Your Restaurant Receipt, Explained: Every Charge, Line by Line

What are all the charges on a restaurant receipt?

A restaurant receipt has five kinds of line, usually in this order: the subtotal (what you ordered), then any number of add-ons stacked on top — sales tax, a mandatory service charge or card surcharge, an automatic gratuity for large parties — and finally the tip you choose and the grand total. Four of those five are percentages of the subtotal, which is why the bottom of the check grows faster than the food did. Read top to bottom, a restaurant receipt is a short story about who gets paid: the kitchen, the government, the house, and your server, in that order. Knowing which line is which is the whole game — it tells you what’s fixed, what’s optional, and which one charge you can actually do something about.

The reason the lines confuse people is that they all look alike — a label and a percentage — while answering to completely different rules. Tax is the government’s and never optional. A service charge is the restaurant’s revenue. A tip is your server’s, and the only line on the whole check you fully control. Here is the same receipt as a map: who sets each line, whether you can refuse it, and how a group should split it. The last row is the newest, and the only one that isn’t a charge at all: a cash-rounding adjustment of a few cents, which has its own section below.

What does “open food” mean on a restaurant bill?

“Open food” is a point-of-sale line item, not a charge type of its own — something the server rang in and typed a price for at the time of sale, instead of a preset menu price. The name you see is whatever the till called it. What sits behind it can be food, or a fee such as corkage.

Toast, a restaurant POS vendor, documents these as open items and open-priced items: the server “is prompted to enter the price when they select it on the POS.” Its own documentation lists what they’re typically used for — corkage fees, room rentals, birthday parties, one-off events, catering, and daily specials “where staff enter the current price at the time of sale.” Square uses the same vocabulary: on its community forum a seller describes an “Open Food” button on the standard Square POS, and a reply in the thread says Square for Restaurants handles the same job through a “Quick Sale” feature instead of a dedicated button.

For a group, this is the one line worth asking about before you split. An open item can be anything — a corkage fee that belongs with the people who shared the bottle, a birthday cake the table shared, a special one person ordered — and the receipt often won’t say which. Everything else on the check announces what it is. This line doesn’t, so assign it to the people it actually belonged to rather than letting it default across the table.

Sources: Toast, “Create an Open Item or Open Priced Menu Item”; Square, on entering open food requests in Square for Restaurants.

What is the sales tax line on a restaurant bill?

Sales tax is the one line on the check that isn’t the restaurant’s choice — it’s set by your state and city, and a restaurant meal is taxed even in places where groceries aren’t. In most states a prepared meal is subject to sales tax, while food bought to cook at home is often exempt, so the same dollar of food can be taxed at the restaurant and exempt at the grocery store. That’s why the tax line on a dinner can feel steep: you’re paying the general sales tax, often plus an extra local meals tax on top. It’s also the one line on the whole check that nobody at the table can negotiate — the number is the government’s, and the restaurant only collects it.

How steep depends entirely on the city. According to the Tax Foundation’s 2024 comparison, combined meals taxes in the largest U.S. cities run from nothing in Portland, Oregon (which has no sales tax at all) to roughly 12% in Minneapolis, with Chicago, Virginia Beach, and Kansas City close behind. And the line is trending up: combined meals-tax rates rose in 29 of the 50 largest cities between 2012 and 2024 and fell in only two. Across splitty’s US-leaning receipts, the median tax line on a restaurant bill falls in the 8–9% of the subtotal band, and that band is the most common one. That number is worth holding onto: it means a single-digit tax line is often smaller than the service charge or the tip beside it — a service charge, where one applies, can take more than the government does. One line that increasingly shows up down here belongs to nobody on this list: a charity round-up is a customer’s own gift rather than the restaurant’s charge, which changes how a group should handle it.

Source: Tax Foundation, “Meals Taxes in Major U.S. Cities.” First-party figure: splitty’s own US-leaning scanned receipts.

Service charge, surcharge, or automatic gratuity — what’s the difference?

All three are mandatory amounts the restaurant adds, but they answer to different rules. A service charge is the restaurant’s revenue — not your server’s tip. A credit-card surcharge passes the card-swipe fee to you and only applies if you pay by card. An automatic gratuity is a service charge wearing a friendlier name: the IRS treats the automatic 18% added to a large party as a service charge, not a tip, because you didn’t choose it — and as wages when it’s distributed to staff. The label on the menu doesn’t decide which bucket a charge falls into — whether you got to pick the number does.

The service charge alone carries enough rules — where the money goes, the law behind it, whether you still tip — to fill its own guide; here it’s just one line in the stack. The practical upshot is the same for all three: they’re part of the price of dining there, and they’re usually a percentage of the subtotal — so they split the way tax does, in proportion to what each person ordered. The legal differences matter most for one question every table eventually asks.

Sources: U.S. Internal Revenue Service, “Tip Recordkeeping and Reporting” (Rev. Rul. 2012-18); surcharge prevalence via PYMNTS (2026); surcharge base: Toast, “Surcharging Overview”.

Why does the menu show two prices?

