Guides/Gratuity vs tip vs service charge

Gratuity vs tip vs service charge

On a check these words are related but not identical. Mixing them up can mean tipping twice — or leaving staff short.

Quick definitions

• Tip: optional extra you choose (often 15–20% in the US), usually for the server.
• Gratuity: often used as a synonym for tip; on large parties it may mean anautomatic tip the restaurant added (e.g. 18% for 6+ guests).
• Service charge: a fee the business adds (catering, delivery, “service included”). It may or may not go entirely to staff — ask if unclear.

What to pay

• If an auto-gratuity already appears, extra tip is optional, not expected at the same full rate.
• If only a service charge appears and the receipt says “gratuity not included,” tip on top as usual.
• Tax is usually calculated on food/drink; tip customs vary on whether you tip pre-tax or post-tax — follow local habit.

Worked examples

1. No auto tip: $80 food + 18% tip → tip = $14.40; total ≈ $94.40(before or after tax per your preference).
2. 18% auto-gratuity on $120: gratuity = $21.60 already on the bill. Adding another 18% would double-tip.
3. 10% service charge + tip: $100 + $10 service = $110; if tip is still expected, 15% of $100 = $15 → total $125 (check house policy).
4. Split four ways with 20% tip: $96 + $19.20 tip = $115.20 →$28.80 each. Seesplit a bill with tip.

Common mistakes

• Tipping a full 20% on top of an 18–20% auto-gratuity without reading the check.
• Assuming every “service charge” is a tip substitute.
• Using card-prompt percentages that already include tax when you meant pre-tax.

Calculate tip and splits

Try the freeTip Calculatorfor percent and per-person amounts. More context:how much to tipandmental tip math.