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updated: 2026-05-28
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t_keyword: Automatic Gratuity
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date_published: 2026-02-16
date_modified: 2026-05-28
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  t_meta_title: What Does Auto Gratuity Mean in Restaurants-
  t_meta_description: Learn what automatic gratuity is in restaurants and how POS systems apply service charges for large parties, events, and dining services-
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    v_date_published: 2026-02-16
    v_date_modified: 2026-05-28
  author:
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    t_author: Priyanka Bhadani
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    t_author_description: Jin is a content coordinator and SEO strategist for the Hubworks marketing team. When she's not busy writing and conducting research, she enjoys reading, binging Netflix, and exploring the outdoors with her rescue dog.
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  content:
    heading:
      t_title: What is Automatic Gratuity?
      t_description: Auto gratuity is a pre-determined tip that a restaurant automatically applies to a customer's bill.
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      t_text: <p>Auto gratuity is a pre-determined tip that a restaurant automatically applies to a customer's bill. It is usually added to a check when dining with a large party or for special occasions, or in a specific dining circumstance that ensures guaranteed compensation for service staff.</p><p>Auto gratuity is normally based on a percentage of your total bill. Some common auto gratuity percentages include-</p><ul><li>15% gratuity</li><li>18% gratuity</li><li>20% gratuity</li></ul><p>Restaurants generally include auto gratuity for the following situations-</p><ul><li>Dining in large groups</li><li>Banquets and private functions</li><li><a href="https://plumpos.com/marketplace/catering-management/">Catering</a></li><li>Fine dining restaurants</li><li>VIP reservations</li></ul><h2>How does auto gratuity work in a restaurant?</h2><p>The <a href="https://plumpos.com/">restaurant's POS system</a> usually controls the auto gratuity setting.</p><p>The process typically works as follows-</p><ul><li>This is a customer group that matches the restaurant's gratuity policy.</li><li>POS calculates the percentage automatically according to the bill.</li><li>Adding a gratuity amount to the bill.</li><li>The customer paid the entire bill, which included gratuity.</li><li>The gratuity is distributed according to the tipping and payroll policy of the restaurant.</li></ul>
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