If you’ve dined out in Australia lately, you may have noticed a creeping trend that’s got many scratching their heads—and, in some cases, reaching for their wallets with a little more trepidation.
The latest flashpoint is one restaurant’s decision to add an automatic ‘optional’ tip to diners’ bills.
This has sparked a fiery debate about whether we’re seeing the Americanisation of our beloved Australian dining culture.
A surprise at the end of the meal
The controversy kicked off when a diner at Lana, a chic Italian spot in Sydney’s Circular Quay, shared their experience on social media.
After enjoying their meal, they were presented with a bill totalling $221—only to find a seven per cent service charge ($15.47) tacked on, bringing the total to $236.45.
The kicker? The service charge was mentioned on the menu, but only in ‘tiny print’.
The diner’s post quickly gained traction, with many Australians expressing outrage at what they saw as a sneaky, un-Australian move.
‘This isn’t America,’ one commenter fumed, while another called the practice ‘absolutely disgraceful behaviour’.
Others vowed to avoid any restaurant that tried to slip an auto-gratuity onto their bill.
The restaurant’s side of the story
Lana’s management was quick to respond to the backlash, explaining that the seven per cent gratuity is ‘optional’ and communicated at multiple points—on their website, during the booking process, in confirmation emails, on the menu, and even verbally when the bill is presented.
‘This surcharge is not mandatory and can be removed at any point, no questions asked nor judgement given, should a guest request it.’
They stressed that the charge is designed to reward staff for their hard work and to help retain experienced hospitality workers in a tough industry.
The restaurant also clarified that every dollar of the gratuity goes directly to the team working that shift, including kitchen staff, via a third-party software system to ensure transparency.
The awkwardness factor
Despite these assurances, many diners remain sceptical. As one commenter put it, ‘They’re counting on the fact that a good number of diners will feel too awkward to ask for it to be removed.’
After all, who wants to be the person who looks their server in the eye and says, ‘Actually, I’d like to take that tip off, thanks’?
This social pressure is a big part of why the American tipping culture has become so entrenched—and why many Australians are so wary of seeing it take root here.
Is it even legal?
You might be wondering: can restaurants in Australia even do this? The answer is yes, but with strict conditions.
According to the Australian Competition and Consumer Commission (ACCC), any automatic service charge or tip must be clearly disclosed as optional and included in the total price before payment.
Diners must also be able to request its removal without hassle. If you ever feel pressured or misled about a surcharge, you have every right to ask for it to be taken off—and to report the business if they refuse.
Why the fuss? The Australian way vs the American way
At the heart of the debate is a fundamental difference between Australian and American hospitality cultures.
In the US, tipping is a way of life because many hospitality workers earn a base wage as low as $US7.25 (about $11.32) per hour, and rely on tips to make up the difference.
In Australia, by contrast, the minimum wage is a much healthier $24.95 per hour (as of July 2024), and tips are seen as a bonus for exceptional service—not an expectation.
For many Australians, the idea of being pressured into tipping feels like a slippery slope.
Once tipping becomes the norm, it’s hard to go back—and there’s a real fear that it could erode our fair wage system and change the relaxed, egalitarian spirit of dining out Down Under.
The bigger picture: Why are restaurants doing this?
It’s no secret that the hospitality industry has been doing it tough.
Rising costs, staff shortages and the lingering effects of the pandemic have put enormous pressure on restaurants to find new ways to attract and retain good staff.
Some see optional service charges as a way to reward hard-working teams and keep experienced staff in the industry.
But is this the right solution? Or does it risk alienating customers and undermining the very culture that makes Australian dining so special?
Have your say!
We want to hear from you. Have you encountered automatic service charges or ‘optional’ tips on your bill? Did you feel comfortable asking for them to be removed? Do you think tipping culture is creeping into Australia—or is this just a blip?
Share your thoughts and experiences in the comments below. Let’s keep the conversation going and make sure our dining culture stays true to what makes it great!
The only time that usually has a Surcharge is on a Public Holiday, as that is when it is needed to cover the additional cost due to the increased Public Holiday hourly rate for the Workers !!
Basically, trying to do it every day, seems like a Rip Off, and I would definitely avoid any business that tried to introduce it !!
Let’s not go down that American way here in Australia. I agree with public holidays as long as the staff get it but if they want continued patronage it would be best not to take a tipping charge. They say they are doing it tough but that won’t help them, it would just make people go elsewhere and they will end up doing it tougher.
I’ve not dined out in many years where a ‘bill’ has been presented after dining. At most places these days, especially at pubs, cafes, etc, you pay for the meal when the order is placed, so tips are rarely requested.
I certainly won’t ever be ‘compelled’ to give a tip.
Just pay the bill minus the tip
If one was not alert to the sneaky optional tip note, and most people don’t check carefully and just pay the bill, incl the time. I hate this American culture, and object to the principle of a x-% tip. Why should my tip cost more for a meal of say, a pasta vs a much more expensive seafood meal? The service is the same regardless of the meal/price. I don’t mind tipping for good service but on a more optional say rounding up to next $2-$10 depending on group size. In Germany they used to tip to the next rounded Euro or two..
My reply would be loud and simple so everyone would hear. I would ask the waiter for a 20% pensioner discount then I’d gladly pay the 7% tip. No pensioner discount, take the tip of the bill. And always keeping a smile and being polite.
Love it!
I will not pay a tip unless it is directly to the person who gave me outstanding service. I am always amazed about hospitality wanting tips as they are on a decent wage. Do we give tips to other workers in other industries that go out of their way to help you and spend quite an amount of time with you – no, so why do people think hospitality workers need tips. To me it’s a sneaky way for the business to get extra money.
No USA style tipping culture here in Australia please. Let’s have businesses pay their staff fairly and properly and not rely on the whims of customers. I like to know my costs up front before selecting my meal choices, not have to end my dining experience with some kind of guessing game wondering how much I should pay extra for these poor staff who may or may not be paid enough. If I feel I’ve received above average service I like to think I can CHOOSE to tip whatever I can afford at the time. I go to restaurants to get a break from cooking, to get a good experience, good ambience and good service. Not to have it end with an unsolicited tip that’s already included in my bill that then makes it awkward for me to decline if I decide for whatever reason that I don’t want to leave a tip. I find many Sydney restaurants these days have disappointing food, nothing I can’t cook just as well at home, and I only go out because of a social occasion. So yes there are times when I don’t think a tip is warranted. People don’t leave tips for a variety of reasons. It makes me angry to see an automatic tip inserted in the bill. It’s not to reward the staff. That’s just marketing BS. If the restaurant was genuine about rewarding their staff they’d be paying them properly in the first place and have inhouse bonuses or incentive schemes.