Tip Pool Management
The Tip Pool Management module enables restaurants to collect, track, and distribute tips according to configurable rules while staying compliant with federal and state labor laws.
Creating Tip Pools
A tip pool is a named collection of tips contributed by eligible staff and redistributed based on defined rules. Common pool configurations include:
| Pool Type | Contributors | Recipients | Use Case |
|---|---|---|---|
| Front-of-House | Servers, bartenders | Servers, bartenders, hosts, bussers | Traditional FOH pooling |
| Bar Pool | Bartenders | Bartenders, barbacks | Bar-specific sharing |
| House Pool | All tipped staff | All eligible non-management staff | Full-house pooling |
| Banquet Pool | Banquet servers | Banquet team | Event-specific pooling |
Navigate to Payments > Tip Pools to create a new pool, assign contributing and receiving roles, and set the effective date.
Distribution Rules
Each pool supports one or more distribution methods:
- Equal share — total pool divided equally among eligible recipients for the shift
- Hours-based — distributed proportionally to hours worked during the pool period
- Points-based — each role is assigned a point value; distribution is proportional to total points
- Percentage of sales — recipients receive a percentage of their attributed sales
Distribution calculations run automatically at the end of each shift or pay period, depending on your configuration.
Tip Sharing Percentages
Define the percentage of tips that contributing roles add to the pool:
| Role | Contribution Rate | Example |
|---|---|---|
| Server | 20-40% of tips | Server tips $200, contributes $60 at 30% |
| Bartender | 10-20% of tips | Bartender tips $150, contributes $22.50 at 15% |
The remaining percentage is retained by the contributing staff member. Adjust rates per pool to match your restaurant's tipping culture and local norms.
Compliance with Tip Laws
The platform includes guardrails to help you comply with the Fair Labor Standards Act (FLSA) and state-specific tip regulations:
- Management exclusion — managers and supervisors are automatically excluded from tip pools
- Minimum wage protection — the system verifies that tipped employees' effective hourly rate meets or exceeds the applicable minimum wage after tip credits
- Tip credit tracking — if your state allows a tip credit, the platform calculates the credit and flags any shifts where tips fall short
- Record retention — all tip pool transactions are retained for the legally required period (typically 3 years)
- State law overrides — configure state-specific rules that are stricter than federal requirements
Reporting
Tip pool reports are available under Reports > Tip Distribution and include:
- Per-shift pool totals and individual distributions
- Pay-period summaries by employee
- Year-to-date tip income for tax reporting (W-2 preparation)
- Audit trail of all pool configuration changes
Best Practices
- Communicate tip pool rules clearly to all staff before implementation
- Review distribution fairness monthly using the built-in reports
- Consult legal counsel when configuring pools in states with complex tip laws
- Use the simulation tool to model distribution outcomes before going live with changes