Skip to main content
Select Source:

Gratuity

GRATUITY

Money, also known as a tip, given to one who provides services and added to the cost of the service provided, generally as a reward for the service provided and as a supplement to the service provider's income.

Legend suggests that the term "tip" originated from an innkeeper's sign, "To Insure Promptness." Traditionally, patrons gave gratuity to those providing services in order to ensure faster service. Gratuity has always been defined by local custom and etiquette, never by law. Individuals who work for gratuity include those who provide a wide variety of services, including, for example, waiters and waitresses, bartenders, hotel employees, and cab drivers.

Gratuity is customarily designed to ensure that patrons receive the best service possible. The custom allows service providers to be rewarded for providing good service and lets patrons penalize those who provide poor service. The amount of gratuity depends upon the type of service, though tips are usually determined by the total cost of service provided. Proper etiquette suggests that patrons should tip between ten to twenty percent of the total bill. Without gratuity, service providers may have no incentive to provide a higher level of service than necessary.

The system of tipping has been the subject of extensive commentary and debate. For example, eleanor roosevelt suggested to those Americans traveling in foreign lands, "a fair tip, or one a little on the generous side, will leave a pleasant feeling and respect for you in the one who receives it. A lavish one will create a secret disrespect and add to the reputation Americans have for trying to buy their way into everything." Scholars have focused their attention on many aspects of tipping, including the satisfaction of the patron when he or she leaves a tip for the services provided.

Tips and other forms of gratuity constitute taxable income and must be reported by those who receive them. Although the current federal minimum wage for most employees is $5.15 per hour, this number is reduced to $2.13 per hour for most tipped employees. Since these tipped employees generally receive more than $3 per hour in compensation from gratuity, they seldom receive less than the minimum wage paid to other types of employees. However, if the combined amount of tips and wages comes to less than $5.15 per hour, the employer is required to make up the difference under regulations established by the U.S. labor department. Employees must claim the amount of tips they receive to the employer and must report these amounts when they file their tax returns.

Patrons have, on occasion, brought suit over the practices of service providers of adding gratuity to bills. For example, in Searle v. Wyndham International, Inc., 126 Cal. Rptr. 2d 231 (Cal. App. 2002), patrons of a hotel ordered room service, which included taxes, a seventeen percent service charge, and a room delivery charge. The bill also provided a line whereby the patrons could add gratuity to the bill, even though the service charge was gratuity paid to the server. The patrons sued the hotel, claiming that the practice was deceptive because it did not indicate that the service charge constituted gratuity and that the service charge constituted obligatory gratuity, which the patrons claimed should be voluntary. The court held that the practice was neither deceptive nor fraudulent, holding in favor of the hotel.

further readings

Morgan, Daniel L., and Yale F. Goldberg. 1990. Employees and Independent Contractors. Chicago, IL: Commerce Clearing House.

cross-references

Labor Department; Independent Contractor.

Cite this article
Pick a style below, and copy the text for your bibliography.

  • MLA
  • Chicago
  • APA

"Gratuity." West's Encyclopedia of American Law. . Encyclopedia.com. 22 Jul. 2018 <http://www.encyclopedia.com>.

"Gratuity." West's Encyclopedia of American Law. . Encyclopedia.com. (July 22, 2018). http://www.encyclopedia.com/law/encyclopedias-almanacs-transcripts-and-maps/gratuity

"Gratuity." West's Encyclopedia of American Law. . Retrieved July 22, 2018 from Encyclopedia.com: http://www.encyclopedia.com/law/encyclopedias-almanacs-transcripts-and-maps/gratuity

Learn more about citation styles

Citation styles

Encyclopedia.com gives you the ability to cite reference entries and articles according to common styles from the Modern Language Association (MLA), The Chicago Manual of Style, and the American Psychological Association (APA).

Within the “Cite this article” tool, pick a style to see how all available information looks when formatted according to that style. Then, copy and paste the text into your bibliography or works cited list.

