A TikTok user has called out Applebee’s after a payment kiosk suggested a tip that appeared to be calculated on his after-tax total rather than the pre-tax bill amount.
The customer, who posted his experience in a viral video, showed a $49.49 subtotal that prompted an $11.30 gratuity recommendation. A standard 20% tip on the food and drinks alone would have come to $9.90 — roughly $1.40 less than the machine proposed.
The kiosk screen indicated that tips were computed after tax and before discounts, according to the footage. The after-tax total stood at $56.50, which would yield the higher suggested amount.
Robert Mahon, managing partner of New York City-based Mahon Hospitality Group, said that restaurants typically retain some control over how their payment systems handle gratuity calculations.
“It varies from restaurant to restaurant,” he said. “The systems come with default settings, but the restaurant can usually change them. We use Toast, which defaults to calculating tips before tax, and there’s a setting in the back office to switch it.”
Mahon said he believes gratuities should be based on the pre-tax amount.
“You’re tipping for the food, drinks, and service — adding tax into that calculation doesn’t really make sense to me,” he said. “Guests can always leave more if they want.”
He also stressed that transparency matters when customers face suggested tipping percentages.
“The main thing is being clear. If someone hits 20%, they should know what they’re leaving 20% on,” he said.
The Applebee’s incident follows a similar episode at Dave & Buster’s that Fox News Digital previously covered, where patrons questioned gratuity prompts that also appeared to use after-tax totals as their baseline.
While the Applebee’s kiosk did seem to disclose its calculation method on screen, the episode underscores why diners should verify the base amount before confirming a suggested tip.
“I’d want to see the full receipt before putting it all down to tax,” Mahon said.
Fox News Digital reached out to Applebee’s and the customer for comment.
The broader pattern of inflated tip suggestions has drawn increasing scrutiny as more restaurants adopt digital payment kiosks that automate gratuity prompts. Customers have reported feeling pressured by preset percentages and unclear math across multiple chains.
The practice of calculating suggested tips on post-tax totals remains legal but has become a flashpoint in ongoing debates about transparency in the service industry. Consumer advocates note that even small discrepancies can accumulate significantly across millions of transactions.