Do Servers Prefer Credit or Cash Tips?

You've probably answered this before, but if you did, I didn't see it. Can you tell me if waiters and waitresses, especially at the fancy restaurants, prefer the be tipped in cash or on a credit card? And has the new no-tax-on-tips policy changed the preference at all?

Yes, we've answered this question in the past, but not for a few years.

Based on our own experience, plus the many servers we've known over the years, the answer to this question is overwhelmingly: cash.

First, that money is available to servers at the end of their shifts at the latest. With credit tips, they usually have to wait to receive them on their next paycheck, which takes up to two weeks.

Also, of course, every penny of a server's tips paid via a credit card is reported to the IRS, while there's much less of a paper trail with cash when it comes to paying income tax on tips. Not that we're suggesting people in tip positions underreport their cash gratuities -- oh no no no. In the past, the IRS clamped down hard on cash tips in various ways, but lately, cash has become the exception rather than the rule. We've seen estimates as low as 5% of restaurant tips that are now left in cash, so what even 10-15 years ago was a major concern for the IRS is much less so now.

The new wrinkle, as you mention in the question, is that cash tips won't be taxed up to $25,000 (from tipped taxpayers federal income tax for the years 2025–2028, provided they earn less than $160,000 annually, adjusted for inflation), which makes an even stronger argument on the cash side of the ledger. We addressed this in a recent QoD.

A third concern with tips left on cards is the fee, generally 2%-3%, that the credit-card company charges the restaurant to process electronic payments and that includes tips. Some restaurants pass along this fee to the servers to cover the extra cost, so $1,000 in gratuities, say, for the pay period is reduced by $20-$30.

On the other side of the question are two main issues. One is that wait people at more and more restaurants now pool their tips, which can create a lot of ill will among them. No doubt some servers don't turn in all their cash tips, which shortchanges the other servers (and of course has tax implications). Tips on credit cards can't be disputed like cash tips can.

Two, if servers are trying to document more income, for example to qualify for a car loan or mortgage, that's easier to do when tips are reported/included on paychecks.

Otherwise, cash is still king with waiters and waitresses.

All that said, if you're still not sure of what to do, you can always ask. There's no way to tell what your waiter or waitress' situation is and by asking, you'll find out straight from the server's mouth. We've found that servers always appreciate being asked.

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Comments

VegasVic Oct-04-2025

Depends

I always pay the bill with a card.  And then the tip as well. Usually.  But if I've received outstanding service above and beyond I'll tip in cash, handing it directly to the server and telling him/her what a great job they did.

Kevin Rough Oct-04-2025

Credit card tips count for the new law

It is my understanding that tips left on a credit card still count as cash tips for the tax exclusion.  It is non-cash tips (ie. bitcoin, baseball tickets, etc.) that won't count.

[email protected] Oct-04-2025

Cash tip

I always always tip cash. Everywhere. Not just in Vegas.

Randall Ward Oct-04-2025

tips

cash, sometimes I'll explain because I charge to the room and comps don't cover tips

Edso Oct-04-2025

It Varies

Whether I tip in cash or on the card varies depending on the location and whether I know that the server prefers their tip one way or another.  When I go to Marilyn's Cafe at the Tuscany, I usually have the same waiter and he prefers his tip in cash, but when I go to Olive Garden or another chain restaurant where I get different servers, I put the tip on the card.

Llew Oct-04-2025

Always cash!

As a former server, I can say that I always preferred cash.

O2bnVegas Oct-04-2025

cash even on room charge

I always tip in cash. 

If paying by credit card, even for room charge, the ticket/bill is brought back to me in the check card holder for signature.  I sign the bill, write "cash" on the line for gratuity, enter the total for the food charge, and put the cash tip inside the check card holder.

Candy

Donzack Oct-04-2025

Cash

I remember paying for a meal in a casino restaurant 13 years ago. I thought it took longer than  normal to perform the transaction. The next day the bank called me to see if I bought gasoline in California. I was still in Chicago. I always pay with cash anytime I can.

John Dulley Oct-04-2025

Part of the 5%

I worked 15 years in restaurants  and never heard  of a server being asked how they’d like their tip. In Vegas Im mostly all cash in purchases and try to do the same at restaurants in my hometown. Guess im part of that 5%..

Peter Bijlsma Oct-04-2025

Tips in cash

At the Market Place buffet at the Rampart in Summerlin if the customer pays the tip in advance the servers take the receipt to the cash register and receive the tip in cash, regardless of the payment method.

sunny78 Oct-04-2025

no tax on tips

As pointed out in the QOD answer......

"No doubt some servers don't turn in all their cash tips"

"Tips on credit cards can't be disputed like cash tips can."

With no tax on tips signed into law, these points are mute as tips aren't taxable anymore for the vast majority of waiters I'd guess. So cash or credit card tips, doesn't matter, who cares?

Tim Soldan Oct-05-2025

No tips at Venetian Theater?

My wife bought me a beer at the Ringo Starr concert and asked the bartender about putting the tip on her card. He told her it didn't matter as they didn't get their tips. I thought I could hear Sheldon Adelson rolling over in his grave.

Question of the Day - 04 October 2025

Comments