If you have gone out to eat at a restaurant or ordered food delivery in recent months, you may have noticed a new charge called a service charge on your bill. This service charge is automatically added, is non-negotiable, and can be a flat charge or a percentage of the total bill. Typically, there is also an option to provide a tip on the bill, leading many people to wonder whether they should tip when a service charge is included. Here’s what you should know when making that decision.
What Is a Service Charge?
While service charges have been around for a long time, they became much more prevalent at restaurants during and after the pandemic. Some restaurants adopted service charges to recoup the cost of some pandemic-era regulations, while others adopted the charges to offer more wage stability to their staff. The charge is added to every bill and is often equals about 18% to 22% of the total bill.
It is important to note that unlike tips, the restaurant is not required to give the entire amount to the server who waited on you. In fact, the restaurants can technically use those funds for whatever they want to use them for, whether that is recouping some of their costs or sharing the amount out to both front-of-house and back-of-house staff. However, in many states, if the money from this charge is not going directly to the waiter or waitress, the restaurant must notify patrons of this, typically through a disclaimer on their menu.
It is the same for meal delivery companies. The service charges they require rarely go to the person making the delivery and are more likely to go towards the operation of the delivery company. This is why there is an additional line to add a specific tip for the delivery person.
When To Tip When a Service Charge Is Included
The decision of whether to tip when a service charge is included in the bill is a personal one. Most restaurants do not expect patrons to provide an additional tip when a service charge is included, but the wait staff may still be depending on their tips to make ends meet. A good rule of thumb is if good service is provided by a waiter or waitress, a gratuity for their efforts should be given. Many diners do still provide a tip of at least 10% of the bill despite the restaurant also charging a service charge for dining at the restaurant.
For food delivery drivers, a tip should always be added, as delivery company service charges are rarely intended for the delivery driver. However, adding a tip to the other fees delivery companies automatically charge can increase the price of the order to nearly double what the customer would have paid if they had ordered directly from the restaurant and picked up the food themselves. Make sure you know what you are paying for and where that money is going before you make your decision on whether to tip when a service charge is included.
What do you think about service charges being added to restaurant bills? Tell us in the comments below!
Toi Williams began her writing career in 2003 as a copywriter and editor and has authored hundreds of articles on numerous topics for a wide variety of companies. During her professional experience in the fields of Finance, Real Estate, and Law, she has obtained a broad understanding of these industries and brings this knowledge to her work as a writer.