How to Calculate a Gratuity (Tip) at a Restaurant or Bar


Most people are familiar with the "15-20% convention" for tipping at a restaurant or bar, but sometimes customers have difficulty actually computing an appropriate tip when the bill comes. When this happens, customers can sometimes inadvertently leave a very small tip only to realize it later and feel bad, or sometimes customers get flustered (especially if drunk) and leave what works out to be an unnecessarily huge tip.

This article shows you the steps to easily calculate an appropriate tip at a restaurant or bar. It involves a tiny bit of math, but I've tried to make it as simple as possible and provide examples.

  • First of all, for better or for worse, it is customary in America to leave between a 15-20% tip for a waiter, waitress, or bartender. If you aren't happy with the service you received, it is really in your best interest to just leave 15% and never return. You're not punishing or teaching your server a lesson by leaving less that that or nothing at all. S/he will either think you are stingy, or forgot, or that you just did the math wrong.

  • A tip is traditionally computed based on the subtotal of your bill, before tax. Some restaurants are trying to change that convention by adding a "tip guide" below your bill, which shows pre-calculated tips of 15, 18, and 20%, but based on your grand total including tax. While one could argue that it's not a big deal, by using those amounts you will be leaving a tip that is somewhat higher than what you intended, depending on your local tax rate.

  • One easy solution to leaving an appropriate tip is to carry a tip chart in your wallet, and discreetly use it. You look up the subtotal on the chart, and then take note of the corresponding tip for the percentage that you want to leave. Typically these charts will have columns for 15% and 20%. It is usually best to round the tip up to the nearest dollar, unless it is something like $5.03 and you feel that $6 is too much.

  • If you don't want to use a tip chart (admittedly they are a bit tacky), here is one way of calculating the tip. It is very easy to calculate 10% of the subtotal. Just move the decimal point one place to the left. For example, 10% of $42.89 is $4.29 (rounding). 20% is twice that, giving us about $8.60 (rounding). If you want to leave 20%, you could just leave that amount, probably rounding up or down to the nearest dollar as you see fit. If you wanted to leave 15%, you'll have to leave the midpoint of the 10% and 20% figures. In this case that's about $6.40, and you'd probably want to round up to $7 so that you don't go under 15%.

  • Keep in mind that on a subtotal like the one above, 1% is $0.42 (moving the decimal to the left twice). That means that rounding up or down the nearest dollar can end up adding or subtracting as much as 1% or 2% to the tip. On a large bill of over $200, rounding up or down to the nearest dollar will not have that same effect, as far as percent.

  • Usually you can't go wrong with computing 10%, doubling that, and then rounding up or down to the nearest dollar. Another thing you can do is compute the tip based on the sales tax rate in your county. If the sales tax rate is 6.5%, one option is to triple the sales tax, which is 19.5%. Again, you would round up or down to the nearest dollar as you see fit. If the sales tax was about 8.4%, you might double it for 16.8%, then round up, and then add on an extra $1-$5 depending on how high the bill is.

  • Be very careful with the above when traveling out of town. If you live in a county where doubling the subtotal and rounding up results in a moderate tip, and then you do that in a county that has a 5% tax rate, you're going to end up leaving about a 10% tip, when you thought you were leaving around 17%.

  • Even if your bill is very low, such as a $4 breakfast special, don't ever leave less than a $1 tip. The same is true for a bartender who may have served you a $3 drink special. An exception might be if you ordered nothing but a single cup of coffee at a counter, and didn't ask for anything else at all.

  • If you are drinking during happy hour when the drinks are greatly discounted, or if you are eating at an early-bird special where the restaurant is offering a multi-course meal at a very low price, consider being extra generous and computing your tip as though you were ordering your food and drinks at the regular prices. Your waiter, waitress, or bartender is working just as hard as they would be otherwise.

  • Remember, wait staff and bartenders work very hard, and many people give them lots of grief. Being extra generous is a nice way of brightening up their day. Of course it is even more important to be extra generous if you plan on returning to the establishment. Cheers!

Tips & Warnings

  • If your wife asks why you're leaving such a high tip for the waitress, don't say it's because she (the latter) is cute, or has some other physical attribute that is to your liking. Blame it on an error in arithmetic, and not having had the chance to read the steps in this article.
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