In many restaurants and service environments, teamwork is the key to providing a great guest experience. A tip pool is a system designed to reflect this collaborative effort by collecting all tips and distributing them among the entire service team, including not just servers but also bussers, hosts, and bartenders. Our Tip Pooling Calculator is a tool for restaurant managers and staff to fairly and transparently divide a pool of tips. Whether your establishment uses a system based on hours worked or a more complex points system, this calculator ensures that the distribution is accurate and easy to understand.
How to Use the Tip Pooling Calculator
Distributing a tip pool among your staff is a simple process:
- Enter Total Tips: Input the total amount of tips collected in the pool for the shift or pay period.
- Select Pooling Method: Choose whether you will distribute the tips based on "Hours Worked" or a "Points System."
- Add Employees and Their Value: For each employee in the pool, enter their name and their corresponding value—either the number of hours they worked or the number of points they are assigned.
- Calculate Shares: Click the "Calculate Shares" button to see the exact amount of the tip pool that each employee should receive.
Understanding Tip Pooling Methods
A successful tip pool relies on a system that the entire staff perceives as fair and transparent. There are two primary methods for dividing a tip pool.
1. The Hours-Based Method
This is the most common and straightforward method. It distributes tips based on the number of hours each employee worked during the period the tips were collected.
The calculator first determines a "tip rate" per hour by dividing the total tips in the pool by the total hours worked by all employees. This hourly tip rate is then multiplied by the number of hours each individual employee worked to find their share. This method is simple, easy to understand, and ensures that those who work more hours receive a proportionally larger share of the tips.
2. The Points (or Weights) System
A points-based system is often used to account for the different roles and levels of responsibility within the service team. In this system, each position is assigned a certain number of "points." For example:
- Servers: 10 points (have the most direct guest interaction)
- Bartenders: 8 points (serve their own guests and make drinks for the entire restaurant)
- Bussers/Runners: 5 points (support the servers)
- Hosts: 3 points (manage seating and first impressions)
The calculator first sums up the total points of all employees working that shift. It then divides the total tips by the total points to find the value of a single point. Finally, it multiplies this "per-point value" by the number of points assigned to each employee to determine their share. This method allows for a more nuanced distribution that reflects the different contributions of each role.
Legal Considerations for Tip Pooling
Tip pooling is legal under federal law, but there are strict rules that employers must follow. The Fair Labor Standards Act (FLSA) dictates who can and cannot be part of a tip pool.
A key rule is that a "traditional" tip pool can only include employees who customarily and regularly receive tips, such as servers, bartenders, and bussers. Employers, managers, and supervisors are strictly prohibited from keeping any portion of employee tips.
However, a 2018 change in the law allows for a "non-traditional" tip pool that can include back-of-house employees (like cooks and dishwashers), but *only* if the employer pays all employees at least the full standard minimum wage and does not take a "tip credit" against the wages of its front-of-house staff. State and local laws can also vary, so it is crucial for employers to consult legal counsel to ensure their tip pooling policy is fully compliant.
Frequently Asked Questions
What is the difference between tip pooling and tip sharing?
Tip pooling involves collecting all tips into a single pot that is then divided among a group of employees based on a predetermined formula. Tip sharing (or "tipping out") is when a directly tipped employee, like a server, gives a percentage of their own tips to other support staff, like bussers and bartenders. This calculator is designed for a tip pooling system.
Is one pooling method better than the other?
The best method depends on the restaurant's service model. The hours-based system is simple and works well when all employees in the pool have similar roles. The points-based system is more flexible and can better reflect the different levels of responsibility and direct service provided by different positions, which can be seen as more fair in a complex team environment.
Can managers or supervisors be part of the tip pool?
No. Under the federal FLSA, employers, managers, and supervisors are legally barred from participating in a tip pool or keeping any portion of employee tips, regardless of whether the employer takes a tip credit or not.