Sales Tax, Tip, and Gratuity Questions

Front

What is sales tax?

Back

Sales tax is a percentage of the price of goods or services that is added to the total cost, collected by the seller and paid to the government.

Front

How do you calculate sales tax?

Back

To calculate sales tax, multiply the price of the item by the sales tax rate (as a decimal). For example, for a $100 item with a 5% tax rate: $100 x 0.05 = $5.

Front

What is a tip?

Back

A tip is a small amount of money given to someone for their service, typically in the hospitality industry, as a way to show appreciation.

Front

How do you calculate a tip?

Back

To calculate a tip, multiply the total bill by the tip percentage (as a decimal). For example, for a $50 bill with a 15% tip: $50 x 0.15 = $7.50.

Front

What is gratuity?

Back

Gratuity is another term for a tip, often used in the context of service industries.

Front

What is the difference between tip and gratuity?

Back

There is no difference; both terms refer to the extra money given for service.

Front

If a meal costs $30 and you want to leave a 20% tip, how much is the tip?

Back

$30 x 0.20 = $6.

Front

What is the total cost if a meal costs $40 and you leave a 15% tip?

Back

Total cost = $40 + ($40 x 0.15) = $40 + $6 = $46.

Front

How do you find the total cost including sales tax?

Back

Add the sales tax to the original price. Total cost = Original price + Sales tax.

Front

If an item costs $50 and the sales tax is 8%, what is the total cost?

Back

Total cost = $50 + ($50 x 0.08) = $50 + $4 = $54.