Americans Adapt Tipping Trends, South Carolina Leads with 20.71%

A recent report highlights the evolving landscape of tipping in the United States, revealing that while many Americans experience what has been termed “tip fatigue,” they continue to leave gratuities for various services. An analysis of over 89,000 transactions across the nation shows significant differences in tipping practices between states, with South Carolina emerging as the leader, boasting an average tip rate of 20.71%.

The national average tip percentage stands at 15.46%, which falls within the familiar 15-20% range that many patrons adhere to. Despite growing discomfort with tipping culture, a substantial number of individuals still provide gratuities, reflecting both social norms and economic realities. The report, conducted by JIM, an AI-driven financial platform for small businesses, analyzed transactions from 6,214 active merchants across 177 business categories throughout the year 2025.

State-by-State Variations in Tipping Behavior

Following South Carolina in the tipping hierarchy are Wisconsin at 19.15%, Connecticut at 18.43%, Maryland at 18.40%, and Nevada at 16.88%. In contrast, Oregon ranks lowest with an average tip percentage of 13.10%. Virginia, New York, Alaska, and Illinois follow closely behind, all registering below 15%.

According to Ricardo Cici, Chief Growth Officer at CloudWalk, the findings indicate a shift in where tipping occurs and its economic implications. “Tipping behavior is evolving, but one thing is consistent: Americans still gravitate toward the 15% to 20% standard, regardless of industry,” Cici stated. He emphasized that a notable portion of tip dollars is now flowing into higher-value services beyond the traditional restaurant setting, which could have significant ramifications for small operators who depend on quick access to their earnings.

Understanding the Psychology Behind Tipping

Experts caution against interpreting these state rankings solely as measures of generosity. Jessica Hart, an HR consultant from California, highlighted the importance of understanding the wage structures that influence tipping behavior. The federal tipped minimum wage remains at $2.13 per hour in states like South Carolina, allowing employers to pay this rate as long as tips compensate for the difference to meet minimum wage standards. In contrast, states like Oregon require employers to pay the full state minimum wage before tips, altering consumer perception of tipping from a reward for service to a necessary wage supplement.

“The difference dramatically influences consumer behavior,” Hart noted. When patrons are aware that servers earn a low base wage, they may view tipping as a way to bridge the compensation gap rather than a simple act of appreciation. In states where servers receive a full minimum wage plus tips, gratuities seem more discretionary, according to Hart.

The increase in digital payment systems is also affecting tipping norms. As customers are prompted to tip more frequently, the psychological aspects of tipping are evolving. Lisa Mirza Grotts, a California-based etiquette expert, remarked, “Tipping fatigue is real — not because people have become less generous, but because the social rules have blurred.” During the COVID-19 pandemic, tipping became a vital source of income for workers. Although the crisis has subsided, the digital prompts for tipping remain prevalent.

Inflation and rising prices are also significant factors influencing consumer behavior at checkout. Even though tip percentages may remain consistent, higher bills lead to increased final totals, which consumers are acutely aware of. Grotts emphasized that a tip should acknowledge service rather than simply respond to a digital screen requesting a specific percentage.

As tipping practices continue to evolve, understanding the context behind these behaviors is crucial. The data indicates that while Americans may feel ambivalent about the tipping culture, their generosity persists, shaped by regional norms, economic factors, and changing social landscapes.