The sneaky way restaurants may be quietly increasing your tip

Restaurants have traditionally depended on common social norms to shape how customers leave tips. However, the growing use of digital payment systems that automatically suggest gratuity amounts has sparked a new discussion: should tips be based on the bill before taxes or after taxes are added?

The issue recently gained attention after complaints surfaced about a Dave & Buster’s location where suggested tip amounts were reportedly calculated using the total bill after taxes. Fox News Digital contacted the Texas-based entertainment and restaurant chain for a response.

Although the incident triggered criticism online, restaurant owners and etiquette professionals say the broader question applies across the entire industry.

Several restaurant operators argue that tips should be calculated from the bill’s subtotal rather than the final amount that includes taxes.

Vicki Parmelee, who owns Jumby Bay Island Grill in Jupiter, Florida, said calculating gratuity after taxes amounts to charging customers twice.

Derek Simms, a restaurateur who runs several establishments in Frisco, Texas, agrees that tipping should be tied to the subtotal.

Simms said that when gratuities are added after taxes, customers often notice their bills are higher than expected.

He said more diners are beginning to question the totals they see, realizing something about the calculation does not seem right.

According to Simms, situations like this can damage a restaurant’s reputation. If customers feel misled about their bill, they are less likely to return.

He emphasized that repeat customers are essential to the survival of any restaurant.

The situation has also revived the wider conversation about tipping culture itself.

Lisa Burdette, founder and owner of the Dallas School of Etiquette in Texas, said tipping should be viewed as a voluntary gesture of appreciation.

While good etiquette encourages tipping, she explained, it is ultimately a personal choice rather than a requirement.

Burdette said the amount should reflect the quality of the service, including the server’s effort, attitude and attentiveness.

She suggests leaving between 15% and 20% of the pre-tax total for good service, and between 25% and 30% when the service is exceptional.

Gratuities, she noted, should be considered a bonus for strong service rather than an automatic entitlement.

Modern point-of-sale systems have complicated the issue. Many payment platforms now display recommended tip percentages, which are sometimes higher than what used to be standard. Customers may not always realize how those suggestions are calculated.

Parmelee said tipping expectations have steadily increased over time. In the past, an 18% tip was widely considered generous, but she now sees most diners leaving at least 20%.

To avoid confusion, some restaurants have decided not to display suggested gratuities on receipts at all.

Parmelee said her restaurant removed those recommendations because she believes tipping should always be earned rather than assumed.

Simms also believes customers should feel comfortable adjusting the amount they leave depending on their experience.

If service is only average, he said, diners should not feel pressured to tip the same amount they would for outstanding service. Leaving a smaller tip — or even none at all — remains the customer’s choice.

Restaurant owners also control how their payment systems calculate suggested tips. Parmelee said it is simple for operators to change the settings so percentages are based on the subtotal rather than the total after tax.

She added that many diners rely too heavily on whatever numbers appear on the payment screen instead of checking the math themselves.

Using a quick calculation in one’s head or on a phone can help customers confirm what they are actually paying.

Burdette said paying close attention to receipts is especially important as digital payment systems continue to evolve.

She advised diners to watch for preset tip amounts and to check the receipt carefully to avoid accidentally adding a second tip.

As tipping practices continue to change with new technology, restaurant owners and etiquette experts say transparency remains critical. The way gratuities are calculated can affect not only the final bill but also the level of trust customers have in the businesses they support.