Service charge vs tip, and what 'gratuity included' means
Quick answer
A tip is money a customer chooses to give, in an amount the customer chooses. A service charge is a fee the restaurant sets and adds to the check, so it is part of the bill. When a check says 'gratuity included' or lists a service charge, that amount is already in the total, and a second tip on top is optional.
Key points
- A tip is the customer's choice, both whether to give it and how much. A service charge is a fee the restaurant sets and adds to the check.
- Cambridge Dictionary lists tip as a synonym of gratuity. On a check, 'gratuity included' means the restaurant has already added an amount.
- On $148.00 of food with 8% tax and a 20% service charge, the check is $189.44, or $47.36 each for four people.
- A second 20% tip on top brings the check to $219.04 and each share to $54.76. Adding it is a choice, not a missing step.
On this page
What is the difference between a service charge and a tip?
A tip is the customer’s choice, and a service charge is the restaurant’s fee. As of October 2026, the Department of Labor’s wage regulations define a tip as “a sum presented by a customer as a gift or gratuity in recognition of some service performed for the customer.” They add: “Whether a tip is to be given, and its amount, are matters determined solely by the customer.” The same regulations say that a compulsory charge for service, such as 15 percent of the amount of the bill, imposed by the establishment, “is not a tip.” Those are wage rules, so they define the words and say nothing about what you should pay.
The three words fit together like this:
- Tip. Money you decide to give, in the amount you decide. It is not on the check until you write it there.
- Gratuity. Cambridge Dictionary defines it as “a small amount of money for someone who has provided you with a service, in addition to the official amount and for their personal use”, and lists tip as a synonym.
- Service charge. Cambridge defines it as “an amount of money added to the basic price of something to pay for the cost of dealing with the customer.” The restaurant sets it and prints it on the check.
What does “gratuity included” mean on a check?
It means the restaurant has already added an amount to the total, so you pay it with the check. Cambridge’s entry for service gives the example sentence “There is a ten percent service charge included in the bill.” Whatever the line is called (gratuity, auto gratuity or service charge), the test is the same: it is in the total.
Say four friends order $148.00 of food. Tax at 8 percent is $11.84, and the restaurant adds a 20 percent service charge on the food, which is $29.60. The check comes to $189.44, so each person owes $47.36.
If every person also writes a 20 percent tip on the card slip, the table adds another $29.60. The total becomes $219.04 and each share becomes $54.76, which is $7.40 more per person. Emily Post lists 15 to 20 percent of the pre-tax amount for sit-down wait service, so a 20 percent charge already reaches the top of that range.
Check the total before anyone writes on the slip. The pre-tax and post-tax question is covered in tip on pre-tax or post-tax, and checks for big tables have their own page on automatic gratuity for large parties.
How do you split a check with a service charge in EvenOut?
Enter the whole check as one expense, $189.44, paid by whoever used their card. Choosing “Equally” in the split picker reads “$47.36 each · 4 people”. If orders differ, choose “By item” and add each dish with the people who had it. Put the tax and the service charge in as items too, so the items add up to the check total and the pill reads “All assigned”.
For other totals and tax rates, the split bill calculator with tax and tip does the arithmetic.
Frequently asked questions
How can you tell whether a tip is already on the check?
Add up the lines. In the example, $148.00 of food plus $11.84 of tax is $159.84. The total is $189.44, which is $29.60 more, and the extra line is the service charge. If the total equals food plus tax, nothing has been added.
What if the check prints suggested tip amounts at the bottom?
A printed row of amounts at 15, 18 and 20 percent is a suggestion. Only a line that is already added into the total is a charge, so read the total line and check whether it includes one before you write anything on the card slip.
What if only one person wants to leave extra?
Let that person add it alone, on their own slip or in cash, so it stays out of the split. If the table agrees to share it, enter it as a second expense: $8.00 split equally across four people is $2.00 each.
Sources
Checked October 6, 2026.
Keep reading
- Guide Automatic gratuity on large parties: how to split it When the check already has 18% gratuity for a large party, read the line, split it across 8 people three ways, and decide whether extra is needed.
- Guide Tip on the pre-tax or post-tax amount? The math Emily Post says to tip on the pre-tax amount. Tipping on the total adds the tip rate times the tax. See the gap for five tax rates and three check sizes.
- Calculator Split bill calculator with tax, tip and discount Enter the subtotal, discount, tax and tip to split one bill equally. See the tip on the pre-tax and post-tax amount side by side, to the cent.
- Guide How to split a restaurant bill: 4 fair methods Four ways to split a restaurant bill, run on one $184 check for five people, with each person's total, when each method is fair and what to say before ordering.