How Much Should I Tip at a Restaurant in Cabarete?
ITBIS, Ley, Gratuity? Oh my!
All photos in this article provided by Restaurant Serenade
One of the most asked questions from the visitors of Cabarete is, “How much should I tip at a restaurant Cabarete?” The short answer is 10-20% depending on the service you received.
The long answer is a little more complicated. So, in this article, we will do our best to explain best practices based on what you see on your bill.
- ITBIS and LEY: What do they mean?
- Service vs. Gratuity
- Where did the 28% go?
- How much should I tip in Cabarete then?
ITBIS and LEY: What do they mean?
Many people are confused (and upset) when they get their tab and see that 28% has been added to the cost of their meal and drinks. 18% of that is called “ITBIS” and it stands for “Impuesto sobre Transferencia de Bienes Industrializados y Servicios,” which means taxes for transferring industrial goods and services. You can think of it as sales tax in the US or VAT in the UK. 10% of the 28% is called “Ley” which means “law” in Spanish. This can be a topic of much debate because Dominican law requires hotels and restaurants to add a 10% “service tax” to your bill.
Service vs. Gratuity
Which bring us to the part where we talk about “service” versus “gratuity” in the context in which we are explaining. If asked, managers will usually say, “service is included,” while servers will almost always say, “tips are not included.” Here is why their answers vary:
The 10% service tax is not a gratuity for your server. It is distributed among ALL employees, although not necessarily in equal shares. Many restaurants allocate a large portion of the 10% to management or the chef rather than to the server or bartender. Furthermore, in restaurants where 10% Ley is equally distributed among all employees (including but not limited to security, and maintenance personnel on duty at the time) which means the person actually serving you at the table may only get a fraction of that 10%.
Where did the 28% go?
As if that is not confusing enough, sometimes the 28% has seemingly not been included at all. There are two different scenarios for this. Often customers can feel they have been tricked when they see this 28% added to their meal. So, some restaurant owners will just include 28% in the prices of the item. Another reason you may not see the 28% on your check is because if you pay cash…nothing is reported to the government. This is more likely to be the case in tiny restaurants where credit cards are not accepted.
How much should I tip in Cabarete then?
It may help to know that minimum wage in Cabarete (and all of the Dominican Republic) is about $250 USD per month. So, if you want to leave a tip for the person who you had direct contact with, then 10-20% is appreciated. Use your best judgment based on the service you received and the warm fuzzy feeling you walked away with (which may or may not come from the mamajuana). Cash is king, as usual.