Receipt and fee decision guide
Service Charge vs Tip
Classify an included charge, compare it with your intended gratuity and calculate any additional voluntary amount without assuming how the fee is distributed.
Check an included charge
Service charge, automatic gratuity and voluntary tip
Voluntary tip
The customer decides whether to pay it and usually controls the amount. Under U.S. federal guidance, voluntariness is central to classification as a tip.
Automatic gratuity
A mandatory percentage added by the business is compulsory even when the receipt uses the word “gratuity.”
Service charge
A compulsory fee belongs to the business’s billing policy. Do not assume it reaches staff in the same manner as a voluntary tip.
The calculator can perform the arithmetic, but only the venue can explain how a particular fee is distributed and whether an extra tip is expected.
Receipt-check workflow
- Find the exact label and amount.
- Determine whether the charge can be removed or changed without consequence.
- Ask the venue whether it replaces gratuity and how it is distributed.
- Choose whether to count it toward your personal target.
- Add only the positive difference when that is your intention.
Common receipt labels
| Label | What it may mean | Best next action |
|---|---|---|
| Automatic gratuity | Mandatory percentage, often for groups | Check whether an additional voluntary tip is expected |
| Service charge | Compulsory business fee | Ask how it is distributed |
| Hospitality fee | Business-defined compulsory charge | Do not assume it is a tip |
| Tip / gratuity line | May be voluntary when left blank or editable | Enter only the amount you choose |
Explore the Tip Calculator resource cluster
Use the pillar, calculators and decision guides as one connected system.
Core pillar and calculators4 links
Decision and formula guides3 links
Related calculators and guides
Continue with the most relevant next step.
Frequently asked questions
Is a service charge legally the same as a tip?
Not under U.S. federal wage and tax guidance when the charge is compulsory. Mandatory service charges are treated differently from voluntary tips.
Is automatic gratuity already a tip?
It may serve a similar practical purpose, but a mandatory automatic gratuity is compulsory rather than voluntary.
Should I add another 20% after an 18% gratuity?
Not automatically. Decide your intended total gratuity and add only the difference if you choose to count the included amount toward that target.
Does a service charge go to the server?
The answer depends on the business policy and applicable law. Ask the venue rather than assuming.
What if the receipt wording is unclear?
Treat the classification as unknown, ask the venue, and avoid making a distribution claim that the receipt does not support.
Methodology and sources
For U.S. federal purposes, the IRS and Department of Labor distinguish compulsory charges from voluntary tips. Local law and venue policy can add further rules.