Holiday tipping confuses nearly everyone — here's what you need to know

For many, the winter holidays bring a slew of rituals that are tiresome, expensive or stressful, and one ritual that's often all three: The year-end tip parade.

"I absolutely dread this time of year," said Sarah Johnson, a 51-year-old public relations pro living in Manhattan. "A significant portion of my paycheck is going to be allocated toward tipping people working in my building. In New York, the rule of thumb is: a lot of money!"

The custom doesn't just affect New Yorkers. Up to half of all Americans tip people like mail carriers, garbage or recycling collectors, and even childcare providers, according to a CreditCards.com survey. Other workers who might expect to see a little extra at the end of the year include house cleaners, dog walkers and parking attendants.  

A joy or an obligation?

Holiday tipping resembles holiday gift-giving more than it does routine tipping of service workers — that can make it both more confusing and, for some people, more delightful.

Merel Kriegsman, a 30-year-old marketing professional, told CBS MoneyWatch she tips generously as a way of "showing myself, the universe, that I have such a surplus of money that I can afford to be really generous. Every tip that I give, I reaffirm that I am that person," she said.

Kriegsman, who lives on a 160-acre property in Saskatchewan, Canada, with her husband and two children, said she typically gives between $100 and $300 every winter to her groundskeeper, house cleaner and nanny. She doesn't think of the tips as a way to supplement a worker's pay, but rather a way to create a "surprise moment," she said.

For others, though, year-end tipping can be stressful. "You're tipping people who you don't normally tip every day," said Rivan Stinson, associate online editor for Kiplinger. 

For instance, tipping apartment building staff is a common enough practice that most residents are at least aware of it, but many aren't sure how much to offer or even whom to include.

"I live in an apartment, but I don't know who works in the building," added Stinson, who lives in the Washington, D.C. area. "I work with maintenance guys, but I wouldn't think to tip them."

There can be so many questions: Am I tipping too little? Too much? If my tips are on the low side, will I get crummy service? Here's some guidance on tipping for the holidays:

Who shouldn't you tip?

Tipping the mail carrier may be the most common practice that's technically against the law. Federal regulations forbid postal employees from accepting cash or cash equivalents — that includes that Visa gift card, although they can accept gifts worth $20 or less.

Many people ignore these restrictions. About 40% of those surveyed by CreditCards.com said they tip their mail carrier.  

As for the federal rule? "To me it seems anti-worker, against the spirit of the season," said Chuck Zlatkin, communications director for the New York Metro Area Postal Workers Union. "I think everyone has to decide for themselves" whether to give or accept tips, he added.

Tipping municipal workers can also be fraught. Several years ago, a New York City garbage collector lost his job and had to pay a $1,500 fine over accepting a $20 tip from a homeowner, which is against the rules. Two other sanitation workers were fined $2,000 for splitting a $10 tip. But other areas do allow it, as do some private trash collection companies. About 3 in 10 Americans tip garbage collectors, according to CreditCards.com.

A special occasion

The little research that exists on the topic indicates that people do tend to think of holiday tipping differently than they do of rewarding low-wage workers for service, such as waiters or food delivery people. A 2014 paper by economist Adam Eric Greenberg found that most restaurant patrons tipped their usual amount during the holiday season, while a few were extra-generous.

"Tipping in America is largely due to the fact that people are underpaid, and the law dictates that that's sometimes acceptable," he said.

The payment processor Square crunched numbers for tips received in December for a range of businesses. Overall, Square researchers found no big jump in either the amount tipped or the frequency of tipping compared with the rest of the year. However, cleaning services reported a small uptick in both amount and frequency, and hair salons reported a slightly higher average tip amount. (Of course, if large numbers of people were tipping more in cash during December, it wouldn't show up in this digital-payment data.)

Make a list

If you do choose to tip over the holidays, etiquette experts have a few rules of thumb.

"First, make a list," Kiplinger's Stinson said. She recommends writing down the names of individuals who have performed a lot of services or otherwise been helpful over the course of a year. "Prioritize — who do you have access to every day?"

Frequently listed people include house cleaners, dog walkers, mail carriers (noting the $20 gift limit), trash pickup workers (if they're allowed to accept tips), nannies, babysitters and people who help with your property. In an apartment complex, that can mean the superintendent, doormen and maintenance staff; in a house, the person who shovels your driveway and mows the lawn.

A guideline for services, such as house cleaning, is to tip the cost of one service at the end of the year. For a cleaner who is paid $50 per session, that means a $50 holiday tip.

Tips for building staff vary the most, ranging anywhere from $50 to divvying up the equivalent of one month's rent depending on "the location of the building, the rent/condo fees, and how often you used their services," said Jodi RR Smith, an etiquette consultant. If in doubt, ask your neighbors or the building management company for guidance. Many buildings offer suggested tip amounts, and some will pool and then distribute all the residents' contributions — a good option for those wanting to avoid potential face-to-face awkwardness.

While not all workers are able to accept a cash tip, when cash is an option it's almost always the best one. Gift cards can be nice, but nothing offers the same flexibility of use that cash does—and many of the people receiving tips will have their own year-end tips to give and purchases to make. Getting new, crisp bills and putting the tip in an envelope or card ups the "special" factor.

There's no wrong time to tip

Tipping around the holidays is a habit that's easy to remember, but if that adds too much stress to an already anxiety-inducing time of year, consider doing it another time. "If you miss somebody, you can always thank them in January. You don't have to thank them just around the holidays," Stinson said.

And if a service worker has done an exceptional job over the year, consider writing a note to the company they work for, with a copy to the worker themselves. 

Smith, the etiquette consultant, recommends this option for people who are too cash-strapped to tip, or as an option in addition to a tip. Aside from making workers feel appreciated, such notes can boost their careers, or help them get better work or better hours.