How the total is worked out
Sales tax is the bill times the tax rate. The tip is a percent of either the bill or the bill plus tax, whichever you choose. The total adds the three, and the split divides the total by the number of people.
Total = bill + tax + tip Share = total ÷ people
Tax = bill × tax%. Tip = tip% × (bill, or bill + tax). Rounding up replaces each share with the next whole dollar.
Example: tip before tax, split three ways
$64.00 bill, 8.25% sales tax, 20% tip on the amount before tax, 3 people.
- Tax: $64.00 × 8.25% = $5.28
- Tip: $64.00 × 20% = $12.80
- Total: $64.00 + $5.28 + $12.80 = $82.08
- Each share: $82.08 ÷ 3 = $27.36. Rounded up: $28.00 each, $84.00 in all, $1.92 more than the total.
Example: tip after tax
The same bill with the tip on the amount after tax.
- Amount after tax: $64.00 + $5.28 = $69.28
- Tip: $69.28 × 20% = $13.86
- Total $83.14; each share $27.71
Questions
Should the tip be on the amount before or after tax?
This page does not say which is right; it lets you choose and shows the difference. A tip on the amount after tax is a little larger whenever there is sales tax, because the base is bigger. In the example below it is $13.86 against $12.80.
What does “round each share up” do?
Each person’s share goes up to the next whole dollar, so everyone pays a round number. The extra goes to the tip, and the result shows how much extra and what percent of the bill the tip becomes.
Where do I get the sales tax rate?
From your receipt or the state’s revenue agency. The sales tax calculator lists each state’s base rate, and you add any local rate yourself. Leave the field blank if your bill is not taxed.
Can the bill I enter already include tax?
Enter the amount before tax and the tax rate. If you only have a total that includes tax, use the sales tax calculator to take the tax out first.