How to use the server tip out calculator
- Enter your sales for the shift and the tips you received, before any tip-out.
- For each support role, enter a name, a percent and whether it is a percent of your sales or your tips.
- Use Add a role for more roles such as bartender, busser, host or food runner.
- Read each tip-out, the total and the tips you keep.
Formula
Tip-out for a role = percent x your sales, or percent x your tips, as chosen for that role
Total tip-out = the sum of every role's tip-out
Tips you keep = tips received - total tip-out
Each tip-out is rounded to the cent half up. If the tip-out is larger than your tips, the tips you keep appear as a negative number.
A shift with $2,000 of sales and $400 of tips
With $2,000 of sales, a 3% tip-out on sales to the bartender is $60. A 10% tip-out on tips to the food runner is $40. The total tip-out is $100, so a server with $400 in tips keeps $300. The tip-out is 25% of tips and 5% of sales.
If tips on a slow shift were only $30, the same two tip-outs would still total $63 (3% of sales is $60 and 10% of $30 is $3), and the server would be $33 short. A tip-out based on sales can leave a server short on a slow night, and some policies are written to avoid that.
Sales based and tip based tip-outs
A tip-out based on sales does not depend on how generous guests are, so it stays the same on a slow tip night. A tip-out based on tips rises and falls with what guests leave. Restaurants choose the method that fits their service, and some use one method for one role and the other for a different role.
This tool lets each role use either basis so you can mirror the policy at your restaurant. The percentages shown are examples. Use the ones your employer sets.
Rules and limits
Employer and local rules vary on who may share in tips, how tip-out is recorded and how tips are reported for tax. The calculator multiplies the percentages you type and does not check them against any rule, and it does not compute taxes on tips.
For splitting a pool of tips among staff, use the tip pool calculator. To work out pay with a tip credit, see the tipped wage calculator, to calculate a tip on a bill use the tip calculator, and for gross pay use the gross pay calculator.
Assumptions and limits
- Sales and tips cover the same shift or period.
- Each role's percent applies to your sales or your tips, never to both.
- The percentages are what your restaurant sets, and the defaults are examples.
- Taxes, tip reporting and legal limits on tip sharing are not modeled.
Frequently asked questions
How do you calculate tip out?
Multiply the tip-out percent by your sales or by your tips, depending on the policy. A 3% tip-out on $2,000 of sales is $60.
Should tip-out be based on sales or tips?
Restaurants decide. The tool supports both, so choose the basis your employer uses for each role.
What if my tip-out is more than my tips?
The tips you keep appear as a negative number, which shows how far short you are. Policies that tie tip-out to tips avoid this, but they are set by the restaurant.
Does this tool follow tip laws?
No. Rules on tip sharing and reporting vary by employer and location, and the tool only multiplies the percentages you enter.