Food and service tips are calculated on the pre-tax total of the bill. A standard tip for sit-down service is 15-20%.
If service is so bad you would not offer a standard tip, consider speaking with the manager and explain why. A business owner deserves to know how they can improve their business. Be sure to complain effectively using diplomacy; causing a scene during a business lunch will not leave a good impression with clients or co-workers.
Before you skimp on the tip, ask yourself why?
Wait staff (employees that take your order and serve your food at the table) are almost universally paid substantially less per hour than minimum wage and rely on tips for income.
In some states, like Georgia, the wait-staff minimum wage is as low as $2.13 an hour (in other states, like, New York, it is now $7.00 per hour). Federal law does require that if the direct wage (hourly rate paid by the employer) plus the tips received is not at least equal to the federal minimum wage for each hour worked, the employer must make up the difference. While this may sound like wait staff are still guaranteed minimum wage no matter what their tips are they do not always get to keep their earnings and still end up making less.
For example, wait staff may also have to pay fees such as “silverware” fees (a stipend for using wrapped silverware), uniform maintenance, and may even have to work extra hours opening or closing the store where they cannot earn tips but are not paid minimum wage.
In addition to being paid less, wait staff may have to share their tips with bus staff (employees that clear tables), kitchen staff, or hosts (employees who greet you at the door) and other employees that are paid at least minimum wage.
Wait staff pay taxes on tips, which arguably is not a taxable wage, but by definition is a voluntary gratuity, meaning money that is passed from one person to another without obligation.
