Holiday tipping season: Here’s who and how much you should tip

According to a new survey from Bankrate, this season more U.S. adults anticipate giving an annual tip to the service providers they use compared to last year, with 54% reporting that they’re likely to give higher-than-normal tips around the holidays to service industry employees such as restaurant waitstaff, hair stylists, barbers, bartenders, and food delivery people. 

Who should you tip?

Try to tip anyone who makes your life a little easier. “If you have a regular service provider that helps you throughout the year—perhaps a dedicated housekeeper or a hairstylist you really love—it could be customary to give a holiday tip equal to the cost of one service,” says Bankrate.com senior industry analyst Ted Rossman.

You might consider giving a holiday tip to service workers like your: 

• Daycare provider 
• Housekeeper/cleaner 
• Personal trainer 
• Pet groomer or dog walker 
• Mail carrier 
• Doorman
• Gardener 

How much should you tip?

The right amount will depend on a few different factors, like the service being performed, frequency, the quality of the service, and more. Bankrate reports that the median tip falls between $20 to $50 depending on the service provider but the “right amount” for a holiday tip will ultimately depend on your budget. You never want to stretch your budget thin for the sake of giving a tip. 

Comb through your budget to figure out how much money you have available for tipping and then make a list of all of the service providers you plan to tip. Once you know how many people you’ll need to tip, you can determine if you need to shorten that list or get creative with how you choose to show your appreciation. You might choose to give them a small gift instead of a cash tip, which can be more thoughtful and cost-effective. 

You should also be aware of what kinds of tips each service worker is allowed to accept. Certain professions may have restrictions in place on workers accepting cash gifts, gift cards, or other forms of currency. For example, mail carriers working for the United States Postal Service are only allowed to accept snacks and beverages or perishable gifts that are not part of a meal, and small gifts that are no more than $20 in value.

If you are able to give a tip, etiquette expert Elaine Swann says that using a peer-to-peer payment method is the best way to go when gifting money. 

“According to a recent Zelle consumer behavior study around gifting and tipping, nearly half of consumers (48% to be exact) would prefer to receive money via digital payment instead of cash or check,” says Swann. “Digital payments are about ease—you don’t have to find an ATM to withdraw cash, and you can still keep it personal by adding a thank-you note in the memo field.” 

3 ways to make room in your budget for holiday tips 

Inflation has taken a toll on the average amount of a holiday tip—the median holiday tip has decreased in four out of the six services since last year, with no median tip exceeding $40. 

Still, depending on how many workers you’re tipping, it can add up quickly. 

Ideally, you want to get into the habit of saving for holiday expenses year-round—putting a little bit away each month for the holidays ensures that you don’t have to foot the bill all at once and can comfortably afford to purchase gifts, travel, host and attend holiday events, and tip. However, if your budget is feeling extra tight this year, you might consider the following tips to give yourself more breathing room: 

1. Set a budget before you shop and look for discounts: Before you begin your holiday gift shopping, make a list of each person you plan to purchase a gift for and set a budget for how much you’re able to spend on each person. Avoid impulse splurges and look for ways to cut costs by using credit card points, miles, or cashback to cover your purchases. You can also consider using browser extensions like Honey or Rakuten while online shopping so that you don’t miss out on any coupons or deals on the items you’re purchasing. 
2. Participate in gift exchanges: Taking part in white elephant or Secret Santa gift exchanges can cut down on your holiday costs significantly and make it easier for you to set aside extra money for holiday tips. Whether you’re exchanging gifts with family, friends, or coworkers, consider planning a gift exchange with a larger group, setting a budget for how much each person could spend, and using the money you would’ve put toward gifts for the whole family in your holiday tip fund. 
3. Give a discounted gift card as a holiday tip: Sites like Giftcards.com and Raise sell higher value gift cards at a discount. If the person you’re tipping has a preferred retailer, you may be able to get them a gift card they’ll love for a fraction of the price. 

“Many economic circumstances can affect who and how much you tip, whether inflation or the looming recession,” says Swann. “During the pandemic, we saw individuals tip more if they could. I encourage anyone who can afford to be more generous to continue to give what they can during inflation and a recession to help make up for those who cannot do the same.”