Simplify tip distribution among staff by calculating share of tips based on hours worked, job roles, or custom percentages. Include deductions and generate a fair breakdown for each employee using this tip pool calculator for restaurants and bars.
Tip Pool Calculator
Employees
Distribution Results
How to use the Tip Pool Calculator
Step 1: Enter the Total Tips
Start by entering the total amount of tips you collected.
For example, if you have $200 in tips for the shift, just type “200”.
Counting up cash tips at the end of a long shift.
Step 2: Choose How You Want to Split the Tips
Option A: Split by Hours Worked
Check this box if you want to divide the tips based on how many hours each person worked.
This is a fair way to split when everyone should earn the same per hour.Option B: Custom Percentages
Leave the box unchecked if you want to set different percentages for each role.
This works well if certain jobs get a bigger share of the tips.
Step 3: Deduct Any Fees (If Needed)
If you need to take out any fees before splitting the tips, enter the percentage here.
This could be used to cover credit card fees or charitable donations. For example, if you need to deduct 3% on $200, that would be $6.
Step 4: Add Employee Details
For each employee, fill in the following:
- Their name
- Their job role (Server, Bartender, Cook, Manager, Busser, Host, Dish Washer, Other.)
- How many hours they worked
- Custom percentage (if you’re not using the hours-based method)
Click “Add Employee” if you need to add more people, or use the “×” button to remove someone.
Step 5: Calculate Tips
Hit “Calculate Tips” to see how the tips are split.
You’ll see:
- The amount each person gets.
- Their percentage of the total tips.
- Their job role.
How the calculations work
Method 1: Hours Based Distribution
For each employee:
- Calculate total hours worked by all employees Total Hours = Sum of all employee hours
- Calculate each employee’s share Employee’s Share % = (Employee’s Hours ÷ Total Hours) × 100 Employee’s Amount = (Net Tip Pool × Employee’s Hours) ÷ Total Hours
Method 2: Custom Percentage Distribution
- Verify total percentages equal 100%
- Calculate each employee’s share Employee’s Amount = Net Tip Pool × (Employee’s Percentage ÷ 100)
Tip Deduction Calculation
If a tip deduction percentage is entered:
- Calculate deduction amount Deduction = Total Tip Pool × (Deduction % ÷ 100)
- Calculate net tip pool Net Tip Pool = Total Tip Pool – Deduction
Is it fair to distribute tips?
As a former server myself, I always wanted to keep my tips… especially if I had a good night. But I also understand that this isn’t always practical if you have a team around you helping to support tables. In these situations, finding a fair way to distribute tips is important.
This calculator offers a fair and flexible approach to distributing tips, depending on your preferences and the needs of your restaurant or bar. Here’s why it can be a good approach in a restaurant or bar.
Fairness in Distribution
Hours-Based Distribution: If you want to ensure that each employee is compensated fairly for their time, the hours-based method is a very equitable approach. It means that those who work longer hours will get a proportionate share of the tips. This makes sense when everyone on the team is contributing equally in terms of effort and customer service like bussers, hosts, and dishwashers who play important roles behind the scenes.
More customers are putting tips on a credit card.
Custom Percentages: The custom percentage option allows for adjustments based on roles, which is important in many restaurant environments. Servers and bartenders, who often interact directly with customers, may receive a larger share of tips compared to cooks or dishwashers. This method helps ensure that people are compensated based on their responsibilities and the value they bring, making the system fair for everyone involved.
To ensure that the tip distribution process remains fair, transparency is crucial. Everyone should clearly understand how tips are collected and distributed, whether you’re using an hours-based approach or custom percentages. This openness helps build trust within the team and ensures everyone feels valued for their contributions.
Of course, modern POS systems like SquareUp can help make tip pooling more fair and transparent too. Just make sure you have a way to account for cash tips that aren’t put on a credit or debit card.
About the Author: Brett Lindenberg
