Have you ever paid the bill for your friends but have some of them pay you back the wrong amount? Or worse, without Goods and Services Tax (GST) and service charge?
Well, for small bills, it might cost you a dollar or two which isn’t a big deal.
But when you’re out with a big group or spending at an expensive restaurant, you may be paying north of $10 or more!
So here’s exactly how to calculate GST and service charge so you can pay your friends the right amount or get it back!
P.S. It’s not just a simple 118% of the stated price!
How to Calculate GST and Service Tax
To calculate GST and service tax, you will need to multiply 1.188 (or 1.199 from 2024 onwards) to the price of the meal or product.
The reason why it’s not a simple 1.18 multiplication is because the GST is applied on the price of the good AND the service charge.
Let’s use a simple scenario where the price of a meal at a restaurant is $10.
Service charge (10%): $10 x 10% = $1
GST (8%): $10 x 8% = $0.80
GST on service charge (8%): $1 x 8% = $0.08
Total cost inclusive of GST and service charge: $10 + $1.00 + $0.80 + $0.08 = $11.88 (118.8% or x 1.188)
Best Bill Splitting Apps
If you go out frequently with a large friend group, you may want to consider bill splitting apps for convenience.
Other than the initial hassle of signing up for an account, these bill splitting apps will calculate the cost each person has to pay. However, you’ll still need to calculate the GST and service charge.
Here are some popular ones:
Splitwise
Splitwise is an easy to use expense splitting app where you can invite your friends to organise group bills. You can split bills equally, by exact amounts and by percentages.
However, one downside is that many of the useful features such as currency conversion or receipt scanning are locked behind a paywall. Moreover, the app requires all your friends to accept the invite to create an expense which can be a hassle.
Settle Up
Settle Up is an alternative to Splitwise which offers not just a bill splitting function, but an in-built calculator and currency conversions for free. Moreover, you don’t have to wait for friends to join the group.
Splid
If you dislike signing up for accounts, Splid might just be the bill splitting app for you. It has a simple and intuitive user interface that allows you to track expenses. While it does have a currency conversion feature, it isn’t very intuitive to use.
Places Without Service Charge
When you dine at restaurants, you’ll often see menus with “++” after the prices. This means that GST and service charge has yet to be included and you’ll have to account for them.
But of course, why bother with all those calculations if they are already included! So here are some places where you can simply pay the nett price on the menu:
- Most fast food outlets like McDonald’s and KFC
- Donki
- Eighteen Chefs
- Gong Yuan Mala Tang
- Nando’s
- Pastamania
- Saizeriya
GST And Service Charge
Undoubtedly, having to calculate GST and service charge can get annoying. Some netizens also feel like it is a bit scammy to have prices shown without GST and service charge. A $29++ steak might feel affordable but the nett price comes up to $34.45. Almost $5 more.
Thus, some have called for legislation to ensure all displayed prices are nett. What do you think about GST and service charge being included at all eateries? Share with us your thoughts below!