Because each style has its own formatting nuances that evolve over time and not all information is available for every reference entry or article, Encyclopedia.com cannot guarantee each citation it generates. Therefore, it’s best to use Encyclopedia.com citations as a starting point before checking the style against your school or publication’s requirements and the most-recent information available at these sites:

Modern Language Association

http://www.mla.org/style

The Chicago Manual of Style

http://www.chicagomanualofstyle.org/tools_citationguide.html

American Psychological Association

http://apastyle.apa.org/

Notes:
  • Most online reference entries and articles do not have page numbers. Therefore, that information is unavailable for most Encyclopedia.com content. However, the date of retrieval is often important. Refer to each style’s convention regarding the best way to format page numbers and retrieval dates.
  • In addition to the MLA, Chicago, and APA styles, your school, university, publication, or institution may have its own requirements for citations. Therefore, be sure to refer to those guidelines when editing your bibliography or works cited list.

gratuity

gra·tu·i·ty / grəˈt(y)oōitē/ • n. (pl. -ties) money given in return for some service or favor, in particular: ∎ formal a tip given to a waiter, taxicab driver, etc.

Cite this article
Pick a style below, and copy the text for your bibliography.

  • MLA
  • Chicago
  • APA

"gratuity." The Oxford Pocket Dictionary of Current English. . Encyclopedia.com. 22 Jul. 2018 <http://www.encyclopedia.com>.

"gratuity." The Oxford Pocket Dictionary of Current English. . Encyclopedia.com. (July 22, 2018). http://www.encyclopedia.com/humanities/dictionaries-thesauruses-pictures-and-press-releases/gratuity-0

"gratuity." The Oxford Pocket Dictionary of Current English. . Retrieved July 22, 2018 from Encyclopedia.com: http://www.encyclopedia.com/humanities/dictionaries-thesauruses-pictures-and-press-releases/gratuity-0

Learn more about citation styles

Citation styles

Encyclopedia.com gives you the ability to cite reference entries and articles according to common styles from the Modern Language Association (MLA), The Chicago Manual of Style, and the American Psychological Association (APA).

Within the “Cite this article” tool, pick a style to see how all available information looks when formatted according to that style. Then, copy and paste the text into your bibliography or works cited list.

Because each style has its own formatting nuances that evolve over time and not all information is available for every reference entry or article, Encyclopedia.com cannot guarantee each citation it generates. Therefore, it’s best to use Encyclopedia.com citations as a starting point before checking the style against your school or publication’s requirements and the most-recent information available at these sites:

Modern Language Association

http://www.mla.org/style

The Chicago Manual of Style

http://www.chicagomanualofstyle.org/tools_citationguide.html

American Psychological Association

http://apastyle.apa.org/

Notes:
  • Most online reference entries and articles do not have page numbers. Therefore, that information is unavailable for most Encyclopedia.com content. However, the date of retrieval is often important. Refer to each style’s convention regarding the best way to format page numbers and retrieval dates.
  • In addition to the MLA, Chicago, and APA styles, your school, university, publication, or institution may have its own requirements for citations. Therefore, be sure to refer to those guidelines when editing your bibliography or works cited list.

gratuity

gratuity †graciousness, favour; gift, present, XVI. — (O)F. gratuité or medL. grātuitās gift, f. L. grātus; see GRATEFUL, -ITY.
So gratuitous XVII. f. L. grātuītus freely given, spontaneous.

Cite this article
Pick a style below, and copy the text for your bibliography.

  • MLA
  • Chicago
  • APA

"gratuity." The Concise Oxford Dictionary of English Etymology. . Encyclopedia.com. 22 Jul. 2018 <http://www.encyclopedia.com>.

"gratuity." The Concise Oxford Dictionary of English Etymology. . Encyclopedia.com. (July 22, 2018). http://www.encyclopedia.com/humanities/dictionaries-thesauruses-pictures-and-press-releases/gratuity-1

"gratuity." The Concise Oxford Dictionary of English Etymology. . Retrieved July 22, 2018 from Encyclopedia.com: http://www.encyclopedia.com/humanities/dictionaries-thesauruses-pictures-and-press-releases/gratuity-1

Learn more about citation styles

Citation styles

Encyclopedia.com gives you the ability to cite reference entries and articles according to common styles from the Modern Language Association (MLA), The Chicago Manual of Style, and the American Psychological Association (APA).

