The fair way to split tax and tip on a group bill

The common mistake

Imagine two people: one orders $60 of food, the other orders $20. They correctly each pay for their own food. Then they split a 20% tip ($16) evenly — $8 each. The light eater just paid 40% of the tip on 25% of the food. That's backwards.

Tip and tax scale with the size of an order, so they should be divided the same way the food is.

Why proportional is fairer

Tax is literally a percentage of the subtotal, and a percentage tip is too. If your food was 25% of the table's subtotal, your fair share of a percentage-based tax and tip is also 25%. Splitting them proportionally simply keeps everyone's slice consistent from the subtotal all the way to the final total.

A worked example

Say the subtotal is $80: Person A ordered $60, Person B ordered $20. Tax is $7 and the tip is $16, for a $103 total.

Proportional split: A's share is 60/80 = 75%, so A pays 0.75 × ($7 + $16) = $17.25 on top of their $60 → $77.25. B pays 25% → $5.75 on top of $20 → $25.75. The two totals add up to $103, and each person carried tax and tip in line with what they ordered.

Tip on pre-tax or post-tax?

Either is defensible; tipping on the pre-tax subtotal is slightly more common and arguably more correct since you're tipping on the food and service, not the government's cut. The bigger fairness lever is splitting whatever tip you choose proportionally, not whether the base included tax.

Watch for service charges and auto-gratuity

Large parties often get an automatic gratuity (commonly 18–20%) baked into the bill. If it's already there, don't tip again on top by accident. Split the existing service charge proportionally just like a tip, and only add more if the group decides the service warranted it.

Let the tool do the percentages

Tab Tender distributes tax, tip, and service charges proportionally by default, so you never have to run these percentages by hand — assign the items and the fair totals are calculated for you.