In this article: A guide for servers, bartenders and restaurant workers who are working in a tip-pool system versus a tip-out system.
Let’s be honest - a lot of us started working in a restaurant for the tips.
The idea that you could hustle, handle your own tables, and be in “control” of how much you were making each shift was definitely what we signed up for!
It’s common knowledge that you can make good, and even great money as a tipped worker, despite the fact that most states don’t require restaurants to pay tipped workers minimum wage. Instead, they pay tipped wages, which may be as little as $2.13/hour, knowing that they will make up for the difference in their tips.
Even though servers and bartenders are usually the ones receiving tips directly, the entire team plays a role in giving the guests great service. To make sure everyone gets their share, restaurants will implement a tip system.
There are two typical systems that will be used; tip-out, or tip-pool.
The classic tip system that we’re most familiar with is usually referred to as a tip-out. Servers and bartenders collect their individual tips (cash and credit card), report that amount at the end of the night, and then “tip-out” a certain percentage of that to their support staff.
The percentage of tip-out is based on how many support roles there are (hosts, bussers, sommeliers, food runners, and sometimes the kitchen staff) and what management has decided is appropriate.
You may tip-out to certain roles based on gross food or beverage sales, or it might be a fixed amount (i.e. 10% of your total tips).
In recent years, more and more restaurants are moving away from the tip-out system and instead implementing a tip-pool system.
In a tip-pool, servers and bartenders collect their individual tips (cash and credit card), report that amount at the end of the night, and then it is averaged and split among all team members.
Most restaurants will use a point-value system with a tip-pool, meaning each job position is assigned a point, or a percentage of a point. For example: servers earn 1, bartenders earn 1, bussers earn .75, hosts earn .25, etc.
A tip-pool may also be based on the number of hours worked, so someone who was cut early and only worked for 1 hour won’t make the same amount as someone who worked 10 hours.
Why use a tip-pool system?
Why would a restaurant move from a classic tip-out system to a tip-pool system? Here are a few common reasons.
Easier to regulate breaks and hours
From a management perspective, a tip-pool makes it easier to control labor.
If you cut a server 30 minutes before they need to clock out, there’s no guarantee that all of her tables will close their tabs before then. With a tip-out system, she would want to stay until all of her tables close out so that she can claim the tips, but in a tip-pool she can transfer her tables to the closer, and clock out on time.
Increased sense of team
Some managers believe that implementing a tip-pooling system increases unity and promotes a culture of teamwork.
Even though servers are still assigned sections, there is no “your guests” versus “my guests.” Instead everyone is everyone’s guest, so if someone stops you for something you are inclined to help them. Essentially, that tip is your tip too.
Provides checks and balances
Another reason to implement a tip-pool system is to provide a checks and balances system.
Although generally the amount someone will make in tips is reflective of their level of service, sometimes luck (or lack of) is involved as well.
Sometimes people won’t leave a tip. There are lots of different reasons that they might not - cultural differences, they forgot, they accidentally took the slip with them. It happens!
With a tip-pool system, everyone on the team is guaranteed to make the same amount, so that loss of one single tip is spread out among everyone, instead of just impacting one person.
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Making the most of a tip-pool system
If you come from working in a tip-out system, and are now having to transfer to a tip-pool at a new job or because your current job is switching, you might be a little freaked out.
The way to make the most of a tip-pool system is to adjust your perspective on things. Instead of individual goals, the team should be focused on one common goal: give every guest the best experience possible.
Learn to keep your eyes open, and see what people need in each moment. Don’t think of guests as yours or theirs - they’re all yours!
If everyone on the team is able to start thinking this way, a tip-pool system can work well. In fact, you may even start to see higher and more consistent tip averages in a pooled house.