Within the “Cite this article” tool, pick a style to see how all available information looks when formatted according to that style. Then, copy and paste the text into your bibliography or works cited list.

Because each style has its own formatting nuances that evolve over time and not all information is available for every reference entry or article, Encyclopedia.com cannot guarantee each citation it generates. Therefore, it’s best to use Encyclopedia.com citations as a starting point before checking the style against your school or publication’s requirements and the most-recent information available at these sites:

Modern Language Association

http://www.mla.org/style

The Chicago Manual of Style

http://www.chicagomanualofstyle.org/tools_citationguide.html

American Psychological Association

http://apastyle.apa.org/

Notes:
  • Most online reference entries and articles do not have page numbers. Therefore, that information is unavailable for most Encyclopedia.com content. However, the date of retrieval is often important. Refer to each style’s convention regarding the best way to format page numbers and retrieval dates.
  • In addition to the MLA, Chicago, and APA styles, your school, university, publication, or institution may have its own requirements for citations. Therefore, be sure to refer to those guidelines when editing your bibliography or works cited list.

gratuity

gratuitybanditti, bitty, chitty, city, committee, ditty, gritty, intercity, kitty, nitty-gritty, Pitti, pity, pretty, shitty, slitty, smriti, spitty, titty, vittae, witty •fifty, fifty-fifty, nifty, shifty, swiftie, thrifty •guilty, kiltie, silty •flinty, linty, minty, shinty •ballistae, Christie, Corpus Christi, misty, twisty, wristy •sixty •deity, gaiety (US gayety), laity, simultaneity, spontaneity •contemporaneity, corporeity, femineity, heterogeneity, homogeneity •anxiety, contrariety, dubiety, impiety, impropriety, inebriety, notoriety, piety, satiety, sobriety, ubiety, variety •moiety •acuity, ambiguity, annuity, assiduity, congruity, contiguity, continuity, exiguity, fatuity, fortuity, gratuity, ingenuity, perpetuity, perspicuity, promiscuity, suety, superfluity, tenuity, vacuity •rabbity •improbity, probity •acerbity • witchetty • crotchety •heredity •acidity, acridity, aridity, avidity, cupidity, flaccidity, fluidity, frigidity, humidity, hybridity, insipidity, intrepidity, limpidity, liquidity, lividity, lucidity, morbidity, placidity, putridity, quiddity, rabidity, rancidity, rapidity, rigidity, solidity, stolidity, stupidity, tepidity, timidity, torpidity, torridity, turgidity, validity, vapidity •commodity, oddity •immodesty, modesty •crudity, nudity •fecundity, jocundity, moribundity, profundity, rotundity, rubicundity •absurdity • difficulty • gadgety •majesty • fidgety • rackety •pernickety, rickety •biscuity •banality, duality, fatality, finality, ideality, legality, locality, modality, morality, natality, orality, reality, regality, rurality, tonality, totality, venality, vitality, vocality •fidelity •ability, agility, civility, debility, docility, edibility, facility, fertility, flexility, fragility, futility, gentility, hostility, humility, imbecility, infantility, juvenility, liability, mobility, nihility, nobility, nubility, puerility, senility, servility, stability, sterility, tactility, tranquillity (US tranquility), usability, utility, versatility, viability, virility, volatility •ringlety •equality, frivolity, jollity, polity, quality •credulity, garrulity, sedulity •nullity •amity, calamity •extremity • enmity •anonymity, dimity, equanimity, magnanimity, proximity, pseudonymity, pusillanimity, unanimity •comity •conformity, deformity, enormity, multiformity, uniformity •subcommittee • pepperminty •infirmity •Christianity, humanity, inanity, profanity, sanity, urbanity, vanity •amnesty •lenity, obscenity, serenity •indemnity, solemnity •mundanity • amenity •affinity, asininity, clandestinity, divinity, femininity, infinity, masculinity, salinity, trinity, vicinity, virginity •benignity, dignity, malignity •honesty •community, immunity, importunity, impunity, opportunity, unity •confraternity, eternity, fraternity, maternity, modernity, paternity, taciturnity •serendipity, snippety •uppity •angularity, barbarity, bipolarity, charity, circularity, clarity, complementarity, familiarity, granularity, hilarity, insularity, irregularity, jocularity, linearity, parity, particularity, peculiarity, polarity, popularity, regularity, secularity, similarity, singularity, solidarity, subsidiarity, unitarity, vernacularity, vulgarity •alacrity • sacristy •ambidexterity, asperity, austerity, celerity, dexterity, ferrety, posterity, prosperity, severity, sincerity, temerity, verity •celebrity • integrity • rarity •authority, inferiority, juniority, majority, minority, priority, seniority, sonority, sorority, superiority •mediocrity • sovereignty • salubrity •entirety •futurity, immaturity, impurity, maturity, obscurity, purity, security, surety •touristy •audacity, capacity, fugacity, loquacity, mendacity, opacity, perspicacity, pertinacity, pugnacity, rapacity, sagacity, sequacity, tenacity, veracity, vivacity, voracity •laxity •sparsity, varsity •necessity •complexity, perplexity •density, immensity, propensity, tensity •scarcity • obesity •felicity, toxicity •fixity, prolixity •benedicite, nicety •anfractuosity, animosity, atrocity, bellicosity, curiosity, fabulosity, ferocity, generosity, grandiosity, impecuniosity, impetuosity, jocosity, luminosity, monstrosity, nebulosity, pomposity, ponderosity, porosity, preciosity, precocity, reciprocity, religiosity, scrupulosity, sinuosity, sumptuosity, velocity, verbosity, virtuosity, viscosity •paucity • falsity • caducity • russety •adversity, biodiversity, diversity, perversity, university •sacrosanctity, sanctity •chastity •entity, identity •quantity • certainty •cavity, concavity, depravity, gravity •travesty • suavity •brevity, levity, longevity •velvety • naivety •activity, nativity •equity •antiquity, iniquity, obliquity, ubiquity •propinquity

