If you like to eat out (who doesn’t?) you know how quickly the cost of tipping and other extras can add up. Grabbing an $8 sandwich quickly becomes a $20 affair when you add things like tip, tax, extra mayo and a drink. The best thing you can do for your wallet is to mitigate these extra costs associated with eating out–the biggest one of all being the tip.
It turns out that *many* people are making a huge mistake when it comes to calculating the tip: basing it off the post-tax amount. Whatever percentage you feel is appropriate for the service you received (suggested: 15-20%), should be calculated off the subtotal (the amount before taxes).
Some restaurants will even put a suggested dollar amount, calculated off the subtotal, for each of the tiers–15%, 18%, 20%–at the bottom of the receipt for you. This should be a clear indication that tips should be calculated pre-tax–but most of us spend years dining out in restaurants before we pick up on this.
Well, now you know–so, how many dollars do you think you’ll save a year just by making this easy change?
[Photo: Jacks Wife Freda]