Tip vs. Service Charge

Quick definitions

• Tip / gratuity: a discretionary amount paid by you, on top of the bill, that goes to the worker who served you.
• Service charge: a mandatory fee added by the business, paid to the business. It may or may not be distributed to staff.
• Auto-gratuity: a mandatory gratuity (commonly 18–20%) added to large-party bills. Usually distributed to staff.

How to tell what's on your bill

Look for explicit wording:

• "20% gratuity included" → goes to staff. No additional tip required.
• "18% service charge" → goes to the venue. Often does not reach servers. Ask before adding a tip on top.
• "Suggested tip: 18% / 20% / 25%" → suggestion only. You choose.

When in doubt — ask

"Does the service charge go to the staff?" Most servers and front-of-house staff will give you a straight answer. If the charge does go to the staff, no additional tip is required. If it does not, a 15–20% tip on top is standard.

Common situations

• Large party at a restaurant: 18–20% auto-gratuity is common for 6+ people; it goes to staff and no extra tip is required.
• Resort or hotel restaurant: a "resort service charge" may be on the bill; check if it covers gratuity.
• Catering: 18–22% service charge is the norm; verify with the venue whether it's distributed.
• Delivery apps: the "service fee" is the platform's cut, not the driver's tip. Tip separately in-app.