That's where the laugh comes in.

The phrase points to the part of a situation that supplies its humour, often an unexpected twist that makes the preceding account amusing.

It can also draw attention to an irony: what seemed ordinary, serious, or disadvantageous becomes funny once the final detail is understood.

Use it after explaining a situation and then identifying the detail that makes it comic or ironic. It suits conversational storytelling and may introduce a punchline, a reversal, or a wry observation.