Most people tip on the wrong number. The fix is simple: calculate your tip on the pre-tax subtotal, not the total after sales tax — and know which percentage actually matches the service you received.
Why the pre-tax subtotal matters
Say your bill is $84.00 with $7.00 in sales tax, for a total of $91.00. If you tip 20% on the $91.00 total, you're paying a $18.20 tip. Tip 20% on the correct $84.00 subtotal instead, and the tip is $16.80 — a $1.40 difference. It seems small per meal, but tipping on the post-tax total consistently overpays by roughly the local tax rate (often 5-10%) on every single bill.
Standard tipping rates by service type
- Sit-down restaurant, average service: 15-18%
- Sit-down restaurant, great service: 20-25%
- Bartenders: $1-2 per drink, or 15-20% of the tab
- Food delivery: 15-20%, or a flat $5+ for short trips
- Takeout/counter service: 0-10%, optional
- Hair stylists/barbers: 15-20%
- Taxi/rideshare: 10-15%
A worked example
Dinner for two comes to $96.00 before tax. Local sales tax is 8%, adding $7.68, for a total bill of $103.68. Service was good, so you tip 20%:
- Subtotal: $96.00
- Tip (20% of subtotal): $19.20
- Tax: $7.68
- Final total: $122.88
Compare that to tipping 20% on the post-tax total ($103.68), which would add $20.74 — almost a dollar and a half more than necessary.
Splitting the bill fairly
For groups splitting evenly, calculate the tip on the subtotal first, then divide the grand total (subtotal + tax + tip) by the number of people. For groups splitting by what each person ordered, have each person tip 18-20% of their own item total before tax, then add their share of the tax.
When to tip above the standard rate
Bump your tip above the standard range when: the server handled a large or complicated group order well, it's a holiday or late-night shift, the restaurant was understaffed and the server still kept pace, or you camped at the table for hours during a busy period. None of these are obligations, but they're common reasons people tip 22-25% instead of the baseline 18%.
Calculate it instantly
Skip the mental math and avoid the post-tax mistake entirely. Use the Tip Calculator to get the exact tip and per-person split for any bill.