MONEY AND TAXES · 3 MIN
Why the price changes at the register: tax and tips
In short
Sales tax is added at checkout and set by states and cities, not the federal government. Plus who expects a tip and how much.
Two things surprise almost everyone in the first week: the price goes up at the register, and the restaurant bill asks for a tip.
Sales tax
The US has no national sales tax. States, counties and cities set their own.
The shelf price usually does not include tax. It is added when you pay.
Example: a $10.00 item with 8% tax costs $10.80 at the register.
Rates are different from place to place, even between two nearby cities. A few states have no statewide sales tax.
Some things, like groceries or medicine, are taxed less or not at all in some states.
This differs by state; see In your state below.
Visitors usually cannot get sales tax back when they leave the US, unlike the VAT refunds in many countries.
Tipping
In the US, many service workers earn a low base wage and depend on tips (extra money you add for the service). Tipping is expected in many places, not only for great service.
Common amounts:
Sit-down restaurant (a waiter brings food to your table): about 15% to 20% of the bill before tax.
Bar: about $1 to $2 per drink, or 15% to 20%.
Food delivery: a few dollars or more, depending on distance and weather.
Taxi and rideshare (Uber, Lyft): about 15% to 20%, added in the app.
Hair salon or barber: about 15% to 20%.
Hotel housekeeping: a few dollars per night, left in the room.
Counter service (you order and pay at the counter), coffee shops and self-service kiosks often show a tip screen. A tip there is optional. You can choose "No tip" or "Custom".
How to tip on a card
1
The waiter brings the bill. Put your card in the folder.
2
They return a receipt with a Tip line and a Total line.
3
Write the tip, add the total, and sign. Keep the top copy.
Quick math for 20%: move the decimal one place left and double it. For a $45.00 bill: $4.50 x 2 = $9.00.
Service charges
Some restaurants add a service charge or "gratuity included", often for large groups. Read the bill so you do not tip twice.
Common mistakes
Forgetting tax and tips in your budget. A $20 menu meal can cost about $25 or more.
Leaving no tip at a sit-down restaurant. The server may lose most of their pay for your table.
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