Lifestyle Spending The Frugal Handbook

TFH #23: Takeaway Fees

Many food and beverage (F&B) establishments in Singapore charge a ‘++’ on their menu items – one for service charge and one for Goods & Services Tax (GST).

In other words, the prices you see on menus are not the final price you end up paying.

This is a fairly common practice in Singapore and no one is surprised when they see these 2 additional charges on their final bill upon making payment.

While you can’t escape paying for GST, avoiding paying for the service charge is possible.

Last weekend, my partner and I were having lunch at a café and ordered two mains and a coffee to share.

After we were done with our meal, we wanted to buy some desserts to take home to share with our family.

Before placing the takeaway order for the desserts, my partner asked whether or not we would be charged the service charge on these takeaway desserts if we were to order them on the same bill as our meal.

For context, we were fully expecting to pay for the service charge on our meal since table service was provided.

I wasn’t sure what the answer was, so we decided that we would just try placing the takeaway order separately.

After all, the worst-case scenario is that we get charged for the service charge all the same.

We proceeded to pay for our in-house meal first, which incurred the full ++ as expected.

Then, we headed over to the dessert counter to place our takeaway order for some desserts.

We made the payment, and upon checking the receipt, we found out that we were not charged for the service charge on our desserts, so splitting our bill this way saved us a few dollars.

Thinking back to my partner’s question, I’m convinced that if we had ordered our desserts for takeaway on the same bill, we would’ve been charged the service charge on those items even though no table service would’ve been provided.

That’s because all our orders would’ve been on the same bill, and the items we ordered during our meal in the café were already liable for the service charge.

So, when the café generates our bill, they’d probably just apply the service charge to the total bill rather than only on the items that were ordered during our meal.

That would mean additional work for them that earns them less money, which doesn’t make sense to me.

Splitting our in-house and takeaway bills in this way not only helped us save money on the service charge, but also on GST.

This is because the service charge and GST are compounded.

In other words, a service charge of 10% and GST of 7% means that the total cost of a $100 meal is not 100*(1 + 0.10 + 0.07) = $117, but rather 100*(1 + 0.10)*(1 + 0.07) = $117.70.

So, by saving on the service charge for our takeaway order, our total bill before factoring in GST is smaller, which means that the total amount of GST we incurred is smaller.

I can’t guarantee that this works for all F&B places, but there’s no harm in trying it.

The next time you’re dining out at any F&B place that charges a service charge and you plan to make a takeaway order, try doing it in a separate bill to save a couple of bucks!

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