Service Charge vs Tip: What's the Difference?

Updated June 2026 · 5 min read

A line item called "service charge" on a restaurant bill confuses almost everyone. Is it a tip? Do you tip on top? Does the server even get it? The short answer: a service charge is part of the price, not a tip — but who keeps it varies by country and by restaurant.

What a service charge actually is

A service charge is a fee the restaurant adds to your bill, usually 10–20% of the food and drink total. Legally, it belongs to the restaurant. The restaurant can pass it through to staff (most do, in whole or in part), use it to top up wages, or keep it for the business. Because it's not a tip, it's typically subject to sales tax — unlike a true voluntary tip in many jurisdictions.

Service charge in the United States

US service charges are usually called "automatic gratuity" and mostly appear for large parties (6+ people). It's set at 18–20% and replaces the tip — you don't add another 20% on top. Some cities (notably parts of California and New York) have started to see flat "service charges" of 3–5% used to fund employee health benefits; that's a separate line from the tip, and you should still tip on the pre-charge subtotal.

Service charge in the United Kingdom

UK restaurants commonly add a "discretionary service charge" of 12.5%. Since the 2024 Employment (Allocation of Tips) Act, the full amount must be passed to staff fairly. Because it's discretionary, you can ask for it to be removed if service was poor — staff are used to the question. If it's already there, don't tip on top; if it's not, 10–12.5% in cash is the norm.

Service charge in continental Europe

In France, "service compris" means service is included in the menu price — a true price-bundled service charge, no extra calculation needed. In Italy, you'll see "coperto" (cover charge per person) and sometimes "servizio" (service). Coperto is a seat fee, not a tip; servizio is the tip equivalent. In Germany, Austria, and most of Scandinavia, neither is common, and a small round-up handles it.

When you should still tip on top

Three situations where a small extra tip makes sense even with a service charge:

• The service was genuinely exceptional and you want to recognise an individual server.
• The service charge is clearly small (3–5%) and labeled for something other than the server (health surcharge, kitchen appreciation, etc.).
• You're at a bar or counter where the service charge applied only to the food portion.

When you should ask to remove it

If a service charge is described as discretionary and the service was bad — you waited an hour for water, were rushed through dessert, or the server was rude — you can politely ask for it to be removed. Mandatory charges (often labelled "service charge", "couvert", or "automatic gratuity") generally cannot be removed.

Bottom line

Read the bill before you tip. If you see "service", "servizio", "service charge", or "automatic gratuity", treat that as the tip and don't double up. If you only see tax, add your tip on the pre-tax subtotal. When in doubt, our tip calculator and country guide do the math for you.