How tip percentages are applied
A tip is typically calculated as a percentage of the bill before tip is added. In many restaurant tip calculator tools, the user enters the bill amount and the chosen tip rate, such as 15%, 18%, or 20%. The calculator then multiplies the bill by that rate to produce the gratuity.
Some users also include tax so they can see the final out-of-pocket total. That is why a split bill calculator with tip often presents the bill, tax, tip, and per-person amount together rather than leaving the user to combine them manually.