We had been walking all morning, exploring parks, laneways, and other sights as we went.

When we saw the restaurant sign, we were certainly ready for a good meal.

As we walked in, wearing our hiking boots and trousers, and carrying our day packs, we quickly realised that the other diners were more ‘dressed’ for the occasion.

Weekend lunch, it seemed, was a different world.

That said, the staff didn’t miss a beat. No sideways glances, no hesitation.

The service was warm, welcoming, attentive, and genuinely exceptional from start to finish.

The meal itself was also excellent, quite in keeping with a +4-star rating.

When the bill arrived, there was no tip section. No “suggested tip” prompt. Nothing.

We tipped anyway, quite willingly, and without a second thought, simply because the experience had earned it.

A different city, a different occasion, a different restaurant. This time it was a pizzeria.

The food was good. The service was what you’d expect; pleasant, efficient, no complaints.

The bill arrived, and there it was: a section for a tip, already filled out, and just sitting there quietly, waiting.

Did I tip? No, I did not!

The service had been perfectly fine, but nothing about the experience moved me to reach further into my pocket.

I have been thinking about those two experiences lately, because they capture something that is quietly shifting in the way many Australian restaurants are choosing to operate, particularly in Sydney and Melbourne.

So, if you are visiting Sydney or Melbourne, whether from overseas or from another part of Australia, this is something you need to know, before you sit down at the table.

A Quick Outline

In this Post, we shall explore:

What Is Actually Changing on the Restaurant Bill

Australia has never had a tipping culture.

Hospitality workers are (or should be) paid a proper wage. In fact, they are entitled to penalty rates on weekends and public holidays, which is why you will often see a surcharge applied on those days.

That has all been standard practice for some time, and most Australian diners understand it.

What is newer, and what is worth paying attention to, is the quiet, gradual creep of additional charges, that go beyond penalty rates.

Across Sydney and Melbourne in particular, a growing number of restaurants, especially at the higher end of the market, are now adding what are variously described as “service charges”, “gratuities”, or “suggested tips” to bills.

Some apply only on weekends. Others now apply on Fridays. Some apply to larger groups. Some apply every day of the week.

In several cases, these charges are added automatically and will simply appear on your bill for you to pay, unless you notice them and ask that they be removed.

This practice began to attract attention in the immediate post-covid era, and in most cases was quickly withdrawn. However, as the post-covid ‘cost-of-living crisis’ has continued, the practice has resurfaced, as restaurants grapple with rising costs and tighter margins.

The resurgence of adding tips/gratuities/service charges to bills appears to be an initiative of the Australian Restaurant and Cafe Association (ARCA), formed in May 2024. Explanations from ARCA include: “…tipping helped eateries meet rising operating costs…”, and “…it’s to encourage a tipping culture…”.

Example showing a copy of a surcharge notice as displayed in a Sydney café, June 2022

Example shows a ‘sneaky’ service charge, in quite small print, added to a Sydney restaurant bill, October 2022

It is apparently more common in higher-end establishments, with a number of Sydney restaurants being identified as early culprits. It is also noted that automatic tipping is more common at eateries popular with international tourists, who would see the practice as ‘more of a norm than an exception’.

One university senior lecturer in economics, finance and marketing, recently noted that reliance on a tip-based model is unlikely to work well in Australia, pointing out that tipping is not ingrained in Australian hospitality culture. She also noted that shifting the responsibility for a fair wage, from employers to diners, is not something most Australians are comfortable with.

The Different Types of Charges, and Why They Exist

It is useful to understand the different charges you may encounter on your restaurant bill, because they are not all about the same thing.

Weekend and Public Holiday Surcharges

These are the most established and widely understood. They exist to cover the penalty rates that staff are legally entitled to on weekends and public holidays.

Typical ranges are between 10% and 15%.

To be legitimate, these surcharges must be displayed prominently where they are clearly visible to customers, usually on the menu.

Friday Surcharges

This is newer.

Some restaurants, initially in Sydney, but also now in Melbourne, have begun applying a surcharge on Fridays (these may also be encountered on other weekdays).

Typically framed around staff retention rather than penalty rates; a 10% service charge on Fridays has been reported at some Sydney establishments.

Once again, Friday surcharges must be displayed where they are clearly visible to customers.

Example shows a service charge/gratuity added to Sydney restaurant bill, June 2025

Example shows a service charge/gratuity added to a Sydney restaurant bill for a table of 11 diners, August 2025; curiously, this bill does not include any surcharge

Example shows a receipt that came with an automatic “suggested” tip built in, December 2025

Group Dining Surcharges

A number of restaurants are now applying a surcharge for larger groups, typically of six or more diners. The rationale offered is that larger groups require more staff coordination, more preparation, and more time at the table.

Charges of between 5% and 10% are not uncommon for group bookings. This is also reported to be occurring in Adelaide, and Brisbane.

Group dining surcharges must be displayed prominently for customers.

Automatic Service Charges, Discretionary Tips and Gratuities

 

This is the category to watch most carefully:

Example of gratuity, service charge, and surcharge notice seen on Sydney restaurant menu, September 2024

Example of surcharges listed on a Sydney restaurant menu, May 2026

Example of surcharge and service fee notice on a Sydney restaurant menu, May 2026

Card Surcharges

Until 1 October 2026, businesses are legally allowed to charge surcharges on card payments, provided they are clearly and prominently disclosed. As of 1 October 2026, businesses will no longer be allowed to apply surcharges to Visa, Mastercard, and eftpos transactions.

Other Surcharges

In recent times, since the Middle East conflict disrupted global oil supplies, fuel levies and similar charges have been reported at some venues, applied daily to cover rising operating costs. Any surcharges must be clearly visible to customers.

What Is Discretionary — and What That Means for You

Under Australian consumer law, any surcharge must be displayed prominently, such as on the menu, on a sign at the counter, or on the reservations platform, before you make a decision to order.

Businesses are not permitted to mislead consumers about what they will be charged or why. In practice, this means the information is there if you look for it; but it is not always presented in a way that draws your attention to it.

Here is what you can do:

Your Take-outs

• Australia does not have a tipping culture, and tipping remains entirely voluntary. You are never obliged to tip.
• Surcharges of various kinds (weekends, public holidays, Fridays, group dining), and also automatic service charges, are becoming more common, particularly in Sydney and Melbourne, and more commonly at higher-end restaurants.
• All surcharges are required by law to be disclosed prominently before you order. If a charge appears on your bill that was not disclosed, you have grounds to question it.
• Automatic service charges are actually discretionary (tips/gratuities), and can generally be removed on request.
• The most effective approach is simply to do your research before you book, read the menu when you are seated, and study your bill before you pay.

Dining out in Australia’s cities (not just Sydney and Melbourne) can be a genuinely wonderful experience. With many accomplished chefs throughout the country, the food is excellent, the settings are often beautiful, and the service, when it is good, is very good indeed.

That said, going in with your eyes open about what may appear on the bill, means you can enjoy every part of the experience, right to the end.

 

Weekend and public holiday penalty rates do increase operators’ payroll costs, which is why surcharges can be applied to your bill

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