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Australians visiting the USA - money, taxes and tipping

Updated on June 8, 2012

As an Australian, you grow up exposed to anything and everything American. The entertainment, the food, the culture, even the politics! So finally, after years trying to 'perfect' that American twang and desperate to walk down New York's Times Square, you finally take the plunge, purchase a ticket, and book that dream holiday to the USA! You think that it'll be pretty easy, fairly straight forward. Get on the plane, fly for 14+ hours, arrive at your destination and fun awaits. Well, you're half right. But there's a few things you need to know before you jet off, and money, taxes and tipping is high up there on the list...

Speak to any Aussie who's traveled or even lived in America and one of the first things they'll tell you is how different the money is. Literally, the coins and notes. At first glance it seems pretty similar to Australia - after all, we both call our currency the 'dollar', right? That's pretty much where the similarities end.

Let's start with the coins. First and foremost, the Americans actually have names for their coins. Not like '1 cent', '10 cent' etc. No, they have specific names for them:

1c = penny (it's copper, about the size of an Australian 5c piece)

5c = nickel (it's silver, about the size of an Australian 10c piece)

10c = dime (it's also silver, but smaller than the nickel, pretty much on par with the penny)

25c = quarter (it's silver, somewhere between the nickel and an Australian 20c piece)

They're the main ones. Yes they have a $1 coin, but they're rare and most Americans have ever seen one.

Let's move onto the notes. After 2 years living in the US, i still marvel at how basic and similar all the notes are. My question still remains "how do blind people what money they're handing over?". You see, all American notes look the same (to the naked eye that is). Same color, same size. Unlike Australian money which literally gets larger as the denomination increases and which varies in colors from blues to pinks to oranges, Americans money is universal. Unless you're clever enough to spot the difference in regards to the 'famous faces. Oh and by the way - they call them 'bills', not 'notes'!

$1 bill = George Washington

$5 bill = Abraham Lincoln

$10 bill = Alexander Hamilton

$20 bill = Andrew Jackson

$50 bill = Ulysses S Grant

$100 bill = Benjamin Franklin

I'm not going to go further than the $100 - purely because I've never seen one! Note - there is also a $2 bill (featuring Thomas Jefferson, but like the $1 coin, these are pretty rare).

So there you have it - money. Let's move on to taxes. Taxes in the US is tricky, mainly because, unlike the money, it's NOT universal. Each state has a different sales tax and local surcharge tax. Alaska is the 'lucky' state in some ways, with 0% tax, while unsurprisingly people in New York can expect to pay 13%. And the tricky part is, these taxes aren't 'advertised'. Go into any store, whether it be a coffee shop, a clothing store or even a hotel, and the quoted/listed/advertised price is only the beginning - the sales assistant/person at the cash register will ADD ON THE TAX at the final sale. So don't walk into Starbucks expecting to pay $3.00 for your cappuccino - it'll be more like $3.29 (in California). A full list of state-by-state tax rates can be found at

Money and taxes. Now comes the fun part - tipping. America is big on tipping, don't be mistaken. You tip for virtually everything - taxis, manicures, waiters etc. The question is, who to tip and how much? Although some people will tell you that it depends what state you're in (ie. you would be expected to tip more at a restaurant in New York compared to North Dakota), there really isn't a state divide. Where there is a divide is when it comes to the service being 'rewarded'.

Obviously I can't list all professions/services, but here's a bit of a rundown:

Taxi = 10-15%

Doorman/bellhop = $2 per bag

Bartender = $1 per drink (if paying per drink) or 15% at the end of the bill

Waiter = 15-20% of bill (this is a tricky one, because I still like to tip based on service. If you're good, I'll tip you well. If you're bad, I'll tip you accordingly. Following on from this, if you're at a fancy restaurant, you can go above the 20%)

Food delivery (ie. pizza) = $2-5

Hair stylist = 15-20%

Nail technician/masseuse = 10-15%

They're the main people you'll come across while on vacation. The one thing to remember is to TIP IF YOU HAVE RECEIVED A SERVICE. You don't have to tip the kid who served you at McDonalds. You don't have to tip the woman who sold you the clothes at Abercrombie and Fitch. Sometimes some cafes/food outlets/banks etc will have charity buckets or they're own 'tip jars'. Throw in a couple of coins if you feel the need. The other avenue for tipping for tourists is on tours/excursions. Say you've caught a coach to Disneyland and the bus is dropping you back at your hotel. Do you tip? Most people would say yes. A few dollars will suffice, but again, if you feel their service warrants more, go ahead! You have to remember, America is big on minimum wage and most service industry people earn very little in wages. Without tipping, they'd be earning next to nothing. One of the biggest gripes Australians have is "why do I have to tip you - why doesn't your boss pay you more?" Unfortunately, that's just not how it works here. But you will find that generally (and remember that word 'generally') things and services are cheaper, so adding on a little extra for gratuity doesn't feel so bad in the end.

There you go. Money, taxes and tipping in the United States. It isn't that ridiculous, I hope I have confused you. But it's worth knowing before you arrive!!!


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    • Karon Dawson profile image

      Karon Dawson 5 years ago

      Well you know what your dad thinks about tipping!

    • Danette Watt profile image

      Danette Watt 5 years ago from Illinois

      The reason the $1 coin isn't popular is because the govt wasn't smart enough to distinguish it enough from the quarter so people kept confusing the two.

      Good info here, voted up.