Automatic Gratuity, Service Charge, or Tip?
A receipt can show a service charge and still have a blank tip line. That does not tell you, by itself, where the charge goes or what the restaurant expects. Read the included charges first and ask a specific question before choosing any additional tip.
Three labels that need context
A voluntary tip is an amount the customer chooses. Automatic gratuity usually describes a charge already added by the restaurant. “Service charge” can describe a mandatory fee, but the label alone does not explain how the restaurant distributes it.
For U.S. federal employment-tax purposes, the IRS distinguishes voluntary tips from compulsory service charges, including automatic gratuities. The customer’s freedom to choose the payment and amount matters. See the IRS explanation of tips and service charges (checked September 8, 2026).
The U.S. Department of Labor also states that a compulsory service charge is not a tip under the Fair Labor Standards Act. That classification does not tell a diner that a particular restaurant gives the full charge to their server. See Fact Sheet 15 (checked September 8, 2026).
These sources concern U.S. federal rules. Local requirements and practices elsewhere can differ. This guide is a receipt-reading and arithmetic aid, not legal, tax, or employment advice.
Read an example receipt from top to bottom
| Receipt line | Amount |
|---|---|
| Food and drinks | $200.00 |
| Tax shown by restaurant | $16.00 |
| Service charge already added | $40.00 |
| Total before optional extra tip | $256.00 |
The $40 charge is already in $256. If you choose no additional tip, five equal shares are $51.20. If the group voluntarily adds another $10, the final total is $266 and five shares are $53.20.
Entering $256 and then adding a 20% tip would add $51.20, producing $307.20. That may be an intentional additional payment, but it is not the same as acknowledging the existing $40 charge. The example's tax is copied as a fixed receipt amount; it does not demonstrate whether a service charge is taxable in any jurisdiction.
Ask about the charge without assuming the answer
Try: “Does this charge go to staff, and is an additional tip expected?” If the answer is unclear, ask a manager for the restaurant's explanation. A menu disclosure, booking agreement, or written policy may help you understand what was added.
Do not assume “gratuity” means the exact employee payment you intended, or that “service fee” means employees receive nothing. Those conclusions require information about that restaurant. Likewise, a blank extra-tip line does not prove that the existing charge should be ignored.
Enter an already-complete total safely
- Check the restaurant total and included charges.
- In Split Bills Equally, enter the total you want to divide.
- Leave tax already included and choose No tip if you want no additional tip.
- If adding an extra amount, select a fixed tip and enter only that extra amount.
- Check the final total against the amount the group intends to pay.
The calculator has no dedicated service-charge input and cannot detect a charge from your receipt. For a person-based split, agree how to allocate the charge outside the tool. If you include assigned tax and fees inside each entered order total, use No added tax and a fixed extra tip if needed. The labels will then show those inclusive amounts as orders, so explain that to the group.
If a charge looks wrong
Ask the restaurant to explain or correct it before paying. Point to the line and the booking or menu information you were given. This guide cannot determine whether a disputed charge is enforceable in your location. Do not treat a calculator result as permission to remove an item from the bill unilaterally.
If the restaurant revises the total, use the revised receipt for every payment request. For choosing a percentage on an ordinary bill, read the tip calculation guide. For the choice of tax basis, use before-tax versus after-tax tipping.