How Your Tips Impact Incomes
PayScale's 2012-2013 Tipping Study
On average, we find hourly tips have increased approximately 2 percent over last year (2011).
- We provide the Typical Hours, Median Hourly Tips, Median Hourly Base Pay, Typical Total Hourly Income, percent of Total Hourly Income from Tips and Frequency with which workers report being tipped for 61 service jobs.
- Last year we observed a similar market for tipping with approximately a 4 percent increase in amount tipped over the previous year (2010).
- Therefore, on average tipped service jobs have seen two straight years of growth which is a good sign for better times after the recession.
Across the set of jobs, we observe the following:
- The average difference in hourly tips across the jobs is +2%.
- The average difference in hours worked per week across the jobs is ~1%.
- The average difference in base hourly pay is +2%.
Typical Hours: This is the number of hours per week that the typical employee within a given job reports working. They are separated into three categories:
- Full-time: The typical employee with the given job works at least 35 hours a week.
- Part-time: The typical employee with the given job works between 25 and 35 hours a week.
- Limited Time: The typical employee with the given job works less than 25 hours a week.
Note: A typical workweek can vary within a job. For example, while over half of the dog groomers in our system report working more than 36 hours a week, many may still choose to work part-time.
Median Hourly Tips: This is the median wages from tips by the hour for workers reporting tips. Fifty percent of the individuals with the job earn less than this in tips per hour, and 50 percent earn more.
Note: It is important to remember the tips reported are median tips and that it is possible for people to earn more or less than the stated median depending upon several factors such as location of work, type of employer, duties performed, tenure in job, holding a loyal customer base, etc. For example, a hairdresser working at a discount salon such as Supercuts is likely to earn smaller tips per customer than one working at a selective boutique in New York City.
Median Base Hourly Pay: For employees holding a job who report earning tips, this is either the base hourly wage or base salary divided by the typical number of hours worked in a year. An example of the latter would be if a worker earns $24,960 in salary per year and works 2080 hours per year (40 hours a week x 52 weeks a year), then the base hourly pay would be $24,960/2080 = $12.00/hour. The base hourly pay does not include annual bonuses, commissions, profit sharing, equity, or tips.
Typical Total Hourly Income: This is the sum of median hourly tips and median base hourly pay.
Percent of Total Hourly Income from Tips: This is the percentage of typical total hourly income that comes from tips. For example, if you earn $3.00/hour in tips and $12.00/hour in base wages, then your percentage would be $3/($3+$12)=20%. Percentages are rounded to the nearest percent.
Frequency of Tips Reported: We calculate the frequency of tips reported for a given job as a ratio of those with the job who report tips compared to all of those with the job in the PayScale database. We separate the frequency of tips reported into three categories.
- Very Frequently: Nearly everyone doing this job receives tips regularly as part of their income. Examples include taxi drivers and waiters/waitresses, both of which are tipped regularly by customers.
- Frequently: While tipping is a regular feature of this job for many practitioners, there are a significant number for whom tips are not common. For example, a restaurant host/hostess may often receive tips in a customer’s effort to be seated more quickly or in a better location, but they are not tipped by all, or even a majority of, customers.
- Occasionally: Tipping is sometimes a feature of these jobs, but many practitioners do not receive tips regularly. For example, makeup artists who help a bride get ready for her wedding day will often receive a monetary token of gratitude, but makeup artists who help models prepare for a photo shoot will not.