Originally Posted by
Bishope2
As far as I know, across most of the United States, tips are the main source of income for waitstaff. For the most part, waitstaff are paid well under minimum wage. In some cases, $2.00/hour. Thus, the reason for a 15% to 20% tip. I usually start at 20% and work down. Most say only tip on the product served and do not include the tax. I tip on the total bill because at that point, your only talking a few dollars. (re: Bill without taxes, $100. Total with taxes, $108. Tipping at 20% on $100, tip is $20. Tipping at 20% on $108, tip is $21.60). Not much of a difference.
It is a state by state issue. Some states do not allow tipped credit, some do.
Hawaii, for example only allows a tip credit of $0.25, therefore the the state minimum wage for tipped employees is $7.00. In CA the minimum wage for tipped employees is $8.00. That is above the federal minimum wage of $7.25.
You can see what each state does in the linked table below.
Minimum Wages for Tipped Employees