info-suisse February-March 2014
Banking / Financial | Switzerland-Canada Comparisons
February 2014

Tips and taxes in Canadian and Swiss Restaurants

(Kurt Schläpfer)
When you eat out in a Toronto restaurant, your bill does not only show the price listed on the menu, but you pay an additional 13% tax and at least 15% tip for the waiter. In Switzerland, however, the tax is included in the menu price and tipping is optional. Which of these two systems is more preferential?

Switzerland

The principle in Swiss restaurants is that what you see on the menu is what you pay on your bill. In fact, there is a "hidden" value-added tax included in the menu price amounting to 8%, which is one of the lowest in the world. Although tipping is clearly optional, there is some debate whether or not a minimum tip should be added. The author of this article remembers those days in Switzerland when tips in restaurants were mandatory. When they were abolished in 1974, the prices on the menu were adapted accordingly. Therefore tips are no longer necessary. But it is very common to round up to a straight sum, which can easily amount to 5% or 10% for smaller sums. In case of larger bills, however, 5% can be considered a good tip.

Canada Since

Since July 2010, the province of Ontario levies the Harmonized Sales Tax (HST) being 13% for food and beverages in restaurants. Unlike in Switzerland, this tax is not included in the menu price and charged separately. Tipping is not mandatory, but Ontario allows employers to pay lower than minimum wages to waiters who, as a consequence, expect to be receiving tips. In Ontario, the minimum wage is $10.25 per hour, which is less than what you pay for a teenage babysitter.

The commonly accepted tip nowadays is between 15 and 20% and higher if you find the service exceptional. An expert says: "Some people tip 25%. I don't know anybody who tips 10% anymore. 15% is the bottom line here."

It is a point of confusion whether the tip should be calculated on the amount before tax or on the total after tax. It would make sense to base the tip on the amount spent before any taxes. However, in restaurants where handheld electronic terminals are used, the tip is added on the total after tax, if you choose the automatic tip percentage.

Some restaurants automatically add 20% gratuity to the bill, whether you were happy with the service or not. Many Ontarians have objected so vehemently to automatic tipping that a Bill under the title "Elimination of Automatic Tips Act" passed in May 2010 on its preliminary reading in the provincial legislature. The Bill prohibits restaurant owners and operators from charging automatic service charges in restaurants, except for private functions or banquets.

In an internet forum the question has been raised: "If I go to a buffet restaurant, how much should I tip? My friends have told me that because this is a kind of "self-serve" restaurant, we can leave whatever amount we like." A typical answer to this question is: "If you want to "do it right," leave 10%. Removing plates and refilling beverages do not call for the 15% to 20% standard that full service calls for."

Comparing Switzerland and Canada: The Author's Opinion

It is certainly convenient to pay a restaurant bill in Switzerland, because there is no need for mental arithmetic. However, if you are used to giving a fixed percentage of gratuity, it is equally easy to settle a restaurant bill in Canada.    



SCCC Corporate Members
  • Rolex Canada Ltd.
  • Zurich Canada
  • Habib Canadian Bank  (Subsidiary of Habib Bank AG Zurich)
  • Custom Spring Corporate
  • Lette LLP
  • Swiss Business Hub
  • Roche Canada
  • Swissmar Ltd.
  • Hilti (Canada) Corporation
  • Endress + Hauser Canada Ltd
  • Switzerland Tourism
  • Adecco Employment Services Limited
  • Glencore
  • Lindt & Spruengli (Canada) Inc.
  • Miller Thomson LLP
  • Chab Agency Inc.