Tipping in budapest

It is a tipping culture but not with the expectation and pressure as in the US. It's tipping as it should be. If you got good service, 10% is fine and they will appreciate it. Don't want to tip? They won't hate you.

Taxi and small bills, just round up to what ever you are comfortable with.

It's an appreciated EXTRA, not a requirement. But it is very common.

If there is a service charge on the bill, common in tourist establishments, I leave nothing except for special reasons.

Thank you once again for being so thorough and clear!! We are following the advice you gave on our daily itinerary months ago! And the Reco from you and TTM for Dunacorso, omg!! Delicious!! Thank you.

juliecompaney, glad you are enjoying. But is supposed to rain tonight.

Having dinner at another reco of yours tonight, Rezkakas. It eained, yes, while we were in St Stephens for mass. Incredible to experience Catholic mass in hungarian.

I am so happy you are enjoying. Rain stopped for a dew minutes

Glad you enjoyed Dunacorso! And that you are enjoying Budapest!

We’ve had a great visit to Budapest! Truly appreciated the recommendations on this forum!

Happy it worked out well for you. G-d bless and safe travels.

Every country is different. Some of this is what I believe to be fact from the research that I did, but a little is speculation and I identified the speculation. But if anyone sees mistakes please let me know. I don’t claim to be all knowing on this, but was trying to figure it out for my own knowledge.

General
Tipping is common here. Some were saying it is a recent thing because of American tourists, so I went looking for some history. I found a pre-WWI letter from an English gentleman to his son in which he discussed that tipping was the norm in Hungary. So I don’t think the American tourists are to blame.

I also searched for some information on who the big tippers were. In general, in Europe, it is the Germans that tip the best. Conversations with people I know locally who are in various service industries confirm that is true in Hungary. Americans, not so good. That might be because of the impression going around on US web sites that there is no tipping in Europe.

Amount
Hungarians will tip 5% to 10% as a norm. I found a business survey that showed that to be the case. Closer to 5%, or not at all if there is a Service Fee on the bill.

Service Fees
Most restaurants now have a service fee. The amount will be in the menu and will be shown on the receipt. It’s 10 to 15 percent generally. Hungarian law stipulates that the service fee must go to paying wages; so it does go directly to the staff, but it is not necessarily representative of an increase in income as a tip would be. As such the Service Fees are not “extra” costs, but costs that would otherwise have been rolled into the menu prices.

Now I speculate a bit. In looking at several restaurants bills I see that the VAT is 5% to a certain threshold and then increases to 27%. I also see that the service charge VAT thresholds are calculated independently for the Service Fee and not part of the food and drink VAT thresholds. That means that if instead of rolling the service charge into the menu price, by keeping it separate, that the total VAT charged on the meal will be lower. Lower VAT, more profit and possibly higher wages for the staff, or lower prices to the customer.

Tips
A tip put on the bill when paying with a credit card will go through the cash register and it will be recorded as restaurant income and as such it will be charged VAT. The server will receive less than the tip you gave him. I am not certain, but I suspect that it will be added to the current bill and be above the 5% VAT threshold and will be taxed at 27%. A tip paid in cash is by the nature of the taxation laws not considered income and is not taxed.

A Living Wage
The minimum wage in Hungary is 266,800 ft/month. That is about $730 a month or $4.25 an hour before taxes. The average waiter in Budapest does a bit better and makes about $5/hour. In Budapest the cost of living is 1/3 to ½ that in the US, so $5 in Budapest is $7.5 to $10 an hour in the US. Of course, that doesn’t speak to the definition of “Living Wage”. A typical Hungarian home is 1/3 the size of an American home, most Hungarians don’t own a car, most Hungarians don’t have air-conditioning or a clothes dryer. Healthcare is not free, every worker, even minimum wage workers, pays 17% of his income in a tax to pay for healthcare. That may not be much different than the cost of healthcare for a minimum wage US worker.