Split tips quickly and fairly with this free tip pooling calculator

Yes, tip pooling is legal in the United States under federal law, but the rules depend on whether your restaurant takes a tip credit and which employees are included in the pool. Under the Fair Labor Standards Act (FLSA), employers who pay tipped employees the full minimum wage (without a tip credit) can include back-of-house staff like cooks and dishwashers in a tip pool. Employers who do take a tip credit can only pool tips among traditionally tipped employees. State laws vary significantly—some states have stricter rules—so it’s worth reviewing your state’s specific regulations or consulting an employment attorney before setting up your pool.

Some best practices for tip pooling include:

• Write down your tip pool rules and share them before the shift, not after payroll closes.
• Decide what counts as pooled tips (credit card tips, cash tips, tip jar tips), and stick to the same approach every shift.
• Keep an audit trail of totals, hours, and payouts so you can answer questions fast when someone’s doing the math after a long close.

Tip sharing means each server decides how much of their tips received they want to give to others, such as bussers or barbacks. On the other hand, tip pooling places all tips into one pool and then uses a set percentage or rule to distribute tips among the team. Both methods are types of tip splitting, but tip pooling is usually more structured. Read more on our blog: Tip pooling vs. tip sharing.

Check the total tip amount collected. Then, decide how you want to distribute it among your team. With 7shifts, you just need to enter the total tip amount collected, and it’ll automatically distribute tips based on your set rules. You can choose to split tips by percentage per role, hours worked, or custom tip pools.

First, decide which employees are part of your pool (servers, bartenders, etc.). Next, pick a system to distribute tips, like dividing by the percentage of sales or service hours.]

Afterward, outline any special rules or pooled tips for slow shifts, large parties, or unique role tasks. Make sure to set clear guidelines and keep everyone informed to reduce misunderstandings and conflicts.

Set up a tip pool with 7shifts by choosing employees who’ll receive tips for a certain shift. Our tip management tool will then split the tips based on the rules you set. You can adjust for slow shifts, large parties, or unique roles for even more customization.

Tip calculation errors are one of the most common causes of staff disputes and turnover in restaurants—even a small mistake can feel deeply unfair to an employee who depends on tips as a significant part of their income. If errors happen repeatedly, they erode trust and can create legal exposure if employees believe they’re being shorted. Manual spreadsheets are especially vulnerable to formula errors, especially when shift data changes at the last minute. 7shifts automatically syncs tip data from your POS and applies your pooling rules in real time, so there’s an auditable record every shift that both managers and staff can see.

Under the 2018 amendment to the FLSA, restaurants that pay all employees the full federal minimum wage (and don’t take a tip credit) are allowed to include back-of-house employees—including cooks and dishwashers—in a tip pool. This change was designed to give operators more flexibility to share tips with kitchen staff who contribute to the guest experience but don’t receive tips directly. However, managers and supervisors are explicitly excluded from tip pools under federal law, regardless of the method used. Always check your state law as well, since some states have additional restrictions that go beyond the federal standard.

A spreadsheet requires you to manually enter tip totals, hours worked, and employee information after every shift—and any change to the schedule means updating the sheet again. 7shifts connects directly to your POS system to pull tip data automatically, then applies your pre-configured pooling rules (by hours worked, percentage of sales, custom percentage, or points weighting) without any manual input. The result is available to both managers and staff in real time through the 7shifts dashboard, so there’s no end-of-shift scramble and no room for the kind of calculation errors that cause disputes. For restaurants running multiple locations or complex tip formulas, this difference can save hours of admin work every week.

7shifts’ Tip Management add-on lets you set your pooling rules once — by hours worked, role, or percentage of sales — and it applies them automatically to your sales data from that point on. Managers and staff can see the breakdown through the 7shifts dashboard, so there’s no end-of-shift scramble or manual spreadsheet math once rules are configured.

A spreadsheet-based calculator works for a single location, but it gets unwieldy fast when you’re managing two or more. Each location needs its own file, and any change to your pooling rules means updating every sheet manually. 7shifts lets you manage scheduling, labor, and tip data for all your locations from one dashboard, so your rules stay consistent and your managers aren’t stuck doing redundant admin work.

The most straightforward method is to divide total tips by total hours worked, then pay each employee based on their hours. For example, $800 in tips across 80 combined hours means each hour is worth $10 — a bartender who worked 6 hours gets $60, a busser who worked 4 hours gets $40. If your team includes back-of-house staff with different contribution levels, a role-based or percentage-of-sales method may feel fairer. Whatever method you use, write it down and share it with your team before the first shift it applies.