Work out the tip on the pre-tax bill (or the total), add tax and split the check evenly – with each share rounded up to a whole dollar if you like.
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With bill before tax $120, tax on the receipt $9.6, tip 20%, people paying 4, tip on: pre-tax bill (etiquette standard):
Each person pays $38.40 (round up: $39)
Tip $24.00 · total $153.60 split 4 ways
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Tip = (pre-tax bill, or bill + tax) × tip %. Total = bill + tax + tip. Each share = total ÷ people.
20% tip on the pre-tax bill, 8% sales tax, split evenly:
| Bill before tax (8% tax) | People | 20% tip | Each pays | Extra if you tip on the total |
|---|---|---|---|---|
| $40 | 2 | $8.00 | $25.60 | $0.64 |
| $80 | 2 | $16.00 | $51.20 | $1.28 |
| $120 | 4 | $24.00 | $38.40 | $1.92 |
| $240 | 6 | $48.00 | $51.20 | $3.84 |
| $400 | 8 | $80.00 | $64.00 | $6.40 |
Tipping on the total instead of the subtotal adds 8% of the tip – small on a $40 lunch, a few dollars on a group dinner.
Etiquette guides say before tax, because tax goes to the government. Card terminals often suggest tips on the total, which costs a little more.
15–20% of the pre-tax bill is usual for table service, with 20% now common in cities. Counter service and takeout tips are optional.
An even split is unfair then. Run that person's items on their own and split the rest.
Move the decimal one place left for 10% and double it. On $64, 10% is $6.40, so 20% is $12.80.
Yes. Workers must report tips; the IRS explains the record-keeping rules for employees and employers.
Tip on the full price before a coupon or gift card; the server did the same work.
Sources: IRS – tip recordkeeping and reporting