A gratuity is money given as a thank-you for good service, most commonly called a tip. When your family eats at a restaurant, the gratuity is the extra amount you leave for the server beyond the cost of the meal itself. If your lunch costs $20 and you leave $4 on the table for the server, that $4 is the gratuity.

The word comes from the idea of gratitude: showing appreciation for someone's work. Servers, taxi drivers, hairdressers, and hotel staff often receive gratuities as an important part of their income. In many restaurants, you'll see “gratuity included” on the bill for large groups, meaning the tip has already been added to what you owe.

While “tip” is the everyday word most people use, gratuity is the more formal term you'll see on bills, receipts, and signs. Some businesses have a gratuity jar at the counter where customers can leave tips for workers. The key idea is that gratuities are given to show thanks, though in practice there are strong expectations about tipping in restaurants and certain other services.