When dining out, many people are unsure about the difference between a service charge vs tip. While both are related to rewarding staff, they are not the same—and knowing the difference helps you understand where your money is going.
A service charge is a mandatory fee added to your bill by the restaurant. It’s often a fixed percentage of your total, usually around 10% to 15%. Since it’s automatic, you don’t have a choice about paying it. This amount usually goes to the restaurant, which may distribute it among staff or use it for other expenses. Always check your bill to see if this fee is included before tipping extra.
A tip, on the other hand, is voluntary. You decide how much to give based on the quality of service. In many places, tips go directly to the server or are shared among the waitstaff, kitchen crew, and bartenders. Tipping is a way to personally thank the team for great service.
The main difference lies in control and purpose: a service charge is required and decided by the restaurant, while a tip is optional and left at the customer’s discretion.
Understanding the difference between service charge vs tip ensures you’re not unknowingly double-paying or missing out on showing appreciation for good service. Always review your bill carefully and tip accordingly if no service charge is included.
