gratuities

Gratuity is a monetary gift given to service workers to acknowledge satisfactory or exceptional service. It is usually voluntary and provided in addition to the stated price of goods or services. Gratuities can be cash or digital and may be given directly to the worker or included on a bill.

Common settings for gratuities include restaurants and bars, hotels, hair and beauty services, taxis, tour guides, and delivery drivers. Some establishments automatically add a service charge to the bill, while in other places tipping remains discretionary. Cultural expectations and legal rules surrounding gratuities vary by country and business policy.

How gratuities are handled depends on policy and local law. Tips are typically intended for the individuals who provide the service. In many jurisdictions, tip income is taxable and may be pooled or distributed according to a company policy. Automatic service charges are usually treated as revenue for the business, though distribution to staff depends on local rules and practice.

Arguments in favor of gratuities include providing wage supplements for low-paid workers and rewarding good service. Critics note that tipping can create income instability, bias, and inconsistent earnings. Some employers shift toward transparent service charges or higher base wages to reduce reliance on tips, while others rely on tipping as a core part of compensation. Digital payments have also changed tipping patterns.

Global variation is wide. In the United States tipping is common and regulated; in many European countries a service charge or higher wages reduce the need for tipping; in Japan tipping is unusual and often discouraged. In some developing economies gratuities are an important, informal source of income for service workers.