How can you tell if gratuity is included?
Read the check for a separate line that is already added into the total. The menu or the check will say whether you can remove it. A list of percentages next to a blank tip line is a suggestion. Publication 531 Example 2 treats whatever you write on that blank line as a tip.
What do common bill lines mean?
| Line as printed | What it is | A tip? | What to do | Source |
|---|---|---|---|---|
| Gratuity included, or auto-gratuity 18% for a party of 6 or more | A mandatory service charge | No | An extra amount is optional | IRS Revenue Ruling 2012-18, Example A; IRS tip page |
| Suggested tip 15% / 18% / 20%, blank tip line | A suggestion | Whatever you write | Write any amount, or nothing | IRS tip page and Publication 531 Example 2 |
| Service charge, a compulsory percent | A compulsory charge for service | No, under the FLSA | Ask what the charge covers before adding another full tip | DOL Fact Sheet #15 |
| Surcharge, kitchen, wellness, or employer-mandate fee | A mandatory fee, not a tip | No | In California, restaurant mandatory fees must be clearly and conspicuously displayed wherever prices are shown | California Attorney General, SB 478 |
| Prix service compris | Service is a required percentage already in the displayed price. A pourboire is optional | The pourboire only | No profession can demand a tip | DGCCRF, Pourboire |
| Discretionary or optional service charge | An optional add-on in Britain | Only if you pay it | VisitBritain says you can choose whether to pay | VisitBritain |
| No tip line in Japan | Tipping is not common at restaurants, cafes, bars, taxis, or hotels | No | See the Japan guide | JNTO |
The coperto, and Lazio's rule on a service component, are on the Italy guide, from Italia.it, the Italian education ministry, and Regional Law 22/2019. They are not in this table as a U.S. tax rule.
A required line is not a tip
The IRS page Tip recordkeeping and reporting says service charges added to a bill by the employer and distributed to an employee are not tips. The employer treats them as wages and includes them on Form W-2. The same page says a payment is a tip only if the customer voluntarily decides to pay it and determines the amount. Its examples of service charges include an automatic charge added to a bill, such as a mandatory 18% charge for large parties. If the restaurant adds that 18% and the customer voluntarily adds something more, only the additional voluntary amount is a tip.
Publication 531 says the same thing from the worker's side. Do not write a service charge in a tip diary when the employer adds it to the bill, pays it to you, and treats it as wages. Example 1 is an 18% charge for parties of six or more. The guest's bill includes that 18% on the tip line and in the total. Because the guest did not have an unrestricted right to determine the amount, the 18% is a service charge. It is wages, not a tip. Example 2 is the opposite: sample calculations of 15%, 18%, and 20% under a blank tip line. Because the guest can enter any amount or leave it blank, whatever they add is a tip.
The checkbox on this page is how you tell those two bills apart. Leave it checked when the menu or the check requires the line. The status then says a tip is not included. Uncheck it when the guest could have changed the amount or left it blank. The status then treats the line as a tip already chosen. The dollar math is the same either way: target percent of the subtotal, minus the line already printed. The label is what changes, because the IRS distinction is about whether the guest had to pay it.
A large-party example: subtotal $240, a required 18% line, target 20%. The required line is $43.20. Twenty percent of $240 is $48.00. The extra that brings the add-on up to 20% is $4.80. If the guest chooses to add that $4.80, the IRS pages above treat the $43.20 as a service charge and the $4.80 as a tip. Open the example: /gratuity-included-checker/?b=240&c=18&u=percent&r=1&t=20. The story of paying the 18% twice is in large parties. A server splitting the tips that were actually tips uses the tip-out calculator.
Gratuity checker FAQ
Is an automatic gratuity a tip?
Not when the customer has to pay it. The IRS tip recordkeeping page says service charges added to a bill by the employer, including a mandatory 18% charge for large parties, are not tips. A payment is a tip only if the customer voluntarily decides to pay it and determines the amount. Publication 531 uses the same 18% large-party example and says that charge is wages, not a tip diary entry.
What extra reaches my target percent?
The page takes your target percent of the subtotal and subtracts the service-charge line already on the bill. If the line is smaller, the difference is the extra on top. If you marked the line as required, that extra is the amount that would be a tip if the guest chooses to add it. The required line itself stays a service charge.
What if the bill only suggests 15, 18, and 20 percent?
The IRS tip recordkeeping page says suggested tip calculations are not service charges when the customer may choose any amount or leave the line blank. Uncheck the required box for that bill. The amount the guest writes is then treated as a tip.