Tip Out Calculator

As a percentage of either your sales or your tips, per role. Three percent of £2,000 in sales is £60 owed regardless of what you actually collected in tips.

Both structures exist. A percentage of sales is owed whether or not the tips arrived; a percentage of tips moves with the night. Staff generally prefer the tips basis for exactly that reason.

Under a sales-based scheme on a badly tipping section, yes — the obligation can exceed what you collected. In several jurisdictions a tip-out cannot lawfully take a worker below the minimum wage, which is worth checking.

Rules vary considerably. Many jurisdictions permit sharing among staff who customarily receive tips, and exclude managers, supervisors and owners entirely. Some allow back-of-house sharing only where no tip credit is taken.

Yes, in essentially every system, including cash tips. Employers usually withhold on reported tips, and unreported cash tips remain the individual's obligation to declare.

Commonly a few percent of sales in total across all roles, but it varies by venue, region and whether the house uses a full pool. Ask for the policy in writing — an unwritten tip-out is a frequent source of dispute.

A rule allowing employers to count tips towards the minimum wage, paying a lower cash wage on the assumption tips make up the difference. Where a tip credit is taken, restrictions on who can share the pool are usually tighter.

In many jurisdictions no — supervisors, managers and owners are excluded from tip pools by statute. This is one of the more heavily enforced areas of wage law.

Legally, usually not. A mandatory service charge is typically the employer's revenue, which they may or may not distribute, while a discretionary tip belongs to staff. The distinction determines both tax treatment and who has a claim on it.

Through payroll in most operations, with tax and sometimes card processing fees deducted depending on local rules. Some jurisdictions prohibit deducting processing fees from tips entirely.

An independently controlled arrangement for pooling and distributing tips, used in some countries because it can change the contribution treatment of the payments. It has to be genuinely independent of the employer to work.

Tips-based sharing tracks the actual night and shares the risk of a bad section; sales-based sharing does not and can exceed what was collected. Staff generally prefer the former for exactly that reason.