A national survey of Canadian hospitality operators and professionals indicates 71 per cent of respondents say tipping is important (50 per cent call it very important), 34 per cent prefer a higher base over tips, and 42 per cent remain indifferent as long as overall compensation is fair.
The 2024 Hospitality Tipping Trends Survey was released by Atlas, a leader in hospitality automation and tip management software, in partnership with Angus Reid.
“This survey makes it clear that hospitality workers are calling for fair and more transparent compensation models,” said Afshin Mousavian, CEO and co-founder of Atlas.
“The most important finding is the strong 91 per cent support for greater transparency in tipping processes. Many current systems lack transparency due to the manual effort needed to make this information accessible for employers and employees. With another recent report showing 77 per cent of consumers are happy to tip if the money goes to employees, there’s clear demand for automated, transparent tipping models like those Atlas provides, benefiting both employees and operators.
“Most hospitality workers rely on tips as much as their base wages, so employers who prioritize transparent tipping will likely have an easier time attracting and retaining staff. Given the high turnover in this industry, offering a clear and fair tip distribution system is key. Atlas addresses this need by automating the entire process, making tip distribution seamless and transparent for everyone involved.”
He said governments have largely overlooked support for hospitality, despite pandemic-related setbacks, minimum wage hikes, and rising costs. In provinces where alcohol sales are regulated, government price increases have added yet another burden for hospitality operators.
“Now is the time for proactive measures, such as tax breaks for both employers and employees, to prevent bankruptcies, protect jobs, and help the industry manage economic pressures more sustainably,” he said.
Mousavian said it does seem tougher today for consumers to tip given their stretched household dollars. But context matters.
“Consumers still value tipping in restaurants, yet they’re less inclined to tip for takeout or retail purchases. Clearer distinctions for tipping situations can help consumers feel comfortable and keep their experience positive,” he said.
“Based on our survey, 47 per cent of hospitality workers and employers believe tipping should remain voluntary rather than feel mandatory. Setting reasonable tip percentages and offering customers the ability to adjust can help ensure tipping remains a positive reflection of service quality. When customers feel they’re in control, it becomes a useful indicator for both sides on meeting service expectations.”
Operators Call for Transparent Tipping Policies
According to the survey, 91 per cent of Canadian hospitality operators agree that tipping practices should be made clear and transparent for both employees and customers. Despite this, a surprising 21 per cent of respondents admitted they don’t fully understand how much of a tip actually reaches the intended recipient. These findings indicate a need for more structured policies to bridge the knowledge gap among workers and patrons alike.
The survey reveals that regulatory adjustments are also top of mind. Sixty-six per cent of respondents expressed a preference for tips to be exempt from income and payroll taxes, and 41 per cent of operators want clearer guidelines regarding tipping practices. These changes are viewed as necessary for addressing financial uncertainty within the sector, especially as inflation and living costs rise across Canada.
Rising Living Costs Influence Tipping Behaviours
The impact of inflation and increased living expenses is apparent in tipping trends over recent years. Approximately 39 per cent of operators reported a decrease in tipping over the past two years, highlighting the economic challenges that influence both employees and customers in the hospitality industry. However, tips tend to rise around the holidays, with 50 per cent of respondents noticing an increase in gratuities during this season, and 29 per cent reporting a 10 per cent boost in holiday tips.
For many respondents, tipping remains an essential aspect of the industry’s compensation model. Seventy-one per cent of operators consider tipping important, with 50 per cent calling it very important. Support for tipping as a compensation method is notably higher among older respondents, particularly those aged 55 and up (52 per cent), and is strongest in Ontario, where 57 per cent see tipping as crucial.
Preferences for Voluntary and Quality-Based Tipping
The survey highlights differing views on tipping practices, with 47 per cent of participants advocating for tipping to be a voluntary gesture from the customer. This approach is most favoured in Saskatchewan, where 67 per cent of respondents support voluntary tipping. Additionally, 37 per cent of operators believe tipping should be determined by the quality of service, aligning tips with customer satisfaction and service performance rather than standard expectations.
A trend toward standardized wages over tipping is emerging in Canada’s hospitality sector. Forty-two per cent of survey respondents reported no preference between tipped and non-tipped environments as long as overall compensation is fair. However, 34 per cent favor a no-tip environment with higher base pay, particularly in Quebec, where 58 per cent of operators support this model. Only 25 per cent prefer a work environment with tipping, underscoring a shift toward prioritizing stable wages over variable income through tips.
Holiday Tipping Trends Vary by Region
Tipping practices during the holiday season indicate regional variations. Half of the survey respondents report an increase in holiday tips, with the largest boosts observed in Manitoba (73 per cent). While 45 per cent of operators say holiday tipping remains unchanged, 29 per cent experience a 10 per cent increase, especially in Manitoba (55 per cent), Saskatchewan (33 per cent), and Atlantic Canada (33 per cent).
The survey found that nearly half of respondents (47 per cent) are not fully informed about how their tips are distributed, with the highest lack of awareness reported in Alberta (38 per cent). This data underscores the demand for clear and transparent tipping policies, with 91 per cent of respondents supporting clarity in how tips are allocated to ensure fairness. This sentiment is strongest among respondents aged 55 and older (74 per cent) and those in Saskatchewan (83 per cent), signalling widespread support for transparent policies across demographics and regions.
