Should You Tip Before or After Tax? The Clear Answer

It is one of the most common questions people ask at the end of a meal: should the tip be based on the subtotal, or on the final total that includes tax? The short answer is that traditional etiquette says to tip on the amount before tax. In practice, plenty of people tip on the total because it is simpler, and either choice is fine.

Why the pre-tax amount is the standard

A tip rewards the service you received: taking your order, bringing food and drinks, and looking after your table. Sales tax is a government charge on the purchase. It has nothing to do with how well you were served, so the classic rule is to leave it out of the tip calculation.

Most etiquette guides and many restaurant workers agree with this, and it is also how tip suggestions printed at the bottom of many paper receipts are calculated.

How much difference does it really make?

Less than most people expect. Here is a typical example:

The gap is $1.28. On a coffee or a quick lunch it is a matter of cents. Only on large bills, such as a group dinner or a celebration, does the difference become noticeable.

How to tip on the pre-tax amount with our calculator

1. Enter the full amount on the check in the tip calculator.
2. Tick "Tip on the pre-tax amount".
3. Type the tax amount shown on the receipt. The calculator takes it out before working out the tip, then adds everything back so the total you pay is correct.

When tipping on the total makes sense

• You want to keep it simple. One number, one calculation, and the server earns a little more.
• The receipt does not show tax separately, which is common in countries where tax is already included in menu prices.
• The service was excellent and you are happy to round up anyway.

What about discounts, coupons and comps?

This is where the general rule flips. If you used a coupon, a gift card or a promotion, or the restaurant took a dish off the bill, the usual advice is to tip on the original price before the discount. Your server carried the same plates and did the same work. The discount is from the restaurant, not from them.

The same goes for gift cards and loyalty points: they are just a different way of paying, so tip on the value of the meal.

Service charges and automatic gratuity

Read the check before you tip. Restaurants increasingly add one of the following:

• Automatic gratuity, often 18% to 20% for parties of six or more. This is the tip, so you do not need to add another unless you want to.
• Service charge or "kitchen appreciation" fee. Depending on the restaurant and local rules, this money may not go to your server. If you are unsure, ask.

Want to know how much of a bill was the service charge? Use the Remove Service Charge tab in our calculator to split a total back into its parts.

Watch out for tablet tip screens

Many card terminals calculate suggested tip percentages on the total including tax, and sometimes after other fees too. If you prefer to tip on the pre-tax amount, choose the custom tip option and enter your own figure. Our guide on how to calculate a tip shows how to work it out in a few seconds.

Bottom line: pre-tax is the etiquette, post-tax is perfectly acceptable, and the difference is usually small. What matters more is choosing a fair percentage for the service you received.