How to calculate tips

To calculate a tip, multiply the bill by the tip rate, then add the tip and any tax to get the total to split. On an $84 subtotal, a 20% tip is $16.80; with $7.56 tax the total is $108.36, or $27.09 each for four people. Whether to tip on the subtotal or the full bill, and how much, depends on local custom, so agree the rule before you split.

A restaurant bill has more than one number to consider: the pre-tax subtotal, tax, tip, and the number of people sharing the cost. A good tip calculation starts by checking the receipt and the local tipping customs, then makes the chosen rule clear to everyone at the table.

1. Check the receipt and local custom

Look for a service charge or gratuity that may already be included. Tipping customs differ by country, restaurant type, and service model, so a percentage that is normal in one location may not apply elsewhere. If a service charge is already present, ask the restaurant or group how they want to handle any additional tip.

2. Calculate the tip from the right base

Some groups tip on the pre-tax subtotal while others tip on the total receipt. Use the rule the group agrees on and apply it consistently. For a $84 subtotal and a 20% tip on the subtotal, the tip is $16.80. If tax is $7.56, the amount before splitting is $108.36.

3. Split the total equally when the group agrees

If four people share the meal equally, $108.36 divided by four is $27.09 per person. The SplitMyBills tip calculator can calculate the tip, tax, and per-person amount without manual arithmetic.

4. Use individual orders for an uneven split

Equal splitting is not always the fairest choice. If one person ordered a $12 meal and another ordered a $32 meal, ask whether the group wants each person to pay for their order plus a proportional share of tax and tip. The bill splitter does that sum: add each item, tick who had it, and tax and tip are shared by what each person ordered. In a shared group, use Split by item to save it as one expense, so the rule is visible rather than leaving one person to calculate it from memory.

5. Decide how to handle rounding

Cash and card payments may lead people to round to the nearest dollar. Agree on the rounding rule before collecting money. If a one-cent difference appears after dividing a total, assign the extra cent to one person or adjust the final payment so the group total still matches the receipt.

6. Save the final group balance

For a single dinner, the calculator may be enough. For a weekend away, recurring group meals, or friends who take turns paying, add the final amount to a shared group so the payer and participants remain clear.

7. Tipping abroad: see the cost in your own currency

On holiday, the receipt is in the local currency, but the question "is this a fair tip?" is easier to answer in your own. In the tip calculator, set the bill's currency ("Bill in JPY"), then switch the result to your home currency. It shows roughly what each person pays at today's rate. Card and cash-withdrawal fees aren't included, so treat it as a guide rather than the amount your bank will charge.

Tip calculation checklist

• Check whether a service charge is already included.
• Agree whether the tip is based on subtotal or total.
• Choose equal or item-based splitting before collecting money.
• Keep the rounding rule consistent.
• Abroad, check the per-person cost in your own currency.
• Use a shared group when the dinner is part of a larger group trip.

For a quick calculation, open the free tip calculator and bill splitter.

Travelling together? See how to split bills for a group vacation, and how to split a bill fairly for when equal shares don't fit.