Americans are tipping less

After reaching a recent peak, tipping at US restaurants is on its way back down the mountain.

• The average tip at full-service restaurants sits around 19.3%, according to restaurant POS system operator Toast (aka the maker of the flippy iPads coffee shop-goers have learned to dislike), down from a six-year peak of 19.9% in early 2021.
• ~38% of Americans reported tipping restaurant servers 20% or more in 2024, according to a survey released last fall. That’s down from 56% in 2021.

Visits and sales are also lower. Restaurant traffic fell from 2023 to 2024 – a year that saw restaurant chains and operators declare the most bankruptcies in decades (outside of 2020), including Red Lobster, TGI Fridays, and Bucca di Beppo.

Less tips, less restaurants, less work. Waiters, bartenders, cooks, and other restaurant workers averaged less time working per week last year than 2023, according to federal data.

👀 Looking ahead…Many worker advocacy groups are pushing for a change to the tipped-wage system, in which many states allow restaurants to pay tip-earning workers less than minimum wage – so long as income from tips makes up the difference.

New York-based One Fair Wage, one of these groups, has successfully gotten measures passed in D.C. and Chicago that phases out the subminimum wage for tipped workers. It plans to push similar measures this year in New York, Illinois, Ohio, Arizona, and Maryland.