California and Washington state led the nation with the lowest average tip rates at restaurants in the final quarter of 2025.
Residents in both states tipped nearly 2% lower on average than the national average of 19.2% at full-service restaurants, according to a report from Toast. California has one of the highest marginal state income tax rates in the country, while Washington recently enacted a 9.9% tax rate on incomes over $1 million.
California ranked at the bottom for average tips at full-service restaurants in the nation in the fourth quarter of 2025 at 17.2%, followed by Washington at 17.6%. Washington, D.C., also ranked near the bottom in tip rates in the country, according to Axios.
Delaware led the nation in tip rates at full-service restaurants in the final quarter of 2025 at 21.8%. Tips at quick-service restaurants remained flat at 15.8% nationally.
California’s top income tax rate stands at over 13% with many other taxes, including city levies, driving those rates even higher. California has experienced a large exodus of residents since 2019, losing over $91 billion in net income between 2019 and 2023, according to the New York Post.
Activists in the state are also seeking to garner enough signatures to place a one-time 5% billionaires tax on the ballot for November’s midterm elections, threatening to further exacerbate the flight of wealth from the state.
Seattle Mayor Katie Wilson (Screenshot/YouTube/KING 5 Seattle)
Democratic Washington Gov. Bob Ferguson signed into law a 9.9% tax on incomes over $1 million on March 30. Democratic Seattle Mayor Katie Wilson also threatened grocery chains in her city during a September 2025 campaign event, saying she wouldn’t allow chains to close their doors and threatened to institute government-run grocery stores.
Wealthy business moguls, including Tesla CEO Elon Musk and Meta CEO Mark Zuckerberg, both moved their residences out of California. Former Starbucks CEO Howard Schultz announced in March he was moving from Washington to Florida.
President Donald Trump signed a tax exemption provision into law on tipped income on July 4, 2025, after campaigning on the policy during his 2024 presidential campaign.
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