California and Washington Lead in Low Restaurant Tip Rates
In the final quarter of 2025, California and Washington state recorded the lowest average tip rates at restaurants across the United States. Residents in both states tipped almost 2% below the national average of 19.2% at full-service restaurants, according to a report from Toast. California, notable for its high marginal state income tax rate, and Washington, which introduced a 9.9% tax on incomes exceeding $1 million, seem to be affecting tipping behaviors.
Specifically, California’s average tips at full-service restaurants were the lowest in the country at 17.2%, closely followed by Washington at 17.6%. Washington, D.C., also fell near the bottom for tipping rates, as noted by Axios.
On the other end of the spectrum, Delaware topped the list with a 21.8% average tip rate at full-service eateries in the same quarter. Meanwhile, tips at quick-service restaurants remained unchanged at 15.8% nationally.
The steep income tax in California exceeds 13%, with various local taxes pushing that even higher. The state has seen a significant outflow of residents since 2019, losing over $91 billion in net income during that period, as reported by the New York Post.
Additionally, activists in California are working to collect signatures for a proposed one-time 5% tax on billionaires, which could deepen the migration of wealth away from the state as voters prepare for the midterm elections in November.
In Washington, Governor Bob Ferguson recently signed a 9.9% tax on incomes over $1 million into law. Furthermore, Seattle’s Democratic Mayor Katie Wilson made headlines when she threatened grocery chains during a September 2025 event, promising not to permit their closure and hinting at the potential establishment of government-operated grocery stores.
Additionally, prominent figures such as Elon Musk and Mark Zuckerberg have relocated out of California, while former Starbucks CEO Howard Schultz announced he was moving from Washington to Florida.
On a federal level, former President Donald Trump enacted a tax exemption for tipped income on July 4, 2025, which had been a highlight of his 2024 campaign.
