Tipping has become so common, and so costly, that the average Canadian millennial will spend nearly two years of their wages covering its costs, according to numbers crunched by startup Lendful Financial.
The online lending platform estimates that the average millennial will spend $76,627 on tips over the course of 30 years. The average after-tax income in Canada is around $41,000.
“A gratuity is supposed to be a gift on top of the bill, but really what it has become is an extra tax on the service received, and one that continues to rise disproportionately to inflation,” Lendful CEO and co-founder Alex Benjamin said.
“Tipping norms in Canada have gone from a generous 10 to 15 per cent to now 18, and even 20 per cent in many markets, and in the process, the custom is starting to have a substantial impact on the financial futures of Canadians.”
Tipping may be having an outsized impact on the lowest earners. A poll Lendful carried out found that more than a quarter of people who earn $20,000 or less per year tip between 15 and 20 per cent. One-sixth of respondents tip 20 per cent, “regardless of income,” Lendful said.
As tipping has become more expensive over the years, it has also become more controversial. Some argue that it’s unfair for servers to depend on the whim of customers for their income. They suggest abolishing tips and raising wages for servers. They note that tipping is unheard of in some countries, such as Australia.
Some restaurants, particularly in the U.S., have started making the move to ban tipping. Those who have mostly said they have seen little impact from the move, but others have complained of high turnover among staff since tipping was ended.
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