Patrick Bruha

Patrick Bruha

Staff Writer
The Brazil Business

Updated

Service Fee and Tips in Brazil

Patrick Bruha

Patrick Bruha

Staff Writer
The Brazil Business

Updated

When travelling to other countries, questions may arise as to how to tip for services, as well as if there are any additional service fees. In this article, we will learn more about the service fee and tips in Brazil.

Service Fee

The taxa de serviço, which is Portuguese for service fee, may be charged on waiter services in bars and restaurants. This fee can also be charged on services in hotels and car rentals. Even though the most common rate for the service fee is 10% of the total price - be it a restaurant bill or a hotel daily rate - there are some places where it can reach up to 15% or even 20%, especially in upmarket restaurants.

Although it is present on the bill and may appear to be mandatory, customers are not obligated to pay this service fee. It must be made clear to the consumer that its payment is entirely optional and that the collection of this fee must be stated on the bill.

Also, according to IDEC, which is the Brazilian Institute of Consumer Protection, the service fee should not be collected on bills for hotels and car rental offices. In these cases, IDEC understands that the service is part of the company’s function, and should thus be included in the daily rate.

In fact, the collection or not of the service fee is a controversial matter in Brazil, since some lawyers say that it might be charged outside of bars and restaurants, in case there is a labor agreement between the syndicate of workers of that premise and the employer. The labor agreement must clearly state that all the fees collected through the service fee must be shared between the workers.

Refund of service fee

If the consumer feels that they received bad service, they have the option to not pay it. Also, if the consumer was charged the service fee without knowing it was optional, they may ask for a refund. If talking directly to the provider of the service does not work, the consumer must contact Procon in order to have its consumer rights respected.

In case of refunds, the consumer can be granted a refund of up to twice the amount that was improperly charged, increased by monetary adjustment and interests.

Tips

As with everywhere around the world, tips are not mandatory in Brazil. In fact, Brazilians tend not to give tips for services rendered. This is because most of them see the service fee as the actual tip and pay it accordingly. The only exception for this is when the service rendered was especially bad and the customer is unhappy with it.

Tax collection over service fee and tips

All companies that collect the service fee from customers must retain 35% of it in order to pay for labor benefits, taxes and social security contributions. They must then pass the remaining 65% of what was collected directly to the workers and state this, separately from the regular wage, on the payslip.

However, some restaurants, while trying to avoid tax collection on the service fee, may register it as a type of “change” or may not register it at all in the Nota Fiscal Paulista.