Journal · Eating out

Tips and tax when splitting a bill in the USA

Sales tax, tipping and large-group service charges in the US, with a worked three-way split.

Goldmend Money
2 min read

Three friends at a diner booth with a paper receipt on the table.

Visiting the US, or living there? Restaurant bills work differently from most of Asia. Menu prices do not include tax, and tipping is expected at sit-down restaurants.

Sales tax

Sales tax is added at the end, and the rate depends on the state and often the city. It can be zero in a few states and close to 10% in some cities. Your receipt shows the exact amount.

Tipping

At a table-service restaurant, a tip of around 15% to 20% of the pre-tax amount is common. Some receipts suggest amounts for you. Some restaurants add a service charge for large groups, often printed on the receipt. If they do, you usually do not tip again on top.

A worked example

Three friends have lunch. The food comes to US$80.00.

Sales tax at 8.875%: US$7.10
Tip at 18% of US$80: US$14.40
Total: US$101.50

Split equally, that is US$33.83 each, with one person adding the extra cent.

Tip on the pre-tax amount

Many people tip on the food total before tax. It is a small difference, but it keeps the maths clean and it is widely accepted.

Splitting by item

Work out each person's share of the food first. Then add their share of tax and tip in the same proportion. Someone whose meal was US$20 out of US$80 pays a quarter of the tax and a quarter of the tip.

Paying

Many restaurants will split the card payment if you ask early. Otherwise one person pays and the others send their share by Venmo, Zelle or a bank transfer.

With Perpax

Perpax, coming soon from Goldmend Money, will add tax and a tip of your choice, then split it any way you like, in US$ or your home currency.

General information, not financial or legal advice. Figures are examples. Check your receipt and official sources.

Next: Splitting the bill in Australia: no tipping pressure, but watch the surcharges