A service charge is a mandatory charge added to a customers bill at a restaurant or bar, regardless of what its called. It is not the same as a tip, which is entirely discretionary based on good service. Service charges may be called living wage fees, and they are added to the bill to replace tipping, add to back-of-house wages, or offset expenses, depending on the circumstance. Service charges are not considered tips under California law, and they belong to the restaurant and not to the employees. The amount of the service charge is usually in the realm of 15-25% and is added directly to the bill and appears as part of the total. The purpose of the service charge is to help guarantee a living wage for staff, and it offers some flexibility for restaurateurs. The confusion often begins with the word “service,” which leads some diners to associate the charge with the quality of their experience. When guests see a service charge on their bill, they should know that the cost of doing business is higher than ever before, and those service charges are a means of staying in business.