Terms are ordered alphabetically. When a definition references another term in the glossary, it's cross-linked in-text.
Automatic gratuity
A tip that a restaurant adds to the check automatically, usually for parties of 6-8 or more. Typically 18-20% of the pre-tax subtotal. If it's on the check already, you don't need to add another tip on top unless service was exceptional. Look for the line labeled 'auto grat,' 'service charge for large parties,' or similar.
Bill-splitting app
A tool that calculates each person's share of a group bill. Some (like BillSplitterApp) work in the browser with no account. Others require accounts and running balances between people. Neither type actually moves money — you still pay through Venmo, Cash App, Zelle, or similar.
Cash App fee
Cash App charges 3% when a payment is funded by a credit card, and 2.75% for business-account recipients. Personal payments funded by debit card or bank balance are free.
Even split
Dividing the final total equally among everyone, regardless of what each person ordered. Simple; fair when orders were similar or the group agreed up front. Unfair when orders were very different — see also 'itemized split' and 'proportional split.'
Gratuity
Another word for tip. Commonly used on restaurant checks to name the discretionary amount you add for service. See also 'automatic gratuity.'
Guest of honor
The person a group meal or event is being held for — a birthday, a going-away, a promotion. In most US friend groups, the guest of honor doesn't pay their share; the rest of the group covers it.
IOU
An informal 'I owe you' — verbal or written acknowledgment that one person owes another money, typically without any repayment schedule. Casual and enforceable only by social pressure. Fine between close friends for small amounts; useless for larger sums.
Itemized receipt
A receipt that lists every item you ordered separately, not just the final total. Ask for one at the table if you plan to expense your meal or split the bill by item. The final credit card slip is not an itemized receipt.
Itemized split
Each person pays for the specific items they ordered, plus their proportional share of tax and tip. The fairest option when the group ordered very different amounts. Requires either an itemized receipt at the table or a tool that lets each person claim their items.
Payer
The person who covered the whole check with their card and needs to be reimbursed by the group. Typically the person best positioned to organize the split — most tools, including BillSplitterApp, put the payer in charge of creating the bill and sharing the link.
Pre-tax subtotal
The total of your items before tax and tip are added. The starting point for most bill-splitting math, because tax and tip are calculated as a percentage of the subtotal (not the other way around).
Proportional split
A method where tax, tip, and fees are divided based on each person's share of the pre-tax subtotal. Someone who ordered 30% of the food pays 30% of the tax and tip. Fairer than splitting extras evenly, especially when orders were unequal.
Reimbursement
The money one person pays back to another to cover their share of an expense the other person already paid. Typically handled through Venmo, Cash App, Zelle, or Apple Cash.
Rounding up
Rounding a per-person share up to a whole dollar or a friendlier number. Useful when the exact per-person amount is awkward (e.g. $12.87). The person who rounds their own share up is being generous; the person doing the rounding should never round down.
Running tab
A shared record of expenses that a group logs over the course of a trip or shared event, settled all at once at the end. Better than trying to Venmo each expense as it happens.
Sales tax
A percentage-based tax added to a restaurant or retail bill. Varies by state, city, and sometimes by county. Ranges roughly from 5% to 10% in the US. Applied to the pre-tax subtotal; not applied to the tip.
Service charge
A fee added by the restaurant that may or may not be gratuity. Some restaurants use 'service charge' to mean the tip is already included; others use it for a house fee that goes to the restaurant itself. Always ask the server what a service charge covers before deciding how much extra to tip.
Settle up
The process of paying back what you owe (or collecting what you're owed) at the end of a shared event or trip. Typically means sending Venmo/Cash App/Zelle transfers to zero out everyone's balance.
Splitwise
A popular bill-splitting app that maintains running balances between friends over long periods. Requires accounts. Useful for people who share expenses regularly (roommates, couples). Overkill for one-off restaurant splits.
Tip
A voluntary payment for service, typically 15-22% of the pre-tax bill in US sit-down restaurants. Also expected in taxis, hair salons, hotels, and food delivery. Not automatically included unless the check says so.
Tip-out
The portion of a server's tips that they share with other restaurant staff (bussers, bartenders, hosts). Diners don't need to think about tip-out; it comes out of the tip they already left. Not a separate line item.
Value-added tax (VAT)
A consumption tax used in most countries outside the US. Usually included in the menu price, not added at the end. If you're splitting a bill in a VAT country, the subtotal you see is already the total — no separate tax line to divide.
Venmo fee
Venmo charges 3% for credit-card-funded personal payments (paid by the sender), and 1.9% + $0.10 for goods-and-services or business-account payments (deducted from the recipient). Personal payments funded by a bank account or debit card are free.
Zelle
A US bank-to-bank transfer network. No per-transaction fees. Instant when both sender and receiver's banks support it. Best for larger amounts; less common for casual splitting because it lacks the payment-request UX of Venmo and Cash App.
Not seeing a term?
Email billsplitterappsupport@gmail.com and we'll add it. Or start on the bill splitter home page if you already have a real bill to split.