Spending

45% of Americans plan to give 'a little extra' for year-end tips: 5 workers who may get more than usual

"A lot of times they're underappreciated and underpaid."

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Nearly half, 45%, of Americans say they plan to give bigger-than-normal tips this December to service workers who typically receive gratuities, according to a recent survey from CreditCards.com.

"It's a nice gesture around the holidays to give them a little extra," says Ted Rossman, senior analyst at CreditCards.com. "Maybe you normally tip 15% or 20%, but maybe you bump that up around the holidays."

More than a quarter, 27%, of people polled say they would give extra tips to restaurant waitstaff, for example. Nearly 1 in 5, 19%, plan to give their hairstylists a little extra this holiday season.

That advice to be generous extends beyond folks you might not normally tip, like housekeepers or landscapers, Rossman says. "It's a nice thing around the holidays, if you can, to tip these hard-working people who help us throughout the year. A lot of times they're underappreciated and underpaid," he says.

Nearly half, 47%, of people plan to give their housekeepers an end-of-year tip, for example.

Service workers often rely on tips as part of their compensation structure

For those who could afford to do it, leaving generous tips for service workers became more common at the beginning of the pandemic when lockdown orders made restaurants, retailers, and other businesses shut their doors. However, by summer of this year, tipping habits had dipped back down, according to a survey by CreditsCard.com from June.

"There was this kind of optimism that like, 'Oh, yeah, people will tip better" now, Rossman says. But it turned out that "people had not really upped their tipping game" once the initial shock of the pandemic's first year wore off.

He points out, however, that for many people who provide in-person services, like restaurant workers and hairdressers, tips are actually built into the formula for their compensation. The federal minimum hourly wage is $7.25 for most workers, but for a lot of tipped workers, many who are in food service, it's only $2.13. For these folks, tips aren't a nice bonus for providing great service; they constitute a big part of their final paycheck, and patrons shouldn't think of them as optional, etiquette experts say.

VIDEO5:5205:52
Mister Manners provides tips for proper gift-giving etiquette

Video by Courtney Stith

'Tips are very subjective'

Even for people who provide a service but don't normally rely on regular tips, the end-of-year gratuity is still a nice thing to do, says Jodi Smith, an etiquette expert and founder of consulting firm Mannersmith.

"The people that we tip are people who tend to be lower in organizational hierarchies, who are paid hourly. Some might not even be paid minimum wage," Smith says. So, "when we get to the end of the year, especially if you are somebody who is on solid financial footing, please be generous. There is never a time that I will ever tell you not to be generous with tipping."

If you regularly tip between 15% and 20% at a restaurant, consider bumping it up a bit, for example. For people who provide a service, like a haircut, common wisdom says that your end-of-year gratuity might be the cost of one service.

If you are somebody who is on solid financial footing, please be generous. There is never a time that I will ever tell you not to be generous with tipping.
Jodi Smith
Etiquette expert

But the guidelines change the further outside the box you think. For a regular babysitter, for example, Smith recommends two nights' pay. For garbage collectors, she suggests $20 a person.

If you live in an apartment, it could be appropriate to give your building's superintendent between $50 and $300, she says. (But check with your neighbors, the management company, or your homeowners association handbook to make sure that's permitted.)

"Keep in mind that tips are very subjective. Tips are dependent on your relationship with the individual and the norms for your area, as well as your budget," Smith says. But, when you do tip, the money "should be crisp, new bills placed in an envelope with a card or note of appreciation."

However, if you want to go the extra mile, Smith suggests you tally up how much you spent on the service during the course of the year and make your end-of-year tip 10% to 15% of that total amount. That way, it's more of an end-of-year bonus than an extra large tip.

White-collar "bonuses tend to work on a 10% to 15% bonus structure," Smith says. Carrying that over to the workers who provide you personal services is a nice touch.

For some people, gifts might be smarter than a tip

If you're thinking about giving an end-of-year gratuity to someone who doesn't normally receive tips, double check before you stuff an envelope with cash. Generosity at the holidays is great, but etiquette experts say there are some people it's inappropriate to tip. In some cases it might feel unseemly; in others, depending on the amount, you might be running afoul of regulations.

More than a quarter, 27%, of people surveyed by CreditCards.com plan on giving their mail carrier a holiday gift, but postal workers are prohibited by federal statute from accepting anything that's worth more than $20 on a single occasion, like Christmas.

Teachers should also not receive cash gifts, because it might be perceived as cheapening the value of their instruction, Smith says. Gifts and gift cards are fine, but don't give teachers cash, etiquette experts have previously told Grow. If you really want to go the extra mile, coordinate with the parents of other students and go in on a big, group gift, she suggests.

Other professionals who might find it awkward to receive an end-of-year, cash gift could include specialized professionals who run their own small businesses, from doctors and accountants to skilled tradesmen like electricians or plumbers.

If you would typically give the person a cash tip, cash at the end of the year is fine. If not, then maybe think of another way to show your appreciation, etiquette expert Thomas Farley (aka Mr. Manners) previously told Grow.

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