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Five Steps To Easily Calculating A 20% Tip

By on September 12, 2011

It is quite common for us to leave a tip after having a breakfast, lunch or dinner at a restaurant. Tip is any amount that is paid in excess of the bill amount.

Generally there is a confusion as to what amount should be left as tip. Some individuals may prefer to leave a fix amount while others may prefer to leave a certain percentage of the bill amount.

Let Us Discuss Important Steps In Calculating A 20% Tip.

a)   Request For Bill:

After completing food, we generally request for the bill. Bill is requested to verify the items ordered and to check the price against each time. In case you are not sure on the price of any item mentioned on the bill, you should check the price again with the restaurant owner.

b) Add Line Level Totals To Arrive At Total Gross Amount:

It is very important to check line level totals in order to calculate the total gross amount payable on your food bill. For Instance, you may have ordered 2 bowls of rice at a price of $ 50 per bowl. In this case your line level total would be $ 100 and total amount payable without taxes would be $ 100 only.

c) Add Taxes To Gross Total Amount:

Even though complete information on total net amount payable is available on the bill, it is a good practice to check all the figures again in order to ensure that correct total amount mentioned on the bill is correct.

Hence, it becomes essential to add the tax amount to the gross total amount. In case of any discount, you should check as to whether taxes have been applied after providing for discount or before deducting discount amount from gross total amount.

d) Decide  The Basis For Tip Amount:

Once all the items and total amount payable has been verified, you need to decide on the amount of tip. You have to take a decision as to whether you want to leave a tip on the gross amount after discount but before taxes or simply on the net amount payable, that is, gross amount after discount plus amount of taxes.

e) Calculate the Tip Amount:

In case you have decided to leave a certain percentage of the bill amount as tip amount, you will have to apply that percentage to the relevant amount decided by you earlier (step d). For Instance, total gross amount after discount is $ 150 while net amount after taxes is $ 170.

If you have decided to leave 20% as tip, you just need to multiply the relevant amount with .2 (20/100). By using this method, tip amount would come to be either $ 30 (on $ 150) or $ 34 (on $ 170).

With this simple method you would also come to know the difference between two different tip amounts which would make it easier for you to leave appropriate tip amount.

There is no need to multiply the bill amount with 20 and than divide it by 100 in order to calculate the tip amount. You just need to remember .2 as the basis for calculating the tip amount.

Photo Credit: miller-mccune.com

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