Translation:How much should we tip?
"How much tip do we need to give?" seems like it should be acceptable too.
"How much do we tip?" is wrong. I'm not saying it's correct, but is there something wrong with my translation?
No. There is nothing wrong with your English here. It is just that the word 要 is in the Chinese sentence and Duolingo wants you to recognize that the character here means "should".
给 needs to be the verb in Chinese because 小费 is a noun, not a verb. However, in English, tip can be its own verb or it can be a noun. In other words, 给 is needed in Chinese, but "give" is not needed in English. In my experience, "tip" as a verb is much more common than "tip" as a noun paired with the verb "give".
Well, we (in the USA) commonly say "to leave a tip". So "tip" is often used as a noun.
It does make a big difference. 'How much we should tip' is a declarative sentence structure and a question mark in the end won't turn it into a question. Your answer is incorrect English.
Actually, "how much we should tip" is proper English and could be part of a question in such a sentence as "Are you asking how much we should tip?"
You need to switch your word order; "should we" not "we should" for a question. You'd be understood (like Yoda can be understood) but your sentence is not correct.