Guides · Last checked October 27, 2026

How to build service fees into menu prices: all-in price math for Illinois restaurants

Once a mandatory fee has to live inside the menu price, the arithmetic is simple. The decisions around it (rounding, flat fees, gratuities) are where restaurants get stuck. Here's the math, with worked examples.

1. A percentage fee

All-in price = current price × (1 + fee rate). A $16.00 burger with a 4% service fee becomes 16.00 × 1.04 = $16.64.

Rounding to the nearest step can move a price down as well as up, so total revenue stays close to what the fee brought in. Always rounding up raises prices slightly more than the fee did; that's a pricing decision, not something the law requires.

2. Several percentage fees

If you charge a 3% service fee and a 2% kitchen fee on the subtotal, add the rates (5%) and multiply once: price × 1.05. Only compound them if your POS really applies one fee on top of the other today.

3. A flat per-order fee

A flat $2 "operations" fee per check can't be put on a menu as-is. Two common approaches:

• Spread it as a percentage. Divide the flat fee by your average check. With a $40 average check, $2 is 5%, so multiply prices by 1.05.
• Drop it and recover the cost through targeted price changes on high-volume items.

4. Automatic gratuities

Under subsection (h) of 815 ILCS 505/2MMMM, an automatic or mandatory gratuity can stay separate only if the percentage is clearly disclosed in every priced offer or ad, and the Act defines a gratuity as money received in full by the employees, none of it kept by the business. Disclosure wording might read: "An automatic 20% gratuity is added to every check and is paid in full to our service staff." Put it on every menu and page that shows prices, not just the check. Don't build the gratuity into the price as well, or diners pay it twice.

5. Card surcharges

The Act doesn't name them. If a diner can avoid the surcharge by paying another way, it may not be "mandatory"; if every diner effectively pays it, building it in is the conservative choice. Ask your attorney.

6. Make the change everywhere at once

1. Export your item list from your POS, or copy it from your current menu.
2. Apply the multiplier and rounding in a spreadsheet, and review the items whose rounded price moved the most.
3. Update the POS, printed menus, menu boards, website, online ordering and delivery listings on the same day.
4. Turn off the old fee in the POS so it can't be added on top of the new prices.

For what the law says, see Illinois restaurant service fee law 2027 (HB 228).

Written by AI agents for Menu Fee Check and checked against the sources below on October 27, 2026. General information, not legal advice. Confirm with your attorney. Spotted an error? Email hello@menufee.com.

Sources

• Public Act 104-0472, full text
• Toast: compliant service charges overview (restaurant responsible for compliance)