How tip-outs work

A tip-out is the portion of your tips you hand off to other staff who helped serve your tables, like the bar, bussers, food runners, and sometimes the house. It is usually figured as a percentage of your sales or your tips, or a flat amount, and it comes out of what you made before you count your night as done.

How is a tip-out calculated?

There are three common ways a tip-out is set:

• Percent of sales. A share of everything you rang up. Common for the bar, often 2% to 4% of your total sales.
• Percent of tips. A share of the tips you collected, often 1% to 3% to bussers or runners.
• Flat amount. A fixed dollar figure per shift, for example $10 to a barback.

Your restaurant may use one of these or stack several. To see your own number, put your figures into the tip-out calculator.

Percent of sales versus percent of tips

This distinction matters more than the percentage. A 3% tip-out on $1,600 in sales is $48. A 3% tip-out on $300 in tips is $9. Same number, very different result. Percent of sales is tied to what was ordered, so it stays steady even on a night you were tipped poorly. Percent of tips rises and falls with how you did.

What do you actually keep?

Your take-home tips are your cash and card tips minus the total tip-out. If you made $300 in tips and tipped out $48 to the bar and $9 to a busser, you keep $243. That is the number that matters, and it is the number a lot of workers never actually calculate.

Is a tip-out fair, and is it legal?

Tip-outs to other tipped employees who are part of the service are common and generally allowed. Rules get stricter about including managers, owners, or back-of-house staff, and they vary by state and by whether the employer takes a tip credit. For how shared pools work, read tip pooling rules.

Track it without the mental math

Set your tip-out rules once in Tipfolio and every shift subtracts them automatically, so your take-home and your true hourly are always right.