What is a Gratuity?

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  • Written By: Mary McMahon
  • Edited By: Bronwyn Harris
  • Last Modified Date: 06 October 2019
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A gratuity is a small monetary gift given to a service worker in acknowledgment for his or her service. Many people refer to a gratuity as a tip, especially in reference to food service workers. Gratuities show gratefulness and appreciation on the part of the customer, rewarding the employee for hard work and also ensuring excellent service in the future. Typically, the amount of a gratuity is a percentage of the total paid for services; this percentage varies, depending on the quality of the service and the industry.

Food service personnel and people who provide personal services such as haircuts, manicures, massage, and other body care are often offered gratuities. One may also offer a tip to someone who carries luggage or supplies, or to someone who takes care of one's children. In some industries, tips are an important part of overall wages, with staff actively relying on the convention of tipping for good service. In these industries, failure to tip is considered a serious breach of etiquette.


In some regions of the world, gratuities are actually built into bills and tags. In Europe, for example, a bill may be labeled “service compris,” meaning that a tip has already been included. If guests want to tip beyond this, they certainly may do so, although it is not required or expected. In other areas, tipping is not usually built into a bill, unless a party is extremely large; a restaurant may indicate that a service charge will be included for parties over a certain size.

In food service, a gratuity generally ranges between 15-20% of the bill after tax. In other industries, a gratuity may be much smaller, or it may include other forms of compensation such as gifts. If you have a long term relationship with a tattoo artist, hairdresser, or massage therapist, for example, you may offer a yearly gift during the holiday season to show appreciation for your service provider.

Although a gratuity is a kind thing to offer, it is by no means required. Some business owners unfortunately rely on tips to make up for poor wages; this is not your fault as a customer, and you should not feel obligated to tip. As a service worker, be aware that you are usually expected to claim tips on tax paperwork, although few people do so. In some industries, a base tipping rate will be calculated using the amount of goods you sold that year, and you must claim this as a minimum.


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Post 1

If the government would require a decent minimum wage for the service industry then people in the industry wouldn't rely so much on patrons to help pay their bills and provide for their families. So please think: the next time you feel like you are not required to tip, who might not be able to eat that night because of your ignorant and apathetic attitude!

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