Tip Distribution Calculator

How to Split Tips Fairly

Fair tip distribution is one of the biggest challenges restaurant managers face every shift. The right approach depends on your team structure, local laws, and the culture of your establishment. Here are the most common methods:

• By hours worked — The most common and generally considered the fairest method. Staff who work more hours receive a proportionally larger share of the tip pool. This accounts for different shift lengths and part-time employees.
• By custom percentage — Assign specific percentages to each role or individual. This is useful when certain roles (like servers) have more direct guest interaction and traditionally receive a larger share.
• Equal split — Every team member receives the same amount regardless of role or hours. This works best for small teams where everyone contributes equally to the guest experience.

Whichever method you choose, transparency is critical. Post your tip distribution policy clearly and make sure every team member understands how their share is calculated before they start their first shift.

Tip Pooling Laws: What You Need to Know

Tip pooling regulations vary significantly by jurisdiction. In the United States, the Fair Labor Standards Act (FLSA) sets federal rules, but state and local laws may be stricter. Here are key points every restaurant operator should understand:

• Tip ownership — Tips are the property of the employee. Employers cannot take any portion of tips under the FLSA, except to facilitate a valid tip pool.
• Tip pool participants — Under current federal law, if an employer does not take a tip credit, back-of-house employees (cooks, dishwashers) may be included in the tip pool. If the employer takes a tip credit, only customarily tipped employees may participate.
• Managers and supervisors — Managers and supervisors are generally prohibited from participating in tip pools under federal law, even if they perform tipped duties.
• State variations — States like California, Oregon, and Washington prohibit tip credits entirely and have their own pooling rules. Always check your state and local regulations.
• Record-keeping — Maintain detailed records of all tip distributions. This calculator can help you create consistent, auditable records for every shift.

This tool is not legal advice. Consult with an employment attorney or your state labor department to ensure your tip distribution policy complies with all applicable laws.

Front of House vs Back of House Tip Splits

The FOH/BOH tip split is one of the most debated topics in the restaurant industry. Front-of-house staff (servers, bartenders, hosts) interact directly with guests and traditionally receive the majority of tips. Back-of-house staff (cooks, prep cooks, dishwashers) work behind the scenes but are essential to the guest experience.

Common FOH/BOH split ratios include:

• 80/20 — The most traditional split. FOH receives 80% of the pool, BOH receives 20%. This is a good starting point for restaurants transitioning to tip sharing.
• 70/30 — Increasingly popular as the industry recognizes the value of kitchen staff. Provides a more meaningful share to BOH while still rewarding front-of-house service.
• 60/40 — Used by restaurants that emphasize the kitchen's contribution to the dining experience, especially in chef-driven establishments.

Use the FOH/BOH slider above to experiment with different ratios and see how they affect individual payouts. The right ratio for your restaurant depends on your team's compensation structure, local labor market, and the value each group brings to your operation.