How does a person calculate the amount of a tip?

Math and the Consumer’s Money Read more from
Chapter Everyday Math

A tip, or gratuity, is the money given to a person who performs a service for a customer, such as a waiter or waitress at a restaurant. Depending on the service, in the United States a 10 percent to 20 percent tip is usually left, with the most common being 15 percent, although many people have stories about the 0 percent tip they left after a bad experience. The tip is based on the total bill—the meal and the tax—although some people base the gratuity on just the meal. For example, if a meal at a restaurant costs a total of $10.00 (meal and taxes), a 15 percent tip would be $10 × 0.15 = $1.50. The tip is usually left at the table (or given to the waiter or waitress), or taken out by the establishment and added to a “tip pot” shared by all the wait staff.

There are some mathematical tricks to remember when leaving a tip at a restaurant, to a hairdresser, doorman, or in other appropriate circumstances. A good way to estimate a tip is to round the total bill to the most significant place value. For example, an $18.50 meal would round to $20. Next, move the decimal point of the rounded amount one place to the left ($20 to $2.00), or 10 percent of the total cost. Then divide this amount in half to determine 5 percent (or $2.00/2 = $1.00). Add the two resulting amounts to estimate 15 percent of the total—in this instance, $2.00 + $1.00 = $3.00 tip. (In reality, 15 percent of $18.50 is $2.78, which is close enough to $3.00.)

But remember, not ever country tips the same. Tipping is a way of life in Egypt, but taxi drivers don’t accept tips. French restaurants must add the tip to the bill by law, usually at 15 percent. Tipping in Australia is almost nonexistent; no one tips in mainland China (mainly because the government tacks on enough charges to visitors); there is no tipping in New Zealand, either, as the price usually includes services; and don’t even think about tipping in Japan (it’s almost an insult)!


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