In Los Angeles, a 20% mandatory gratuity and 5% 'admin fee' had diners calling it 'extortion'

A Los Angeles diner sparked frustration online after sharing a restaurant dinner bill that included an $8.25 "admin fee" on top of $33 in mandatory pre-added tips — amounting to a total of 25% extra charges before any voluntary tip.

Here's what to know

According to The Nerd Stash, the customer shared a photo of the receipt in r/LosAngeles after spotting a 5% surcharge on top of a 20% gratuity already built into the bill after dining at Üca Terraza.

"The prices were already pretty inflated for the amount of food I got," the poster wrote in the caption. "I thought it was pretty egregious to put a minimum tip amount and then charge an admin fee."

California's Honest Pricing Law has been in effect since 2024. It prohibits businesses from introducing undisclosed charges at checkout, although the California Department of Justice says mandatory fees can still be legal when customers are told about them in advance.

That advance notice appears on Üca Terraza's menu, stating, "All checks are subject to a 20% Gratuity on Final Bill. A 5% Surcharge is added to all food and beverage sales," and says the surcharge is not a gratuity but is meant to "help defray the cost of increased wages and benefits."

More background

Much of the reaction centered on the combination of charges rather than any single fee by itself. Some people in the thread questioned whether the extra charge benefited servers at all. 

A person who used to wait tables themselves wrote, "Probably doesn't even go to the waiter with s*** place like that."

Others read the surcharge as a way of shifting operating expenses directly to diners. 

Another commenter wrote, "That is code for I'm a very poor business owner and the gov't is making me pay my slaves." 

A third commenter said, "Born and raised in LA and I've worked in food service for 10+ years. I have never heard of an admin fee!!?? Absolute scam in my opinion!!!" 

What can be done?

Clear disclosure may not make the extra fees feel any less frustrating, but it does shape what options are available. When charges are clearly disclosed, customers can decide in advance whether a restaurant fits their budget or whether they would prefer to spend their money elsewhere.

Even when charges comply with the law, breaking out wages, benefits, gratuity, and other operating costs into multiple line items can alienate diners.

"That bill is extortion," a Redditor commented.

Where can I learn more?

The reaction to this receipt mirrors other flare-ups over surprise restaurant charges. 

• North Carolina's attorney general pressed the FTC over hidden food delivery fees and menu markups.

• McDonald's drew fresh criticism after online food orders piled up and complicated tipping expectations.

• A patron accused a local restaurant of menu pricing hypocrisy after an upcharge upset diners.

• A restaurant sign enforcing an absurd food policy drew warnings that regulars would stop coming.

• At local restaurants, fortune cookies became an advertising takeover that unsettled frustrated diners.

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