A tip or gratuity is an amount of money that is given to a worker such as a waiter or waitress who performs a service for you. A common tip amount is 15% of the cost of the meal or other service. Generally a tip is determined based on the total bill which includes the cost of the meal and sales tax.

If a meal costs $10.00 and sales tax is 5% the bill is $10.50. A 15% tip based on the $10.50 cost would be $1.58. The total would be $10.50 + $1.58 = $12.08. In the next lesson we will find how to quickly estimate the amount of a tip.