8.1.18 Leaving a Tip
If you go out to eat, you know that it is customary to leave a tip (gratuity) for the server based on the amount of your bill. 15% is considered typical, although many people agree that if you enjoyed the service, a tip of 20% is appropriate. [ Did you know that most U.S. wait staff are paid less than minimum wage, and that the main portion of their income comes from tips? They are also required to pay income tax on the gratuity they receive. ]
How do you figure out how much to give as a tip? This video helps you to learn how to calculate a standard 15% tip quickly:
Watch the video and then review your knowledge in the next activity.
Activity: Leaving a Tip
Imagine you are at a restaurant, and you pay your bill with your debit card. You decide to tip about 15% on the $41.68 bill (which already included sales tax).
You have many methods now to arrive at 15% of about $41.68. Can you do it with the method from the video? Don’t hesitate to make a rounded estimate to get started.
If you decide to round the $41.68 differently from this sample solution, you may arrive at a slightly different overall amount. But, since you are not required to leave exactly 15% in tip, other results can be correct. To avoid mistakes, make sure the answer is reasonable. It is your decision whether you calculate the tip based on the entire bill amount or just on the cost of the food and not on the sales tax.
$41.68 can be rounded up to $42.00. Dividing by 10 gives you 10% of $42.00, which is $4.20. Multiplying by 2 creates 20% being $8.40. Did you catch what he did next? He is taking the average of the sum of these two dollar amounts. He can do this because the average of 10% and 20% is .
Now do it with the money: .
The standard tip (15%) is about $6.30, and the total amount would be about $48.30. In such a situation, you probably will consider to round up to $49.00 or even $50.00 if the service was good (the latter coming close to a more generous 20% in gratuity).
If the averaging arithmetic is a little tricky, you can round the sums before doing it. For example, round $4.20 to $4 and $8.40 to $8. It’s easier to see that the average of those is , which is still reasonable for a tip.