Restaurant wine markups and service charges

It’s traditionally been a lot lower in the UK, and in some places people rarely seem to tip or it’s unclear if it’s actually expected.

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Tipping around the world is extremely variable.
Most extreme (IME) is USA were staff rely on tips to make up for low wages, 20% seems to be a ‘normal’. This is closely followed by other Americas regions.
Europe generally is much lower, maybe the regulatory minimum pay effect, but 5% is OK, or more if you’re feeling generous, or just ‘rounding up’. Some countries around Europe tipping is not normal. Others add & indicate a service charge to the bill.

There is definitely a different attitude to tipping in the UK vs the US. I would tip in a restaurant but would not in a cafe where I’d had a cuppa and a sandwich say.

I think 20% for a tip is absolute madness, it is the business’s responsibility to pay their staff and tipping should be discretionary based on level of service.

I am not keen on the insidious addition of an automatic 10/12.5% tip to a bill, I think it is playing on the usual British reticence to complain! I am sure there will be plenty who would happily ask it to be taken from the bill, but more will just shrug and cough up rather than make a fuss.


I’m probably completely wrong about this, but, based on something I read in a previous life, if a service charge is automatically added to the bill, then the subsequent distribution of these “tips”, (assuming that it actually takes place), is classed by HMRC as “income”, and therefore subject to tax.

If, however, I ask for the charge to be removed, and pay the bill nett, then tip directly, in cash, to the waiter / waitress, this can be seen as a gift, and need not be declared as income, even if it goes into a pot for sharing between front of house and kitchen staff.

It’s probably just another urban myth, but most seem more than happy to go along with it.

True / not true?

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I don’t mind the additional 10% added to my bill in the UK, for some reason I bristle a bit when I see 12.5% used but it would have to be poor service for me to remove. I had a couple of instances in Italy this year where service charge was added to the bill and then the waiter hovered expecting an additional tip. At one place the waiter actually explained that the service charge was for the owner and not the staff.


I don’t think that’s correct, or not in the UK at least.
My understanding is that tips given to an individual in cash should be declared by the individual to HMRC. Of course, this is very difficult to administer/enforce. In the past it was common for HMRC to make an adjustment on people’s tax codes to account for notional tips. It was then up to the individual to prove otherwise if they felt it was too high.
If a business collects tips centrally and distributes them to staff in some way, it is acting as a “troncmaster”. It should include them on payslips and deduct tax and NI accordingly. If there is a “tips jar” and one of the staff is responsible for sharing them out amongst fellow staff, then he is acting as “troncmaster” and in theory he or she should operate a payroll system so that tax and NI is collected.
Of course in the real world, employees and businesses can, unwittingly or otherwise, fall foul of the requirements.
HMRC investigations are common in the hospitality industry and can be very financially penal on wrongdoers with arrears, interest and penalties.


I find it hard to understand the US concept, expectation of tipping regardless. I have a nephew who is employed as front of house, that is checks the bookings and calls a waiter to take customer to their table. He reckons $400 a night in tips and $700 on a good Saturday.
Contrast that to a neice in the UK, started work at 15 in a chain pub/restaurant, £3.50 an hour, waits on table, cleans tables, sweeps floors. If she is tipped, she is expected to put that into a “kitty”. What angers me about that is that at 15, there is no NI, so no pension contribution, sick pay, holiday pay etc. The back of house staff are salaried, have a company pension etc yet get the lions share of tip.
Even worse, I have been out with family members who disagree with tipping and have removed my tip from the table as we left. I don’t eat out with them any more.


I was going say that’s it’s only when you travel abroad that you realise that the UK is full of tight people, but I don’t think one does. It’s not just food, it’s everything.

You know the price of wine in the restaurant before you go. If you don’t like it, go to a popular McDonald’s where you’ll receive exactly what those type of people want to pay for. That’s one of the reasons McDonald’s is so successful. You also know, for the past century, that tipping in restaurants is pretty much expected and you know the amount.

Checking how much the raw materials cost from what was an evenings entertainment is pathetic. Do you go to the cinema and come out thinking was it worth watching based on how much it cost to be made?

Nothing personal here or aimed at any personal post, it’s just one of those subjects that grates on me. Restaurants are ran by very hard working people and the margins are small. I thought COVID would have brought to light that they’re not a public service and like pubs, can disappear quite easy.


Ireland brought in some new laws around tipping recently after a few unscrupulous restaurants were pocketing the tips - all tips have to be accounted for and be fully transparent and be evenly distributed amogst the staff, I’m not sure how it works if one waiter is really excellent and receives a large tip as a result but at least the owners can no longer trouser the benefit.

