Applebee’s tipping suggestion sparks debate over after-tax total

A customer raises questions about tipping practices at Applebee’s after noticing the suggested tip on their bill was higher than expected.

The customer, who shared his experience in a TikTok video, wondered why the restaurant’s payment kiosk suggested an $11.30 tip on a $49.49 bill.

A 20% tip on $49.49 would be $9.90, about $1.40 less than the suggested amount.

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The apparent explanation was that the kiosk had calculated the suggested tip on the after-tax total of $56.50, rather than the subtotal of $49.49.

The payment screen indicated that tips were calculated after taxes and before discounts, according to the video.

An Applebee’s customer used his phone’s calculator (not shown) to determine the correct amount to tip 20% on a $49.49 bill. (Peter Burke/Fox News Digital)

Fox News Digital has contacted Applebee’s and the customer for comment.

Robert Mahon, managing partner of New York-based Mahon Hospitality Group, told Fox News Digital that restaurants generally have some control over how their payment systems calculate suggested tips.

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“It varies from restaurant to restaurant,” he said. “The systems come with default settings, but the restaurant can usually change them. We use Toast, which calculates tips before taxes by default, and there is a setting in the back office to change it.”

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Mahon said he thinks tips should be based on the pre-tax amount.

Applebee’s should be able to adjust its system to calculate tips before taxes, another restaurateur told Fox News Digital. (Bill Pugliano/Getty Images)

“You tip for food, drinks and service. Adding taxes into that calculation doesn’t really make sense to me,” he said. “Guests can always leave more if they want.”

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He also stressed the importance of transparency when customers are offered tip percentages.

“The main thing is to be clear. If someone reaches 20%, they need to know what they are leaving 20% ​​on,” he said.

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Fox News Digital previously reported on a similar incident at Dave & Buster’s, where customers questioned suggested tips that appeared to be calculated on after-tax totals.

Fox News Digital has reached out to Applebee’s for comment on the matter. (USA TODAY Network via Reuters Connect)

While the Applebee’s kiosk appears to reveal how suggested tips were calculated, the incident highlights the importance of checking the amount a suggested tip is based on before paying.

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“I would like to see the full receipt before putting it all on taxes,” Mahon said.