Everyday money

Tipping, tax & discounts.

The percentage math you actually use at a restaurant, a checkout, or a sale rack. Includes the mental shortcuts, an international tipping guide, and the discount trap that quietly costs shoppers money.

Quick answer

Fast mental methods for tips, how to back out pre-tax price from a total, an international tipping guide, and why a 20% + 10% coupon stack is 28% off, not 30%.

See also: Percentage calculator · Formula cheat sheet

Tipping without the mental strain

The reliable trick is to build every tip out of 10%, which you get by moving the decimal one place left. On a $60 bill, 10% = $6.

  • 15% = 10% + half of 10% → $6 + $3 = $9
  • 20% = double the 10% → $12
  • 18% = 20% minus a touch → about $11

To split a bill and tip per person, total first (bill + tip), then divide by the number of people — dividing before tipping makes the arithmetic messier.

An international tipping guide

Norms vary widely; treat this as a starting point, not a rule, and check locally.

RegionCustomary restaurant tip
United States & Canada15–20%, expected; often 18–20% for good service
United Kingdom & Ireland10–12.5%, and often already added as a "service charge"
Continental EuropeService frequently included; round up or add 5–10% for good service
Japan & South KoreaNo tipping; it can cause confusion or offense
Australia & New ZealandNot expected; round up for exceptional service

Sales tax, forward and backward

Adding tax: multiply the pre-tax price by (1 + rate). An $80 item at 8% tax: 80 × 1.08 = $86.40.

Backing out the pre-tax price from a tax-inclusive total is the one people get wrong. Don't subtract the tax rate — divide:

Pre-tax = Total ÷ (1 + rate)

A $108 total at 8% tax: 108 ÷ 1.08 = $100.00 pre-tax, so $8 was tax. Subtracting 8% from $108 would wrongly give $99.36, because the 8% was charged on the smaller pre-tax figure, not the total.

Why stacked discounts don't add up

A "20% off, then an extra 10% off" coupon is not 30% off. The second discount applies to the already-reduced price, not the original.

On a $100 item: 20% off → $80, then 10% off $80 → $72. You paid $72, a total discount of 28%, not 30%. The shortcut is to multiply the remaining fractions:

0.80 × 0.90 = 0.72 → 28% off

Because it's multiplication, the order doesn't matter — 10% then 20% also lands at $72. And the more discounts you stack, the further the true total drifts below the naive sum: 20% + 20% + 10% feels like 50% but is actually 1 − (0.8 × 0.8 × 0.9) = 42.4% off.

Quick reference

TaskDo this
Add P% tax/tipmultiply by (1 + P/100)
Take P% offmultiply by (1 − P/100)
Pre-tax from totaldivide total by (1 + rate)
Stack two discountsmultiply the remaining fractions, don't add the discounts
Quick answers

Common questions.

No. The second discount applies to the already-reduced price, so 20% then 10% off $100 gives $72 — a 28% total discount. Multiply the remaining fractions (0.80 x 0.90 = 0.72) to get the true total.

Divide the total by (1 + tax rate), don't subtract the rate. A $108 total at 8% tax is 108 / 1.08 = $100 pre-tax. Subtracting 8% would incorrectly give $99.36.

Find 10% by moving the decimal one place left, then scale it: 20% is double that, 15% is 10% plus half of 10%. On a $60 bill, 10% = $6, so a 20% tip is $12.

No. Because the discounts multiply, 20% then 10% gives the same result as 10% then 20% — both land at 72% of the original price.

Sources & standards

  • Tax Foundation — State & Local Sales Tax Rates — Current US combined sales-tax rates by state, updated annually.
  • GOV.UK — VAT rates — UK standard/reduced VAT rates, the basis for tax-inclusive pricing examples.
  • Tipping norms. Tipping customs are cultural conventions, not a formal standard — figures shown are general guidance and vary locally.

Links point to primary sources and standards bodies. Tax rates and official formulas change over time — verify against the source for current figures.

Read next

More guides.

MV
Written & reviewed by
Murugan Vellaichamy, Software Engineer
25+ years building consumer web tools · Maintainer of bestpercentagecalculator.net and its sister utilities. More about the author.