Tip Pool Calculator

How to use this tip pool calculator

1. Enter the total tips in the pool for the period.
2. Choose how to split them: by hours worked, by points, by points × hours, or equally.
3. List each person on their own line as name, hours, points. Points are optional and default to 1. Use points to give a role a bigger or smaller share per hour, for example 1 for servers and 0.5 for bussers.
4. Read each person's share, their effective tips per hour, and check that the shares add up to the pool. They always add up to the exact cent.

How do you split tips fairly?

There are four common methods. None is the only right answer, so pick the one that matches how your team works and that everyone understands.

• By hours. Divide total tips by total hours to get tips per hour, then multiply by each person's hours. Simple and easy to explain. It treats every hour as equal, whatever the role.
• By points. Each role gets a set number of points and the pool is divided by total points. Good for stable teams, but it ignores who worked longer.
• By points × hours. Multiply each person's points by their hours. Many full-service restaurants use this because it reflects both role and time.
• Equally. Divide the pool by the number of people. Works for small teams with similar duties and shifts.

How do you calculate a tip pool by hours?

Tips per hour = total tips ÷ total hours. With $300 and hours of 10, 20 and 10, that is $300 ÷ 40 = $7.50 an hour, so the shares are $75, $150 and $75.

The same $500 pool, four ways

A server (30 hours, 1 point), a busser (30 hours, 0.5 points) and a bartender (20 hours, 1 point):

Method	Server	Busser	Bartender
Hours only	$187.50	$187.50	$125.00
Points × hours	$230.77	$115.38	$153.85
Points only	$200.00	$100.00	$200.00
Equal split	$166.67	$166.67	$166.66

Tip pool, tip out and tip share: what is the difference?

• Tip pool: all tips go into one pot and are divided by a formula.
• Tip out: each server keeps their tips but pays a set percentage, often of sales, to support staff such as bussers and bartenders.
• Tip share: a looser arrangement where employees share informally.

Who can be in a tip pool?

Under US federal law, employers, managers and supervisors cannot keep employees' tips, and they cannot take part in a pool. Which non-tipped workers, such as cooks, can be included depends on whether the employer takes a tip credit and on state law. Some states have stricter rules. See the US Department of Labor Fact Sheet #15 on tipped employees, and check with your state labor department before setting up or changing a pool.

Do pooled tips get taxed?

Yes. Tips you receive, including your share of a pool, are income and are reported to your employer. Service charges added by the restaurant are not the same as tips, so keep them separate. For the federal deduction on qualified tips, see the No Tax on Tips calculator.

Keeping good records

• Record hours and tips for every shift.
• Calculate the pool at least once per pay period and keep the worksheet.
• Tell staff the method in writing so there are no surprises.
• Round to the cent so the shares add up to the pool, as this calculator does.

Things that change the split

Service charges added by the business are not tips and should be kept out of the pool. Some employers deduct a share of card processing fees from card tips where the law allows it, which shrinks the pool before it is divided. Employers that take a tip credit face extra rules about who may share. Whatever method you choose, write it down, tell the team before it changes, and keep the hours and the worksheet for each pay period. Managers and supervisors must stay out of the pool.

General information only, not legal advice. Employment law varies by state.