Do You Tip Before or After Tax? (Pre- or Post-Tax Total?)

Tipping is a time-honored social custom in the US and in many other countries around the globe, a small addition to a bill, capable of making what can be an incredibly tough job a little more bearable for the servers.

Many workers in the service industry are paid below minimum rates, so in a lot of cases, they’re relying on customer tips just to pay the bills and enjoy anything remotely akin to a stable lifestyle, making it an important aspect of our culture.

The total amount offered as gratuity is defined by the customer and is not a legal requirement, but that’s not to say that there are no guidelines whatsoever.

Do You Tip Before or After Tax? (Pre- or Post-Tax Total?)

There is an accepted etiquette to tipping that you should follow to avoid offending your server, but as they’re not enshrined in law, the “rules” aren’t all that well known, and there still exists a lot of tip-based confusion and anxiety when the bill arrives at a table.

One of the most common queries when it comes to tipping is whether the customer should tip a certain percentage of the bill pre-tax, or the full post-bill tax, so let’s answer the question now, once and for all.

Should I Tip Before or After Tax?

In terms of etiquette, it’s perfectly fine to tip before tax, as the tax has nothing to do with the service provided by the waiting staff and the restaurant. You will not be vilified for doing so, as this is considered standard procedure.

However, as the subtotal, the eyes of customers are initially drawn to the bill after tax at the bottom of the slip, and will often just pay the excess for efficiency’s sake.

What’s more, the difference the tax makes really doesn’t hit the wallet all that hard, especially if you had a relatively inexpensive dining experience.

Some customers like to tip the extra just to make sure the server knows that they appreciate the effort they put into making their morning, afternoon, or evening a good one.

Even in cities with sizable tax rates, such as D.C., you’re only looking at something to the tune of 10% on top of the bill. Break that down into the percentage of the gratuity, and the difference between a pre- and post-tax tip is fairly negligible.

Unless you’re completely strapped for cash, it’s always pleasant to tip based on the full bill. 

What Percentage Should I Pay As a Tip?

The percentage of your tip should be based on the quality of service you received and the food and drinks you consumed, but as a general rule of thumb, it should never be below 15%. The customs are as follows…

  • 15% — Average service
  • 20% — Above average service
  • 20% + — Excellent service or if you’re just feeling generous

So, let’s say you had okay service… not amazing, not bad, and the bill came to an even $100 before tax. Your 15% tip would be $15, but just to illustrate how little impact the tax increase has on your finances, let’s work it out after tax as well.

$100 after, say, 10% tax would be $110, and 15% of $110 is $16.50, so you only stand to lose $1.50, which is likely unimportant to you, but could mean quite a lot to your server and their supporting staff.

Now let’s say the service was above average, and you wanted to tip the full 20%. That makes your pre-tax tip $20, and your post-tax tip $22. Two dollars really isn’t all that much in the grand scheme of things, especially if you’re splitting the tip evenly between everyone at the table.

Granted, if you eat out a lot, those two dollars can add up, but chances are, if you have the money to eat out all the time, you can afford to tip after tax.

What About Service Charges

As people in larger groups tend not to tip (or not as much anyway), some restaurants impose a service tax on the bill for tables upwards of six people, so it’s often a good idea to ask about service charges when you’re seated. It’s nice to be generous, but most of the time you won’t want to pay twice the going rate.

The percentage of this mandatory tip fluctuates from establishment to establishment, but 18% seems to be a common figure, as it falls between the minimum and fair standards.

In some states, mandatory service charges are taxable, which means the 18% will be based on the pre-tax figure, saving you a very small amount of money.

If you frequent a restaurant and that does not include a service charge in the bill, always make sure to rally around your co-diners to provide a sufficient tip for the service, as it’s only fair, especially if you had good food and a good time.

When Shouldn’t I Tip?

Considering, eateries in many states can legally pay their staff $2.13 an hour, I think it’s fair to say you should always tip. Even if you believe you had relatively poor service, docking the tip or not leaving one at all doesn’t really solve the problem.

Instead, leave the standard 15% tip, then ask to speak to the manager. As the senior member of staff, they need to know what the issues with your experience were, so they can give their co-workers more training.

Furthermore, a good time is a remarkably fragile thing. It only takes one less-than-stellar aspect of dining out to sour the whole experience. For example, perhaps your host was amazing, but the supporting staff were a little rough around the edges, or maybe it was the other way around.

By refusing to tip one aspect of the evening, you punish all the members of staff involved, which isn’t fair at all.

Do You Tip Before or After Tax (Pre- or Post-Tax Total?) — Summing Up

There’s your answer, folks — as tax is unrelated to the service you are provided when you dine out, you’re not obliged to pay gratuity based on the post-tax figure. However, the difference between pre- and post-tax tips is so infinitesimally small, it’s not really worth worrying about.

With this query answered, you can say goodbye to those pre-tip jitters, and simply enjoy the experience of dining out.

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