Restaurants have long relied on social etiquette to guide the way people tip.
But as digital payment systems increasingly suggest gratuities automatically, a new debate is emerging: Should those tips be calculated before or after tax?
The question has drawn attention following controversy at a Dave & Buster’s location, where suggested tips were reportedly applied to the post-tax total. Fox News Digital reached out to the Texas-based company for comment.
While the incident sparked online backlash, restaurant operators and etiquette experts say the issue goes far beyond any single brand.
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Two restaurant owners said tips should be calculated on the pre-tax amount — and not the total bill.
“Post-tax would be double-dipping,” Vicki Parmelee, owner of Jumby Bay Island Grill in Jupiter, Florida, told Fox News Digital.
Derek Simms, who operates multiple restaurants in Frisco, Texas, said a tip “should be on the subtotal.”
Adding a tip on top of tax can inflate the final bill in ways diners are increasingly noticing, Simms said.
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“A lot of people are starting to do that now,” he told Fox News Digital. “They’re starting to add it up like, ‘Hey, that didn’t feel right.’“
It can also carry real consequences for restaurants.
“And that’s ultimately what matters, because the customer feels frauded. And when the customer feels frauded, you’re going to lose business,” Simms said.
“They’re not going to come back to you. … Having people come back to you is the lifeblood of the restaurant.”
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The recent controversy also reignited the greater debate about tipping culture in general.
“Tipping is a gift — and while it is proper etiquette to always tip, it is not mandatory,” Lisa Burdette, founder and owner of the Dallas School of Etiquette in Texas, told Fox News Digital. “It is simply the right thing to do.”
Gratuities should reflect “effort, attitude and service” and not be treated as an automatic charge, Burdette said.
She recommended 15% to 20% for good service and 25% to 30% for exceptional service, “pre-tax.”
“Tipping is a discretionary bonus for good service and is not a mandatory right,” she said.
The rise of point-of-sale (POS) systems has complicated those traditional norms.
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Many platforms now present suggested tip amounts — often at higher percentages than in the past — and customers may not always realize how those figures are calculated.
“They have crept up,” said Parmelee. “Eighteen percent used to be an industry standard good tip. Now I see the majority of restaurant-goers never tip below 20%.”
Some restaurants, including hers, avoid the issue by removing suggested tips entirely.
“We have opted out of including ‘suggested tip’ amounts on our guest receipts,” she said. “We are of the old-school mindset when it comes to tipping. It should be earned and never expected.”
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Customers need to be “a little more self-confident” about the tip they leave, Simms said, especially if the service is underwhelming.
“‘You know what? I’m not going to complain about it. I’m just going to give them less of a tip,'” Simms said. “‘They didn’t do a great job. It wasn’t awful, wasn’t great, so I’m going to give them what’s due — 10%, 12%.’ You can do that. It’s optional, right? You don’t have to give the tip. It’s expected, but it’s 100% optional. They can give zero tip.”
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Operators have full control over how a restaurant’s payment systems are configured, Parmelee said.
“It is very easy to change and to set the percentage calculations on our POS system,” she said. “I know that any restaurant operator could call POS tech support to have it done for them.”
Diners also tend to rely heavily on the technology in front of them, Parmelee added.
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“But we should truly make the effort and do the math in your head or use your cellphone calculator,” she said.
Awareness is key — especially as payment systems evolve, Burdette said.
“Be mindful when you see a preset tip in a restaurant, pay attention to the blank line on the receipt and do not tip twice,” Burdette said.
As tipping practices continue to shift, transparency matters, Parmelee and Simms agreed.
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Whether calculated by hand or suggested on a screen, how a tip is determined can shape not only the final bill — but also the trust between restaurants and their customers.
