San Francisco restaurant surcharges and service fees explained

Many San Francisco restaurants add a surcharge or service fee to the check, often labeled for health care, staff benefits or operating costs. Since mid-2024, California law has required most businesses to include every mandatory fee in the advertised price, but restaurants and bars got a specific exception: they may still add a mandatory fee as long as it is clearly and conspicuously shown on the menu, along with what it is for. Here is how that works and what to do when you see one.

Why do San Francisco restaurants add surcharges?

The surcharge habit in San Francisco has roots in local law. In 2008 the city's Health Care Security Ordinance began requiring many employers to spend a set amount per hour on health care for their workers. Many restaurants responded by adding a line to the check, often labeled "Healthy SF" or something similar, to cover the cost.

Those surcharges became controversial. Restaurants collected millions of dollars in health surcharges in a year, and a large share was not spent on workers' health care. In 2011 the Board of Supervisors had already amended the ordinance so that money collected through a health surcharge must be spent on health care, and the City Attorney later reached settlements with restaurants that had not done so, with money going to eligible employees.

Over time, restaurants have added other kinds of fees too: general service charges, kitchen or staff appreciation fees, and charges described as covering rising costs.

What did California's SB 478 change?

SB 478, often called the Honest Pricing Law or the hidden fees law, took effect on July 1, 2024. According to the California Attorney General, it makes it illegal for businesses to advertise or list a price that does not include all mandatory fees or charges, other than certain government taxes and shipping costs. It does not limit what a business can charge. It requires the price you see to include everything you must pay. As the Attorney General put it, the price a Californian sees should be the price they pay.

What did SB 1524 change for restaurants?

Restaurants worried that SB 478 would force them to drop service charges or fold them into every menu price. The legislature passed SB 1524 as an urgency measure, and it took effect on June 29, 2024, just before SB 478.

Under SB 1524, restaurants, bars, food concessions and grocery stores may still charge a mandatory fee separately, as long as it is clearly and conspicuously displayed on any advertisement, menu or other display that shows food or drink prices, and the display explains the purpose of the fee. A surcharge printed only on the check, or buried where you would not see it before ordering, does not meet that standard. The exception does not cover third-party food delivery platforms, which must follow the general rule.

For the law itself and official guidance, look to the California Attorney General's office.

Is a service charge the same as a tip?

Not necessarily, and this is the most common source of confusion. A mandatory service charge is set by the restaurant, and depending on how it is described, it may go to the business, be shared with staff, or pay for benefits. A tip is voluntary and is meant for the staff who served you.

If a menu or check lists a service charge, it is reasonable to ask your server what it covers and whether it goes to the staff. That answer helps you decide whether to add a tip on top and how much.

How do you read a San Francisco restaurant check?

A typical check can include several lines:

Line	What it is
Subtotal	The price of the food and drinks you ordered
Surcharge or service fee	A mandatory charge the restaurant adds, which should be disclosed on the menu
Sales tax	California and local sales tax on the meal
Suggested tip	Optional amounts printed or shown on a card terminal

Restaurant meals in San Francisco are taxable at a combined California and local rate. Rates can change, so look at the tax line on your check for the current figure.

What should you do if a surcharge was not disclosed?

Start with the restaurant. Ask a manager where the fee was shown and what it is for; many disputes end there. If a mandatory fee was not clearly shown on the menu or other price display before you ordered, the California Attorney General's office takes consumer complaints about hidden fees, and San Francisco's City Attorney has pursued restaurants over health surcharges in the past.

How can you avoid surprises before you order?

• Read the menu footer. Under SB 1524, a mandatory fee should be shown clearly on the menu, with its purpose.
• Check online menus too. Advertisements and online menus that show prices are covered by the same disclosure requirement.
• Ask when you sit down. "Do you add a service charge?" is a normal question in San Francisco.
• Look at the check before you tip. Note any service charge so you can decide on the tip with full information.

How can you share what you found?

When a place is upfront about its prices, that is worth knowing. On Mosey you can rate the places you ate at and the dishes you ordered, with photos, and keep lists for friends, so the next person knows what to expect.

More guides to read next:

• San Francisco Chinatown and dim sum: a food guide
• San Francisco sourdough: history, science and where to buy it
• Cioppino and Dungeness crab season in San Francisco

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