The additional charge is $5 per person for dinner and $10 per person for brunch.
This charge isn't really the "tip" for the server, or at least shouldn't be considered so. We estimated the cost of what our Palo meal would have cost at a fancy restaurant and then tipped 20% based on that estimated total for the wonderful service that we received.
Let's look at dinner. If you figure that your meal would be at least $100 for the 2 of you at such a restaurant (which it could easily be), your tip would be around $20. Add that to the $5 per person charge and you'd be up to $30 for 2 people.
I guess you could spend $70 on wine or drinks, but we certainly didn't do so.