How to calculate tip with tax?

Standard etiquette suggests calculating tips on the subtotal (pre-tax amount), but you can calculate it on the total if you wish to be generous. To calculate the tip, multiply the bill amount by your desired tip percentage (e.g., 0.15 for 15%, 0.20 for 20%).

Formula

Tip = Bill Subtotal × (Tip % ÷ 100)

Worked Example

Subtotal is $40. You want to leave 20%.

1. Decimal: 20 ÷ 100 = 0.20
2. Tip: $40 × 0.20 = $8
3. Total (Pre-tax): $48

Result: Leave an $8 tip.