Service charge in the UK, explained
· 4 min read
In many UK restaurants, especially in cities, the bill arrives with a line near the bottom: “Discretionary service charge 12.5%”. Here’s what it means — and how to split it fairly when you’re in a group.
This is general information, not legal advice.
What is a service charge?
It’s an amount added to the bill for the staff, usually a percentage of the food and drink. 12.5% is common in London; 10% is common elsewhere. Some restaurants don’t add one and leave tipping up to you.
Do I have to pay it?
If the charge is described as discretionary or optional, you can ask for it to be removed — for example if the service was poor. Most people pay it when the service was good.
If a restaurant makes a charge compulsory, it should tell you clearly before you order, for example on the menu. Ask staff if you’re not sure.
Does it go to the staff?
Since October 2024, the Employment (Allocation of Tips) Act 2023 requires employers in England, Scotland and Wales to pass on all tips, gratuities and service charges to workers in full, without deductions, and to have a written policy on how they’re shared. If you want to know how a restaurant does it, you can ask.
Don’t tip twice
If service is already on the bill, there’s no need to add a tip on top — unless you want to. Card machines sometimes ask for a tip even when service has been added, so check the bill first.
Splitting service fairly in a group
Service is a percentage of what was ordered, so the fair way to share it is in proportion to what each person had:
- Sara had £22.50 of food → 12.5% service is £2.81.
- Ali had £31.50 → £3.94.
- Priya and Tom had £18 each → £2.25 each.
That’s £11.25 of service on £90 of food, shared so nobody pays service on dishes they didn’t eat. Splitting the service equally instead would have Priya and Tom paying more than their share.
Outzu does this automatically: once everyone taps what they had, service, tips and discounts are shared in proportion, and the totals add up to the receipt to the penny.