How do you calculate a tip in your head?
Move the decimal one place left to get 10%, then build from there. On a $62.40 bill, 10% is $6.24. Double it for 20%, or add half again for 15%.
- For 10%: move the decimal point one place to the left.
- For 20%: double that number.
- For 15%: take the 10% figure and add half of it.
- For 25%: take a quarter of the bill, or 20% plus half of the 10% figure.
The formula behind the calculator is the same arithmetic, worked to the cent:
Tip = bill × tip percent ÷ 100How much is a 15%, 18%, 20%, or 25% tip?
| Bill | 15% | 18% | 20% | 25% |
|---|---|---|---|---|
| $20.00 | $3.00 | $3.60 | $4.00 | $5.00 |
| $40.00 | $6.00 | $7.20 | $8.00 | $10.00 |
| $60.00 | $9.00 | $10.80 | $12.00 | $15.00 |
| $80.00 | $12.00 | $14.40 | $16.00 | $20.00 |
| $100.00 | $15.00 | $18.00 | $20.00 | $25.00 |
| $150.00 | $22.50 | $27.00 | $30.00 | $37.50 |
| $200.00 | $30.00 | $36.00 | $40.00 | $50.00 |
There is no legal tip rate. Customs differ by place, by the kind of service, and by who you ask, so these are arithmetic rather than a recommendation.
Should you tip on the pre-tax or after-tax amount?
Either is a personal choice, and the difference is small. On a $108.25 bill that includes $8.25 of tax, a 20% tip is $21.65 on the full amount and $20.00 on the pre-tax amount. To use the pre-tax amount, enter the tax from your receipt under More options.
One thing does matter on a discounted bill: if a coupon or gift card reduced what you paid, the person serving you still did the same work. Some people tip on the amount before the discount for that reason, and you can enter that figure as the bill.
How do you split a bill with a tip between friends?
Add the tip first, then divide. A $340 dinner for six with an 18% tip and each share rounded up to a whole dollar comes to $67.00 each, which makes the real tip 18.2%.
Without rounding, the calculator rounds each share up to the cent, because a total rarely divides evenly. A $100 bill among three people is $33.34 each, not $33.33, so the bill is covered. That can leave a few extra cents for the server.
An even split is only fair if everyone ordered about the same. If orders differ a lot, work out each person’s subtotal first and run the calculator for each one.
How do you pick a tip that makes the total a round number?
Decide on the total first, then subtract the bill. On a $47.30 bill, a 20% tip is $9.46, for $56.76. Paying $60 even means a tip of $12.70, which is 26.8% of the bill.
To see this with a group, switch on rounding. Each person then pays a whole dollar, and the calculator shows what the real tip percentage became. It’s a useful check, because rounding up in a large group can add more than you expect.
How much does tipping add up to over a year?
More than a single receipt suggests. As an example, 6 meals a month at $60.00 comes to these yearly tip totals:
| Tip rate | Per meal | Per year |
|---|---|---|
| 15% | $9.00 | $648.00 |
| 18% | $10.80 | $777.60 |
| 20% | $12.00 | $864.00 |
| 25% | $15.00 | $1,080.00 |
That is a reason to include tips when you plan a dining budget, rather than counting only menu prices. The budget calculator lets you list dining out as its own line, so you can see it against the rest of your spending. It isn’t an argument for tipping less, just for planning on the real cost of going out.
Check the receipt before you tip twice
Look for "gratuity", "service charge", or "auto-grat" on the bill. Restaurants sometimes add one, especially for large groups. If it is already there, you may not want to add a full tip on top.
The IRS treats a voluntary tip and a required service charge differently. A tip is the customer’s free choice. An automatic charge generally counts as wages rather than tips, and the IRS lists the factors in Revenue Ruling 2012-18. That matters to the worker’s pay, and it is why asking how a charge is shared can be a fair question.
This also shows up on card readers. The percentages a screen suggests are chosen by the business and may be worked out on a total that already includes tax. You can always enter a custom amount.
Common questions
What is 20% of a $50 bill?
$10.00, which makes the total $60.00.
What is a good tip percentage?
There is no official answer. It depends on the service, the place, and local custom. This tool does the arithmetic for whichever percentage you choose.
Is a tip taxable for the person who receives it?
Yes, tips count as income, and employees must report them. The IRS explains the rules in its tip recordkeeping guidance. Federal rules on deductions for tips changed recently, so workers should check current IRS guidance or a tax professional.
How do I tip when paying with a gift card or coupon?
Enter the bill before the discount if you want to tip on the full value of the meal. That amount is a personal choice.
Why does each share not add up exactly to the total?
Shares are rounded up to the cent so the bill is always covered. In a group, that can add a few cents over the total.
Sources
- Tip recordkeeping and reporting · Internal Revenue Service
- Topic no. 761, Tips: Withholding and reporting · Internal Revenue Service
- Revenue Ruling 2012-18: tips and service charges · Internal Revenue Service