"Suggested Gratuity" Calculations Can Incorrectly Include Tax

Whether your standard tipping policy is 10%, 15%, or 20%, the calculation is supposed to made on the bill’s subtotal before tax. After all, the taxman didn’t have a pleasant pairing suggestion or crack a wry joke. But at the bottom of some restaurant bills, the “suggested gratuity” included “for your convenience” is sometimes wrong, making the calculation after sales tax is added. Reader Mark spotted two of these recently.

He writes:

One receipt I received from Blue Palms Brew House (attached) provides 15%, 18%, and 20% gratuity calculations, but they are incorrectly based off of the total due, which includes tax. Another receipt from The Counter (attached) provides the same percentage breakdown, but I can’t figure out their math. Using the subtotal of \$31.00, 15% would only be \$4.65 and not \$4.81. From the total of \$34.02, 15% would be \$5.10 so they seem to be calculating the gratuity off of \$32.05, a seemingly arbitrary amount between the subtotal and total.

While some folks might object to the suggested gratuity in the first place, “I personally don’t mind them,” writes Mark, “so long as they are accurate at least.”

It’s not hard to figure out in your head anyway. If you’re not good at percentages, for 15% you can just take 10% and then take half of that number and add it together. For 20%, just take 10% and then double it.