What’s the point of the restaurant service charge?

Many US restaurants have added service charges of up to 22%.

Together with

The Future. To combat inflation and labor shortages — and upgrade employee wages and benefits — many US restaurants have added service charges of up to 22% (and sometimes more). This charge has left diners, who often confuse it with the tip, scratching their heads when the bill arrives. While imperfect, the service charge might become necessary to get servers closer to a livable wage.

What is it and why does it exist?
A service charge belongs to the employer, who can choose the amount added to the check, how to spend it, and how to disclose that information to staff and customers.

  • Many employers don’t want to depend solely on tipping, which can be inconsistent and inequitable, as gratuities are regulated by law and can only go to tipped workers. 
  • They believe the service charge is the best they can do with what they have until federal labor laws change.

Why not raise menu prices instead?
Restaurant owners aren’t convinced people will pay more for food amid ongoing economic uncertainty.

Still, some diners accept the service charge because it tells them the restaurant cares about the employees and their well-being.

Kait Cunniff

Kait is a Chicago-raised, LA-based writer and NYU film grad. She created an anthology TV series for Refinery29 and worked as a development executive for John Wells Productions, Jon M. Chu, and Paramount Pictures. Her favorite color is orange.


No design skills needed! 🪄✨

Canva Pro is the design software that makes design simple, convenient, and reliable. Create what you need in no time! Jam-packed with time-saving tools that make anyone look like a professional designer.

Create amazing content quickly with Canva