Because the restaurant is running dual pricing — also called a cash discount — instead of a card surcharge. The order has two totals: a lower cash price and a higher card price. Some menus print both numbers beside every item. Toast’s Dual Pricing product, which Toast currently offers only to eligible new US customers, works the other way round: the menu lists the card price, and a check paid in full with cash gets a discount, 4% by default, off its pre-tax amount. That discount prints on the receipt as its own line under the pre-discount total. Either way, the spread was in the posted price the whole time, and which price you pay is decided by how you settle.

The spread is usually in the same few-percent range as a surcharge would be, though nothing requires the two to match — a posted cash discount isn’t capped the way a surcharge is. What really changes is the framing, and that framing is a deliberate, long-documented choice. When Congress took up card pricing in the 1970s, the card industry lobbied not against the price difference but over what to call it, preferring a cash discount to a credit-card surcharge. Richard Thaler used the episode as a worked example of the endowment effect: consumers read a cash discount as an opportunity cost of paying by card, but a surcharge as an out-of-pocket cost. Same money, different sting.

“Critics argued that a surcharge carries the connotation of a penalty on credit card users while a discount is viewed as a bonus to cash customers.”

Richard Thaler, “Toward a Positive Theory of Consumer Choice” (1980), quoting U.S. Senate testimony

The label also does legal work. Connecticut and Massachusetts prohibit credit-card surcharges outright, and states including Minnesota and New York regulate how merchants may impose one. A two-price menu sidesteps that vocabulary entirely — New York’s surcharge law does not prohibit a two-tier pricing system, so long as the higher credit-card price is the one posted. Card-network rules point the same direction: Visa caps a surcharge at the merchant’s discount rate or 3%, whichever is lowest, and bars surcharging debit and prepaid cards altogether. Those particular caps don’t bind a posted cash discount — though Visa still sets rules for how a discount is presented, and a badly-run one can be treated as a surcharge anyway.

Does a posted cash discount actually move anyone? The nearest evidence isn’t about restaurants, and it measures responses to a discount, not to how the price is framed. Analysing the Federal Reserve’s 2015 Diary of Consumer Payment Choice across purchases generally, Boston Fed economists Joanna Stavins and Huijia Wu looked at cash transactions and asked how often the payer had switched to cash from a method they preferred. Their estimate, in the paper’s words: “receiving a cash discount increases the probability of switching to cash by 11.7 percent,” after controlling for merchant category and transaction size. That is an estimated association in diary data, not an experiment, so it doesn’t prove the discount caused the switch. The figure is an estimated marginal effect measured only among cash transactions, so it is not the share of all shoppers who switch. They also found price incentives to be rare in the first place. Their conclusion cuts both ways: payment choice is affected “very strongly by consumer individual preferences,” but “steering by merchants may be effective under some circumstances.” It isn’t a restaurant finding, and the authors make no claim about restaurant menus — but it’s the closest measured answer to whether a posted cash price changes what people actually hand over.

Which price does the group split?

The one that was actually charged. A two-price menu is the only line on a restaurant bill that makes the group choose a reference price before it can divide anything — and when a card paid, the cash price is the wrong one, because it’s not the number that left anyone’s account.

The rule is blunt: reimburse at the charged total, never the menu total. Every other line on the check — tax, service charge, tip — is usually a percentage applied to one subtotal, so it splits in proportion to what each person ordered. Dual pricing is different in kind: which price applies depends on how the table pays, not on what anyone ordered. Split the cash column when a card paid and the arithmetic will look perfect while still coming up short.

If the whole check is settled in cash, the cash price is the honest basis. If one card pays, the card price is. Mixing them on one check is where groups get caught out: on Toast, one person’s card puts everyone on that check at the card price. People who want to pay cash should ask for their own check before paying, and other systems may handle a mixed check differently, so ask the server. Once a receipt gets photographed and split later, the charged total is the only number still in evidence.

Sources: Richard Thaler, “Toward a Positive Theory of Consumer Choice”, Journal of Economic Behavior & Organization, 1980; Joanna Stavins & Huijia Wu, “Payment Discounts and Surcharges: The Role of Consumer Preferences”, Federal Reserve Bank of Boston Working Paper 17-4, 2017; Visa U.S. Merchant Surcharge Q&A; New York General Business Law §518; Payments Dive (2025) on state surcharge rules; Toast, “Toast Dual Pricing Overview” (updated September 30, 2026).

What is the cash rounding line on a receipt?

It’s a few cents added or subtracted when you pay in cash, so the total lands on a nickel. It isn’t a fee, a tax, or a tip, and it’s the one line on the check that isn’t a percentage of anything: the register takes the finished total — food, tax, and every charge above — and moves it to a five-cent increment. Toast and Square apply it to cash payments only, so a table that pays entirely by card never sees it.

The line is new because the penny is on its way out. The US Mint struck its final circulating penny on November 12, 2025, and Treasury’s non-binding guidance to businesses is that “as pennies fall out of circulation, merchants will need to round transactions either up or down to the nearest five cents.”

