Getty