Sydney diners push back against ‘removable’ tips
A new Redfern restaurant has stirred debate after introducing an automatic tip on all bills, leaving some diners feeling cornered into paying extra.
Island Radio, a Southeast Asian restaurant and noodle bar within the suburb’s new A$50 million dining precinct, adds a 3% gratuity to every bill. For groups of eight or more, that jumps to a 10% service charge. The restaurant stresses the fee is “removable upon request, no questions asked,” and notes it on its website, menus, and receipts.
The surcharge sits on top of a 10% Sunday surcharge and a 15% public holiday surcharge, which some guests say creates confusion and pressure at the checkout.
One diner celebrating a birthday with 10 others only noticed the charge after paying a bill of more than A$1,400.
“I’ve no issue at all with leaving a tip when receiving great service,” the diner said. “The problem is that it leaves you with little to no choice in the matter. If you do see the sign, or spot it on the receipt … you have to actively seek for it to be removed. For a lot of consumers, especially in the current climate, that leaves you in an uncomfortable and vulnerable position.”
Industry defence
Wes Lambert, chief executive of the Australian Restaurant & Cafe Association, said the practice is legal and becoming more common.
“The ACCC requires restaurants and cafes to inform diners and consumers about any mandatory fees, such as weekend and public holiday surcharges, on top of standard menu prices before they order,” Lambert said.
“So in practice, that is how it is supposed to work, but oftentimes consumers might not read the fine print, and can certainly be surprised when it is added to the bill.”
Island Radio, owned by House Made Hospitality – also behind Tilda, Grana, and Bondi’s Etheus – defended the system.
“The optional 3 per cent gratuity … is designed to reward our team for their dedication and hard work,” a spokesperson said.
“It also serves to incentivise exceptional service and support increased tenure within our industry – at a time when experience is hard to find, and living costs are increasing. This surcharge is not mandatory and can be removed at any point, no questions asked nor judgement given.”
The group said the gratuities go directly to staff working that shift, including kitchen teams, via third-party software for transparency. Other House Made venues apply similar charges, with Tilda adding 7%, Etheus 5%, and others the same 3% model as Island Radio.
Shifting culture
The move has sparked concerns tipping is becoming the “new norm” in Australia, echoing practices in the US. On Reddit, one user said: “Please don’t let opt-out tipping become a thing. Let’s keep this kind of sneaky ‘gratuity’ out.”
Meanwhile, financial services firm Zeller reported that the average tip in 2024 jumped 25% year-on-year to A$25.20, with electronic payments making it easier for Australians to leave gratuities.
Lambert noted the discomfort stems less from the charge itself and more from the way it is presented. “Diners are used to adding a tip of their choosing at the end of the experience, if they felt the service and food was worth it,” he said.
Jonathan Jackson, 21st August 2025
