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How to calculate a tip pool: by hours, by points, or evenly
A tip pool is simple arithmetic that goes wrong in the same three places every night: the tip-out gets taken after the split instead of before, two people disagree on what a “share” is, and the cents don’t add up. Here is the full method, with numbers you can check.
Step 1: Start with the pool, then take the tip-out off the top
Write down the total tips for the shift (cash plus card tips, after any policy-allowed processing fee). If your house pays a tip-out to the kitchen, bussers or barbacks as a percentage, take it off before splitting. The number you split is:
To distribute = Total tips − Tip-out
Example: $842.50 in tips, 10% kitchen tip-out. Tip-out = $84.25. To distribute = $758.25.
Taking the tip-out after the split, from each person separately, gives the same total but a different split whenever anyone has a different weight, so pick one order and write it into the policy. Off the top is the common one.
Step 2: Pick a weight for every person
Every method below is the same formula with a different weight:
Payout = To distribute × (person’s weight ÷ sum of all weights)
| Method | Weight | Best for |
|---|---|---|
| By hours worked | Hours on the clock | Houses where every role in the pool does similar work; the most common method |
| By role points × hours | Hours × a point value per role (server 1.0, bartender 1.0, busser 0.6, host 0.5) | Pools that include support roles expected to earn a smaller share per hour |
| Evenly | 1 for everyone | Short, fixed-length shifts where everyone worked the same time (banquets, events) |
Worked example: five people, $758.25 to distribute
| Name | Role | Hours | Points | By hours | By points × hours | Evenly |
|---|---|---|---|---|---|---|
| Maya | Server | 7.5 | 1.0 | $174.98 | $206.04 | $151.65 |
| Jordan | Server | 6.0 | 1.0 | $139.98 | $164.83 | $151.65 |
| Chris | Bartender | 8.0 | 1.0 | $186.64 | $219.78 | $151.65 |
| Sam | Busser | 6.0 | 0.6 | $139.98 | $98.90 | $151.65 |
| Lee | Host | 5.0 | 0.5 | $116.65 | $68.68 | $151.65 |
| Total paid out | $758.23 | $758.23 | $758.25 | |||
| Rounding remainder | $0.02 | $0.02 | $0.00 | |||
By hours: total hours are 32.5, so Maya’s share is 7.5 ÷ 32.5 = 23.08% and her payout is $758.25 × 0.2308 = $174.98 (rounded down). By points × hours: the weights are 7.5, 6, 8, 3.6 and 2.5, total 27.6, so Maya’s share is 7.5 ÷ 27.6 = 27.17% → $206.04, while Sam the busser drops from 18.46% to 13.04%. Evenly: $758.25 ÷ 5 = $151.65 each. These are the exact figures the free calculator produces for the same inputs.
Step 3: Round down, and show the remainder
Shares rarely land on whole cents. If you round each payout to the nearest cent you can end up paying out a few cents more than you collected. The rule that always balances: round each payout down to the cent, add them up, and report the leftover cents as a remainder (usually under a dollar). Put the remainder in the next pool, give it to whoever closed, or round it into the tip-out — just write the rule down so nobody argues about 7 cents at 1 a.m.
Step 4: Put it on paper
A settlement sheet with the date, the method, the total, the tip-out, each person’s hours, share and payout, and a signature line is what ends disputes. It is also the record US federal law expects you to keep when you run a tip pool (contributions and distributions), and what New York, the UK and Ontario require explicitly. The free calculator prints one.
Who can be in the pool is a legal question, not a math one. In the US, owners, managers and supervisors can never take a share. Whether cooks and dishwashers can be included depends on whether you take a tip credit; California and New York have their own lists. See the federal rules and the state guides before you set the roles.
Common mistakes
- Mixing “percent of sales” and “percent of tips”. A 3% busser tip-out on sales of $6,000 is $180; 3% of tips of $842 is $25. Both are common; they are not interchangeable. See tip-out percentages.
- Counting the whole shift for someone who did a split role. If a server bartended for 3 hours and served for 4, enter two rows or one blended point value, and record which.
- Changing the method mid-week. Pick a method per shift type (brunch, dinner, bar) and keep it, or your history is useless when someone asks why Tuesday looked different.
- Forgetting unpaid breaks. If hours come from a POS or timeclock export, use paid hours, not clock-in to clock-out.
FAQ
Should the kitchen tip-out come before or after the split?
Either is legal where kitchen tip-outs are allowed; before (“off the top”) is the usual practice and the one the SplitTips calculator uses. The total paid out is the same; what changes is how the tip-out cost is shared between people with different weights.
What is a “point” in a point-based tip pool?
A weight per role that is multiplied by hours. Servers and bartenders are typically 1.0; bussers, runners and hosts something between 0.4 and 0.8. The numbers are house policy, not law, but they must not be used to disguise a share for a manager.
Why don’t the payouts add up exactly to the pool?
Rounding. If each payout is rounded down to the cent, the sum is a few cents under the pool; the difference is the remainder. Report it on the sheet rather than hiding it.
Can I split credit card tips on the same sheet as cash tips?
Yes — they are one pool. Some jurisdictions let the employer deduct the card processing fee from card tips first (US federal law allows a proportional deduction; California does not). Enter the net figure your policy allows.
Official sources
- US Department of Labor, Fact Sheet #15: Tipped Employees Under the FLSA — tip pool participation, record-keeping, card fees
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.