Eighteen percent of the meal is not eighteen percent of the till total
A tip line asks for a percent. It does not say percent of which number. The food is one number. The food plus sales tax is another. Eighteen percent of each is a different tip. People treat them as the same habit.
One meal, two bases
Food and drink, $80, before tax. In Ontario the harmonized sales tax is 13 percent. Eighty times 1.13 is $90.40. That is what the machine shows before a tip. The GST/HST page uses that rate for Ontario. Alberta on the same $80 is 5 percent GST, which is $84.00. The gap between those tills is the tax, not the service.
Eighteen percent of the food is $80 times 0.18, which is $14.40. Eighteen percent of the Ontario till total is $90.40 times 0.18, which is $16.27. The difference is $1.87. You did not tip 18 percent twice. You tipped 18 percent of a larger base, and the extra base was tax the restaurant remits.
The card total, not just the tip
Tax is already inside the $90.40. If the tip is on the food, you add $14.40 and the card is $104.80. If the tip is on the after-tax total, you add $16.27 and the card is $106.67. The tip page will split either cheque. It will not decide which base you meant.
Split four ways, the extra $1.87 is under 50 cents a person. The shrug is how the habit lasts. On a $400 group bill the same method is no longer coins.
The province changes the gap, not the method
In Alberta the till on this meal is $84.00. Eighteen percent of $84.00 is $15.12. The gap against $14.40 is $0.72, not $1.87. A smaller tax makes a smaller accidental tip. It does not make the two bases equal. Nova Scotia, New Brunswick, Newfoundland and Labrador, and Prince Edward Island at 15 percent make the gap larger than Ontario’s. Quebec on this site is entered as 14.975 percent of the pre-tax price, GST and QST together. Run the province you ate in.
The button on the machine
A terminal that offers 15, 18, and 20 percent is usually taking that percent of the amount due. The amount due is already after tax. Pressing 18 on the Ontario meal is the $16.27 tip, not the $14.40 tip. The button is not wrong. It is answering a different question than “18 percent of the food.” If you wanted the food base, you type $14.40 yourself. The preset will not do that for you.
Scale the same dinner up. Food $240 in Ontario is $271.20 at the till. Eighteen percent of the food is $43.20, and the card is $314.40. Eighteen percent of $271.20 is $48.82, and the card is $320.02. The gap is $5.62. Four people who shrug at $1.87 on the small bill are looking at more than a dollar each. The method did not change. The bill did.
Tipping on the whole bill on purpose
Some people tip on the after-tax total because the service was good or because the math on the machine is faster. That is a choice. The mistake is describing both results as “18 percent of the meal.” One of them includes 18 percent of the tax. Say which number you used before you split the table. Nothing on this page sets a required percent. A restaurant policy or a service charge printed on the bill replaces the habit.
Use the form
These notes are estimates for everyday use. They are not tax, payroll, mortgage, or legal advice. Type your own contract into the calculator.