Personal Finance

What Is a Gratuity?

A gratuity, or tip, is an extra payment given to a service worker in addition to the listed price, commonly calculated as a percentage of the bill. Customs vary widely between countries: in some, tipping is expected and makes up a large part of workers' pay; in others, service is included and tipping is optional or rare.

Calculating a Tip

Tip = bill amount × tip percentage. Some people calculate it on the pre-tax amount, others on the total.

Gratuity vs. Service Charge

A service charge is a mandatory fee added by the business; a gratuity is voluntary.

🧮 Calculate It Yourself

Put Gratuity into practice with these free calculators — no sign-up, nothing stored.

🧾 Tip Calculator Calculate tip amount and split the bill between any number of people. Calculate → 🧾 Bill Split Calculator Split rent, groceries, or any shared bill unevenly by percentage. Calculate → 🤝 Tip Pool Calculator Split a shared tip pool fairly by hours worked, or evenly. Calculate →

🔗 Related Terms

Tip Pooling Bill Splitting Tip Credit

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Last updated: September 27, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.