Congress has now written a framework for it. The Common Cents Act (H.R. 10167) passed the House on September 14, 2026 and the Senate, by unanimous consent, on September 28, 2026; the ABA Banking Journal reported the next day that the legislation “now heads to President Trump.” The bill doesn’t order any restaurant to round. It says a seller “may, if exact change cannot be provided,” round a cash total ending in 1, 2, 6, or 7 cents down and one ending in 3, 4, 8, or 9 cents up — and that “nothing in this Act may be construed to require any person to round.” Payments by credit card, check, or gift card are carved out of the rounding section entirely.

What the line looks like depends on the restaurant’s point-of-sale system. Here is how three POS vendors document it:

Two things follow from where the line sits. First, it doesn’t change the tax. Square calculates taxes “on the original transaction amount before rounding is applied”; Clover says the adjustment “does not alter item prices, taxes, service charges, or discounts”; Toast keeps it out of net sales “since rounding is not considered a sale.”

Second, it can be negative. Under nearest-nickel rounding a total ending in 1, 2, 6, or 7 cents rounds down, so the line is a credit of a cent or two on some checks and a charge of a cent or two on others. Treasury’s expectation is that totals “will be rounded down just as often as they will be rounded up.” Whether that holds at your table depends on the setting and the state: Toast lets a restaurant always round up in the location’s favor (its own example takes a $3.97 total to $4.00), Arizona requires sellers who complete cash transactions without pennies to use the symmetrical “Swedish rounding” method, and Square says its rounding feature is unavailable to sellers with Connecticut locations “in compliance with state law.”

What happens to the rounding when a table pays part cash, part card?

The answer depends on the register, and on who pays first. Treasury’s guidance recommends that rounding “be applied only to cash payments” and that split payments “can be settled to the exact amount without the need for rounding adjustments.” Square’s feature works differently. On a payment split between cash and card, “the cash portion is rounded to the nearest $0.05,” the card portion is charged exactly, and — in Square’s words — “the order of payment (cash first vs. card first) may affect the final amounts.” Its own worked example is a $10.36 bill split in half:

Same check, same two people, and two different outcomes. Run the cash first and the card payer’s charge drops by the two cents the cash payer was rounded up — the rounding became a small transfer between two diners. Run the card first and the table pays two cents more than the printed bill. Nobody’s share of the food changed in either case.

So keep the line out of the split. Divide the pre-rounding total — the bill as it stood before the adjustment — in proportion to what each person ordered, the way every other line on this page splits. Whatever the register then adds or subtracts stays with the person who handed over the cash. This is a deliberate exception to the charged-total rule for two-price menus above: a dual-pricing spread scales with the whole order and always runs against the card price, while Square’s rounding table never moves a total by more than two cents, in either direction. It isn’t worth a payment request. It is worth knowing, because it explains why two people who split a check down the middle can be handed receipts that don’t match. The upstream question — which total a group should divide, and why the number of separate cash checks matters more than the size of the bill — is worked through in our guide to splitting tax and tip proportionally.

Sources: Toast, “Configure Cash Rounding During U.S. Penny Phase Out”; Square, “Set up cash rounding”; Clover, “Currency rounding adjustments”; U.S. Department of the Treasury, “Penny Production Cessation FAQs” (December 2025); H.R. 10167, Common Cents Act, 119th Congress; ABA Banking Journal, “Common Cents Act clears Senate” (September 29, 2026); Federal Reserve Bank of St. Louis, “When a Penny Costs More Than a Penny” (May 2026); Arizona Department of Revenue, “Arizona Penny-rounding Law” (A.R.S. § 44-7952). Vendor pages accessed October 2026.

Do you still tip when there’s a service charge?

It’s your call, because a tip is voluntary by definition. The IRS says a payment is a tip only if the customer “voluntarily decides to pay it and determines the amount,” and its own example is a restaurant that adds an 18% service charge: only the extra amount a customer chooses to add on top is a tip. So the disclosed service charge is part of the bill, and anything beyond it is up to you. The catch is that a service charge isn’t guaranteed to reach your server. For federal tax purposes it’s the restaurant’s income, and the IRS says an employer “may distribute service charges or auto-gratuities to employees in any manner it chooses or may retain all or part” of them. Some states are stricter: Massachusetts law says the total proceeds of a service charge “shall be remitted only to” wait staff, service employees, or service bartenders. That is a state-by-state rule, not a national one. If the menu is vague about that, a few percent left in cash is the most direct way to put something in your server’s hands, though a house tip-pooling policy can reach that too.

The IRS test is a clean way to keep the lines straight. For a payment to count as a tip, the customer has to make it free from compulsion and choose the amount — which is why an automatic gratuity, set by the restaurant, legally isn’t one for federal tax purposes. So the only line on the whole receipt you actually control is the voluntary tip. Everything above it is someone else’s number. (For what to leave once you know the charge isn’t one, our US tipping guide walks through every situation.)

Sources: U.S. Internal Revenue Service, “Tip Recordkeeping and Reporting”; Massachusetts General Laws c. 149, § 152A.