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Typical tip-out percentages, and how to set yours
There is no legal “correct” tip-out percentage anywhere in the US, the UK, Canada or Australia. There are, however, ranges almost every house lands in, two different bases that get confused constantly, and a short list of people who may not receive a tip-out at all.
Two bases: percent of sales vs. percent of tips
A tip-out is either a share of the server’s sales (“bussers get 2% of your food sales”) or a share of the server’s tips (“bussers get 15% of your tips”). Because tips run around 15–20% of sales in a US full-service restaurant, a sales-based percentage is roughly five to seven times “heavier” than the same number applied to tips.
| Stated as | Server with $4,000 sales, $720 tips (18%) | Same thing as |
|---|---|---|
| 2% of sales | $80.00 | ≈ 11% of tips |
| 3% of sales | $120.00 | ≈ 17% of tips |
| 10% of tips | $72.00 | ≈ 1.8% of sales |
| 20% of tips | $144.00 | ≈ 3.6% of sales |
Conversion: % of tips = % of sales ÷ tip rate. At an 18% tip rate, 2% of sales = 2 ÷ 0.18 ≈ 11% of tips. Sales-based tip-outs are predictable for support staff and painful for servers on a bad-tipping night (you can owe a tip-out larger than your tips on a stiffed table). Tips-based tip-outs rise and fall with the night. Both are common; write down which one you use.
Ranges you will see in practice
These are the ranges operators report; they are house custom, not law, and vary by concept and city.
| Receiving role | Typical range (of server sales) | Or (of server tips) | Notes |
|---|---|---|---|
| Bussers / runners | 1–3% | 10–20% | Higher in high-volume casual; lower where servers run their own food |
| Bartenders (from servers) | 5–10% of bar sales, or 1–2% of total sales | 5–10% | Usually based on the server’s alcohol sales only |
| Hosts | 0.5–1% | 2–5% | Many houses pay hosts a higher wage instead |
| Barbacks (from bartenders) | — | 10–20% of bartender tips | Often a flat percentage of the bar pool |
| Kitchen / BOH | 1–5% | 5–15% | Only where legal — see below |
| Expo / food runner | 1–2% | 5–10% | Often grouped with bussers |
Total tip-outs from a server commonly add up to 3–6% of sales (roughly 20–35% of their tips). Above that, servers start to feel they are working for the support staff; below 2% of sales, support staff turn over.
Who may not receive a tip-out
United States (federal): owners, managers and supervisors can never receive tips from a pool or tip-out, whatever their hours or how much they helped. Kitchen staff (cooks, dishwashers) can be included only if the employer pays every pooled employee the full minimum wage with no tip credit. Where a tip credit is taken, the pool is limited to employees who customarily and regularly receive tips — servers, bartenders, bussers, barbacks, runners, hosts. Details: federal tip pooling rules.
California: no tip credit exists, so back-of-house tip-outs are allowed, but courts require recipients to be in the “chain of service” to the customer, and owners, managers and supervisors are excluded even when they serve. California guide.
New York: the Hospitality Wage Order lists who can share (wait staff, bartenders, bussers, runners, barbacks, captains without meaningful authority); cooks and dishwashers are not on it. New York guide.
UK, Ontario, Australia: see the international guide; the UK requires the allocation to be “fair” under a statutory code, Ontario bars owners except working sole proprietors and partners.
How to set your percentages
- Start from what the support role should earn per hour. If a busser should take home roughly $8–10/hour in tips on a normal night and you have one busser for four servers, back out the percentage from a typical night’s sales.
- Pick a base and stick to it. Sales-based if you want support staff to have predictable income; tips-based if you want everyone to share the risk of a slow night.
- Check the legal list above before adding a role. Adding the kitchen in a tip-credit state is the single most common violation.
- Write it down and date it. One page: roles, percentages, base, when it is paid, what happens with card fees and remainders. Give a copy to new hires.
- Review quarterly. Menu mix changes (more bar sales, more takeout) shift the real value of each percentage.
Pool instead of tip-out?
A tip-out keeps each server’s tips separate and moves a slice to others. A full pool puts everything in one pot and splits it by hours or points. Pools remove section envy and are simpler to record; tip-outs keep the incentive to upsell. Many houses run a hybrid: servers pool among themselves by hours, and the pool pays a fixed percentage to bar and support. The SplitTips calculator models exactly that: one pool, one off-the-top percentage, then a split.
FAQ
What is a normal tip-out for bussers?
Commonly 1–3% of a server’s sales, or 10–20% of a server’s tips. The right number depends on how many servers each busser supports and how much running they do.
Is it legal to tip out the kitchen?
In the US, only if the employer pays everyone in the pool the full minimum wage with no tip credit (so always possible in California, Washington, Oregon, Nevada, Minnesota, Montana and Alaska; elsewhere only if the employer gives up the tip credit). New York’s wage order does not list kitchen staff as eligible even then. Owners and managers can never be tipped out.
Can a tip-out be based on a server’s sales rather than their tips?
Yes, and it is the more common base in the US. The risk is a server owing more than they earned on a stiffed table; some houses cap tip-outs at a percentage of actual tips for that reason.
Can the employer deduct credit card fees before the tip-out?
US federal law lets an employer deduct the proportional card processing fee from card tips; California, and the UK’s tipping law, prohibit any deduction. Check your state guide.
Official sources
- US Department of Labor, Fact Sheet #15: Tipped Employees Under the FLSA — who may participate in a tip pool with and without a tip credit
- California Labor Commissioner, Tips and gratuities FAQ
- New York State Department of Labor, Hospitality Industry Wage Order (12 NYCRR Part 146) — tip sharing and pooling eligibility, §146-2.14–2.17
Split tonight’s tips in 30 seconds
The free SplitTips calculator splits a pool by hours, by role points or evenly, takes the kitchen tip-out off the top and prints a settlement sheet. No account needed.
Related guides
This guide is general information for operators, not legal, tax or payroll advice. Rates and rules change; the official sources above are the authority. SplitTips applies the rule you set and does not decide what is lawful in your jurisdiction.