Is tipping expected on the full service price or just the base cost?

Expanded Question:
I’m trying to figure out the standard for tipping, particularly in situations where the final bill includes more than just the base cost of the service. For instance, at a restaurant, my bill has the food price (base cost) plus tax and sometimes a mandatory service fee, or at a spa, the list price might be for the base treatment but I added on extras. Is the tip expected to be calculated based solely on the original, pre-tax, pre-fee base cost of the service itself, or is it customary to tip on the full price I’m actually paying, which includes taxes and any mandatory surcharges or service fees added on top? I’m unsure which amount is considered the correct foundation for calculating the tip to avoid tipping too much or too little.

In North America and many other regions where tipping is customary for full-service establishments (restaurants, salons, spas, barber shops, personal trainers, food delivery, etc.), tipping is expected to be calculated based on the base cost of the service before taxes and mandatory fees.

Here are the key details:

1. Base Cost: This refers to the pre-tax, pre-service charge, pre-discount subtotal listed on the bill or receipt. It’s the core amount charged for the service itself.

   • Example: A haircut costs $50. The pre-tax subtotal is $50.

2. Taxes: Sales tax, VAT, GST, and other government-mandated taxes are not included when calculating the tip percentage. The tip is calculated on the pre-tax base price because taxes represent government revenue, not compensation to the service provider.

   • Example: The $50 haircut has a 10% sales tax ($5), making the subtotal $55. Tipping is calculated on the $50 base cost.

3. Service Charges/Gratuities: Some establishments automatically add a mandatory service charge or gratuity (often 15-20%, sometimes called a "house fee" or "auto-grat"). This mandatory charge is generally considered the tip itself.

   • Tipping additional on top of an automatic service charge is usually unnecessary unless service was exceptional. The mandatory charge is typically calculated on the base cost before tax.
   • Example: The $50 haircut with a mandatory 18% service charge ($9) results in a bill subtotal of $59 ($50 + $9) plus tax ($5 = $64 total). No further tip is expected on the $59 subtotal unless exceptional service warrant it.

4. Delivery Fees: Delivery fees charged by restaurants or apps are generally not included in the tip calculation base. These fees often cover costs like driver mileage, insurance, or platform administration, and are not guaranteed to be passed on to the driver. The tip should be calculated based on the pre-tax food and beverage subtotal. However, if an establishment explicitly states that a delivery fee is distributed to the driver, it might be included in the base; this is less common. When in doubt, tip on the food cost before tax.

5. Why Pre-Tax? The rationale is that taxes are a legal obligation paid to the government, not income or compensation for the server, stylist, driver, or other tipped worker. Tip amounts should reflect the value rendered for the actual service provided.

6. Is Tipping on Post-Tax Amounts Wrong? While tipping on the post-tax total is sometimes done and isn’t considered offensive, it is not the standard expectation or practice. It results in a slightly higher tip amount than the traditional calculation. The industry standard and widely accepted practice remains calculating tips on the pre-tax subtotal.

In summary: Tipping is expected and calculated based on the base cost of the service (the pre-tax subtotal), excluding sales taxes, mandatory service charges (which are the tip), and delivery fees (unless explicitly stated otherwise).