Should You Tip if Gratuity Is Already Added?

Navigating dining bills can be confusing, especially when a “gratuity” charge is already included. Many consumers wonder if an additional tip is necessary. This article clarifies how to approach tipping when gratuity is part of your bill.

Understanding Gratuity

An “added gratuity,” or “service charge,” is a mandatory fee set by the establishment. Unlike a voluntary tip, it’s a fixed percentage, usually 15% to 20% of the bill. The Internal Revenue Service (IRS) classifies these as non-tip wages, meaning they are employer property and subject to payroll taxes. Businesses use these funds to compensate all staff, including servers, cooks, and dishwashers, for a more equitable structure.

Common Situations for Added Gratuity

Added gratuities are common for demanding service situations. Large dining parties, typically six or more people, often incur an automatic gratuity. This accounts for the increased time and effort required to serve larger groups, which can involve more complex orders and longer table occupancy.

Beyond restaurants, added gratuities or service charges are common in banquet events, private dining, cruise lines, all-inclusive resorts, and organized tours. These charges help businesses cover operational costs and provide a stable income for their service teams.

Deciding on Further Tipping

When gratuity is included, an additional tip is not required, as the service charge covers the service provided. Providing an extra amount is optional and depends on the service quality received. If the service was exceptional, an additional tip shows appreciation for outstanding effort.

The percentage of the included gratuity can also influence this decision. While many automatic gratuities fall within the 15% to 20% range, some might be lower, such as 18%. If the included amount is at the lower end of the customary tipping spectrum, and the service warranted it, some individuals choose to add a small amount to reach a higher percentage. The choice to tip further is personal, reflecting satisfaction and acknowledging staff efforts.

Methods for Adding More

For those who choose to provide an additional tip beyond the included gratuity, several practical methods are available. When paying with a credit card, you can typically write an extra amount on the “Tip” line of the receipt, then calculate and write the new “Total” amount before signing. It is generally recommended to calculate any additional tip based on the subtotal of the bill, before taxes and the initial service charge, as taxes do not go to the service staff.

Alternatively, leaving additional cash is a direct method that ensures the extra amount goes to the service staff immediately. This can be particularly appealing if you prefer that the additional funds bypass the establishment’s payroll processing and go directly to the individuals who provided the service. If the service was unsatisfactory, providing no additional tip is also a valid decision, as the included gratuity already covers the mandatory service charge.