In Australia, tipping is not historically part of the culture, but the rise of cashless payment prompts is compelling customers to tip to avoid awkwardness rather than reward service. The question of who actually pockets the gratuity remains a concern for both customers and staff.
Cashless prompts drive tipping behavior
In an increasingly cashless society, wherever you spend money, there is often a prompt to spend more. Pubs, cafes, beauty salons, farmers' markets, rideshares, food delivery services and even online shopping – the option to tip can present itself wherever you tap your card.
Until recently, tipping "wasn't a big thing in Australia," says Kieran Scott, a Brisbane-based web designer. "[Businesses] basically never asked if you wanted to leave a tip," he says. Rather it was something you did "out of your own choice."
Scott views tipping as quintessentially American. In the United States, where tips subsidise employees' low hourly wages, it's a cultural faux pas not to leave one. Tormey Reimer, a research scientist from Melbourne, says: "[Tipping] is justification for not paying people as much. I really hope it doesn't take root here because we're doing a lot better than the US in trying to make life more livable for people."
Social pressure and digital prompts
In 2025 the Reserve Bank of Australia reported around 75% of payments were made by debit or credit card. Professor Angel Zhong from the School of Economics, Finance and Marketing at RMIT University, says tipping culture in Australia is growing alongside the increase in digital payments.
This is because popular Eftpos systems such as Square (from the US), Zeller and Tyro (both Australian) have tipping prompts built into their systems. While tipping is disabled by default on all three terminals, once it is enabled, the social cost of asking for tips falls, Zhong says. "Staff don't need to request a tip, the screen does it automatically," she explains.
Unlike physical tip jars, Zhong says digital prompts can place pressure on customers to tip. "People often feel uncomfortable pressing 'no tip' when you have staff standing nearby," she says. "Consumers may tip to avoid social awkwardness rather than wanting to reward service."
Reimer is adept at resisting this new type of social discomfort. "I don't feel bad clicking zero because I know that [the staff] are getting paid … I don't feel like I'm personally taking away their livelihood. I'm just trying to get a coffee," she says.
Another frequent diner, Joshua Fernandes, a Melbourne-based data analyst, says he has begun pushing back on what he considers – at best – an "extreme" annoyance and at worst part of a growing list of US cultural imports. He is now quick to select "no tip" when presented with the option.
Piet Pantano, owner of Wild Life hair salon in Sydney, says it is particularly egregious when ordering through a QR code at restaurants: "I'm not leaving a tip for ordering my own food."
All three share the same sentiment: tipping is not a part of Australian culture. People on social media also firmly reject tipping, with threads about the practice on Australian subreddits consistently receiving hundreds of comments.
Where do the tips go?
Behind the counter, business owners say that despite tipping being more accessible, some Eftpos systems make it harder to track and process.
For Zeller, Tyro and Square, if a tip is added to the bill, the platform's surcharge – between 1.2% and 1.6% – is applied to the transaction; so a 10% tip would result in a fractionally higher surcharge than a bill with no tip.
Nathanael Hardidge, owner of Plumage hair salon in Melbourne, uses a London-based Eftpos and booking system called Fresha which charges a 1.59% transaction fee. To pay tips out to his staff, he has to take the corresponding amount, minus the transaction fee, out from the till, which because of the fractional difference is "just a bit of a pain." Of course, says Hardidge, "it's in their [the software's] interest to get a bit more money coming through."
Hardidge says clients are "definitely" unaware that payment systems might take a percentage from tips paid through their platforms, and is considering removing the option to tip after receiving feedback from clients that the prompts are "quite rude."
In Australia, the option to tip was introduced to food delivery apps and on-demand transportation, such as Uber, Uber Eats and Doordash, in 2019. On these platforms, tips are paid out in full to the drivers.
No legal framework for tips
Aidan Perkins has worked in the hospitality industry for 12 years. He says most people in Australia assume all tips go directly to staff. But there is no legal framework in Australia that makes it mandatory for businesses to pass on tips to employees.
According to the Fair Work Ombudsman, the Fair Work Act does not have rules about dealing with tips. "Employees must be paid at least the minimum rates of pay under any applicable award or enterprise agreement," a spokesperson said. "There may be additional requirements about rates of pay or dealing with tips in an employee's contract of employment."
Perkins is advocating for laws that require businesses pass on tips and make their tipping policies clear for both staff and customers. In the UK and US, tips are legally required to go directly to staff.
Perkins says while "most businesses" are doing the right thing by passing on tips to staff, some "dodgy" owners might not. He has witnessed employers use tips as a "carrot and a stick" – to cover for breakages such as dropped plates or as awards in trivia contests where employees are tested on their menu knowledge.
Sharon* has worked in the hospitality industry for more than 10 years and says she routinely experiences her tips being withheld by management. "You're cheating your workers … It's toxic," she says. Her experience has made her wary of tipping as a customer at other venues.
Australians resist tipping expectations
Jade "loves" that tipping in Australia is not obligatory. Rather, it's the customer's way of acknowledging exceptional service. She says the tips she received in her time in hospitality made her feel good because they were only given out in rare occurrences.
But does exemplary service really happen every time a customer taps their card? Zhong says "a tipping screen can create a subtle sense that tipping is expected, if it remains voluntary."
Neeka Noble and Jamie Setter, delivery drivers for Uber Eats, both say tipping is uncommon. On the rare occasions Noble does receive a tip, she has just "been grateful." "I don't expect it. And I don't think many Australians do expect it."
Daniel Harrison, co-owner of Superfreak cafe in Sydney's inner west, agrees. "I find myself tipping things that I don't want to tip all the time just because that prompt's there," he says.
Zhong says many Australians are uncomfortable with the idea of workers relying on tips to earn a living wage. At present, the fair minimum wage system in Australia ranks as one of the highest globally, she says.
For this reason, Fernandes and other patrons do not believe routine tipping should apply in Australia – regardless of what a payment system may prompt. "It doesn't make sense to crowdfund someone's paycheck," Fernandes says.
Zhong recalls debates in 2023 and 2024 around the move towards a cashless society and arguments that such a move would "cut people's incentives to tip." But now, Zhong says, "it's actually motivating."
To Harrison, the essence of tipping – exceptional service – hasn't followed its growth. "I often find that the venues I don't want to tip at are the ones that prompt me," he says.
*Names have been changed