Cite this article
Pick a style below, and copy the text for your bibliography.

  • MLA
  • Chicago
  • APA

"gratuity." Oxford Dictionary of Rhymes. . Encyclopedia.com. 22 Jul. 2018 <http://www.encyclopedia.com>.

"gratuity." Oxford Dictionary of Rhymes. . Encyclopedia.com. (July 22, 2018). http://www.encyclopedia.com/humanities/dictionaries-thesauruses-pictures-and-press-releases/gratuity

"gratuity." Oxford Dictionary of Rhymes. . Retrieved July 22, 2018 from Encyclopedia.com: http://www.encyclopedia.com/humanities/dictionaries-thesauruses-pictures-and-press-releases/gratuity

Learn more about citation styles

Citation styles

Encyclopedia.com gives you the ability to cite reference entries and articles according to common styles from the Modern Language Association (MLA), The Chicago Manual of Style, and the American Psychological Association (APA).

Within the “Cite this article” tool, pick a style to see how all available information looks when formatted according to that style. Then, copy and paste the text into your bibliography or works cited list.

Because each style has its own formatting nuances that evolve over time and not all information is available for every reference entry or article, Encyclopedia.com cannot guarantee each citation it generates. Therefore, it’s best to use Encyclopedia.com citations as a starting point before checking the style against your school or publication’s requirements and the most-recent information available at these sites:

Modern Language Association

http://www.mla.org/style

The Chicago Manual of Style

http://www.chicagomanualofstyle.org/tools_citationguide.html

American Psychological Association

http://apastyle.apa.org/

Notes:
  • Most online reference entries and articles do not have page numbers. Therefore, that information is unavailable for most Encyclopedia.com content. However, the date of retrieval is often important. Refer to each style’s convention regarding the best way to format page numbers and retrieval dates.
  • In addition to the MLA, Chicago, and APA styles, your school, university, publication, or institution may have its own requirements for citations. Therefore, be sure to refer to those guidelines when editing your bibliography or works cited list.