Tip Pool Distribution Calculator

Tip pooling means combining every tip earned during a shift and splitting it among the staff who are eligible for it.
The most defensible method is to divide by hours worked. It pays the people who were actually on the floor longer, and the arithmetic is plain enough that anyone in the pool can check it on their phone.

Core formula:

Hourly Tip Rate = Total Tips Collected / Total Hours Worked by All Staff

Each Employee's Share = Employee Hours × Hourly Tip Rate

Variable definitions:

• Total Tips: all cash and credit card tips collected during the shift or pay period
• Total Hours: the sum of hours worked by every participant in the pool
• Hourly Rate: the effective tip earnings per hour for this pool period
• Employee Hours: hours worked by one individual during the same period

Worked example: A restaurant’s Saturday dinner shift collects $840 in tips. Five staff members participated:

Hourly tip rate = $840 / 32.0 = $26.25/hour

Add those five shares up and you get $840.01, one cent more than went into the pool. That is rounding, not an error: Sam’s exact share is $170.625 and Casey’s is $144.375, and both round up. The calculator above reports the total of the rounded shares rather than the exact arithmetic, so the figure it prints always matches the numbers beside it. Round one share down to the cent, or make the difference up out of the closing float. What you must not do is print a total that does not equal the list sitting under it.

Legal requirements (US federal, under the FLSA):

• Managers and supervisors cannot participate in tip pools under any circumstances
• Only employees who “customarily and regularly” receive tips qualify (servers, bartenders, bussers, food runners)
• Back-of-house inclusion depends on state law: some states allow it, others don’t
• Employers must maintain records of all tip pool distributions

Credit card processing: card companies charge roughly 2 to 3% on the tip portion of a bill too. Some employers deduct that fee from the pool before distribution, and it is legal in some states and not others. Check your own state’s labor laws before you assume either way.