Tips, taxes, commissions, how to spend your money in New York?!

The common act purchasing something (food, goods, clothes, other equipment…) in your own country is quite simple: you have a good idea of the prices applied in your local stores and depending on which country you live in, taxes are directly applied on the displayed item. You do not get surprised at the view of the price of your final purchase!

Credits: Harlem Spirituals
Credits: Harlem Spirituals

Therefore, you may feel a little bit lost performing such a mindless act when abroad. It can also become trickier when it’s not using your own currency. Get ready for some math calculations! In this article, I will explain to you how tipping works in New York, what your bank charges you per withdrawal and help you out with general money questions you may have.

How do I pay in New York?

Of course, in New York, the currency is the US dollar! See, you were not that terrible in school ! 🙂

1$ equals approximately to 0,77 British pound or 1,30 Australian dollar or 1,30 Canadian dollar or 3.49 Israel New shekels. The bills in circulation are the $1, $2 (new), $5, $10, $20 and $50 and $100. (sometimes business owners can be reticent to accept bills of $100) the coins in circulation are: the quarter (25 cents), the dime (10 cents), the nickel (5 cents) and finally the penny (1 cent). Generally, the most used credit cards, VISA or MASTERCARD are accepted almost everywhere. However certain business owners don’t take the American Express because this company charges them a higher commission. Banking checks from another country are not accepted.

Before coming to New York, I suggest you to pay your banker a visit to make sure your credit card is usable for your travel needs. You can also write an e-mail but do not forget to mention the dates of your stay! Indeed, if your credit card was never used abroad before, their security system qualifies your expenses as fraud and disables your CB instantly. While in New York, you can withdraw cash in ATMs. There are inside and outside most of the banks (avoid those at bars or placed outside small businesses where commissions are higher than in banks, even for national residents). During your withdrawals, I suggest you to choose “withdrawal from checking”. Depending on the partnerships that your bank has set up with local banks here, you may have to pay additional fees from $4 to $8 per operation. The best way to know is to consult the pricing online.

How much cash do I need to carry in New York?

When one goes abroad, it is essential to always carry a little bit of cash. Worst case scenario: imagine for a second that you lose your credit card on your first day… It is then necessary that you have enough money to help you get by for a few days while waiting for a new card or finding another solution! To gage how much you need in cash, do a quick calculation based on what you plan to buy/spend during your first few days. If you want to grab a taxi cab at the airport, the cost of the ride is between $65 to $70. I personally don’t think that you need much money on your arrival because for most cases, your accommodation has already been paid beforehand.

IMPORTANT: Please, don’t be fooled, avoid “black cabs” (illegal taxis), also called “gypsy cabs.” Their drivers are only looking to scam tourists and will not hesitate to ask you $200 for the transportation to your hotel! My advice to you is to wait on line for a yellow taxi (yellow cab) where an agent at the airport will affect you to a car, and it is one of the safest options out there.

Credits: Harlem Spitituals
Credits: Harlem Spitituals

If you want to plan ahead and avoid the hassle of finding a taxi cab after your long and tiresome flight, you can now book our comfy transportation service options from any airport to your hotel/apartment with us by CLICKING HERE.

Regarding the currency exchange, your bank is limited with economic solutions for your travel because their commissions are pretty expensive in my opinion.

Here are my 2 advices to you:

– pre-order US money online and withdraw it directly at the airport. Some Exchange Currency offices offer this service.

– if you have time, go to 2 or 3 Exchange currency offices near where you live to check what they offer, some of them (depending on your country) charge a little commission, other nothing. Explore all your options!

Service and leaving tips in the Big Apple

The average income of a waiter/bartender in New York is less than the minimum wage and that’s the reason why tipping is mandatory. It is very common to leave between 18% to 20% of the check in tips according to the quality of service you got. For your informaton, the tip is called “gratuity“. If you order a drink at a bar, the average tip is $1 or $2 per drink. If you are 6 people or more at a table, the waiter will automatically include a “gratuity” of 20% on your check/bill.

Credits: Liberation
Credits: Liberation

Tipping is not applied everywhere though. Indeed, if you eat in a fast-food like McDonalds or Starbucks, the concept of service doesn’t really exist because nobody will bring your order at your table! When taking a cab, like in most restaurants, you need to tip between 15% to 20%. If you pay in credit card, you will be able to select the options displayed on the small monitors behind the seats of the car.

In New York, the displayed prices don’t include taxes

On my first day in New York and doing some shopping, I was being cautious about the estimation price of my shopping cart while filling it. When I got to the cash register, I was surprised to notice that the amount estimated increased by approximately 10%! So much for my calculations… I asked the cashier to explain to me this price difference, and she declared the displayed prices don’t include taxes ! So beware of that.

What are taxes for the goods and services in New York?

The State of New York imposes taxes on services and goods on its territory.

When you see a displayed price, it is necessary to add 8,875% of taxes.

Taxes are composed this way :

– the tax of the town of New York with 4.5%,

– the tax of the State of New York with 4%,

  • the tax of Metropolitan Commuter Transportation District (MCTD) of 0,375%. Nevertheless, some products are not subjected to this tax, it is the case of food (except for restaurants), drugs, diapers, magazines and newspapers… but also clothing and accessories like shoes if their cost do not exceed $110.

Example for a pair of shoes:

– If a pair of shoes costs $110 or more, it will be taxed up to 8,875%.

– If this same pair of shoes costs less than $110, no tax will be applied. Another example: You bought 3 pairs of shoes at $100 dollars per pair, the tax will not apply because each pair of shoes do not exceed $110 dollars. As soon as you buy an item that costs $110 or more, the tax will apply.

Credits: Glamour
Credits: Glamour

I hope you found this article to be useful before you take on your NY adventure, if you have any question, do not hesitate to drop me a line on Facebook!

Salvatore