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Tony Turnbull in the Times recently offered the best advice on this. He always takes some cash with him to a restaurant. When the bill, and service charge, arrives he asks the waiter if they will receive the service charge. If the answer is yes then he pays on credit card. If no then pays the bill, minus service charge, on credit card and gives the waiter a cash tip of 10 - 15 %


In London it would seem that 12.5% charge is normal and printed on menus.
In a lot of other cities it’s discretionary amount to pay

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In USA- different in Britain.In USA if is not really a tip, but the customer’s estimation of the value of the service provided by the serving staff. In UK serving staff have a sslary aimed at being ‘right’ for the job, and a tip is a bonus to say an extra thank you. And in different establishments in Britain tips are dealt with in different ways, some places shared between all staff (in what proportion I don’t know), and in others not. Because customs are for wages to be right for the job and factored into the cost of the food or service, we do not have a tipping culture. That of course is not saying that all establishments in Britain pay the decent wage that they should.

N.B. This may be one reason why restaurant food in USA is often reported as seeming cheap to British people.

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Not necessarily, this was a spur of the moment impulsive booking for a newly opened restaurant.

I think the problem is knowing what the service charge actually encompasses.

In some instances it might all go to staff, and if distributed equitably it would probably be better than tipping individuals as those who are not directly customer facing probably don’t benefit from cash tips.

In others cases I’d imagine some of the service charge would go to staff, some to the owner of the business to offset legitimate operational costs.

Or should we be tipping in addition to paying a service charge?

Some places only routinely apply service charges to larger groups/parties.

I tend to agree but as you say if you know roughly what’s on the wine menu, and have sampled some of those in the past you can also (rather than go to a burger joint) make a judgement call personally on whether you’re prepared to pay the menu prices or go for something more modest or not at all.

I enjoyed the wine, and this question partly arose as I was trying to see if I could source some locally, and that’s when it dawned on me the markup was probably more than I see normally.

Hope that makes some kind of sense!

The way I look at it is that I am not just paying for the wine, but there is a choice of wine, also it being available then when I choose to drink it, it’s the right temperature and it will be served in glasses that I won’t have to wash up. All of that isn’t free to provide so it’s reasonable to expect to pay for it.


Drinking a wine and then trawling the internet to find the lowest price available, presents a problem in itself. There’s shipping costs, storage costs, you don’t know who you’re buying from, where it’s been and the simple fact is that restaurants don’t have some bloke sat on a computer finding the cheapest box of 6 wines to be delivered at their leisure.

I’m a photographer. I sometimes get things printed. I charge the client. It would be like the client then ringing up and questioning why I charged so much for a print when they’ve seen prices on the internet. My time ordering, arranging, sending image, receiving image, checking it, dealing with print issues, finding the printer in the first place, the pro quality, the list goes on. Used to be the same with film purchases.

Looking at your wine, it looks to be around £22 (ish). If I was in a restaurant, I’d be looking to pay about £50-£70. Hence my comment about you know how much wine is.

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Other than ensuring the meal is within your budget/what you are prepared to spend for the enjoyment, there is no point thinking about any aspect of the cost of the food or drink: if cost is the key factor then it is much cheaper to eat at home. If I go out for a meal, other than when there is no real option such as can happen on holiday, then I simply choose somewhere where the budget is within what I am prepared to spend which could be tens or hundreds of pounds, and as long as I get the quality food and drink and service commensurate with the amount I am paying then I have a good time and don’t think further about it, just like going to a concert, or theatre, or out with friends for a drink or anything else.


Good points about lots of hidden costs

I only knew after the event what this particular one might cost as I was trying to see where it was stocked and that divulged the price.

If I couldn’t afford to occasionally splash out £99 on a bottle I wouldn’t have, some would find that an obscene amount to pay (friends I was having a quick beer with a few hours before posting for example), but to others it would be an inconsequential cost and probably regarded as fairly cheap.

So in essence the markup is irrelevant if that was the price level I was comfortable with for that specific occasion without seeing the wine menu beforehand.

I think the £50-70 you suggest would have been more reasonable but it cost more and I was prepared to pay for it. (Well actually Mrs AC did on this occasion as I only had my phone with me, and the cards I might have used I’ve not added to Apple Wallet :grin:).

What I found interesting was that the waiter’s initial recommendation had a far lower markup, hence my comment maybe I should have asked him what to get next as he was probably pointing to value for money. That said even the best vfm wine would be useless if it was a style you didn’t enjoy.

It just struck me (maybe it’s the hidden costs the Count alluded to) that there may have been several quite similar items in terms of the price I could procure them as a consumer which had strikingly different costs on the wine list.

Maybe I’m just a pleb :thinking: