Tip Pooling Overview & Set Up

What is the procedure for distributing tips among staff members? What authorization or permission is necessary to handle negative tips? What steps are necessary to consolidate tips into a pool and distribute them on a daily basis? 

In This Article...

• Tip Pooling Overview
  • What is a Points-and-Hours System?
• Configuring Tip Pooling
  • Tip Pooling on per Employee Roles
  • Tip Pooling Per Each Individual Employee

Tip Pooling Overview

Tip Pooling compiles all credit card tips (excluding cash tips) associated with checks processed during a shift and distributes them among servers who were logged in during the duration when the checks were active. 

Tips are linked to the time when the check was opened, and they are distributed solely among servers who were logged in at that specific time. 

When pooling tips, all gratuities received from customers during a single service are merged into a collective pot. Subsequently, these pooled tips are allocated to service staff members according to a predetermined distribution method. It's important to note that the same legal regulations governing tip outs also apply to tip pools, although certain states may prohibit tip pooling. Therefore, it's advisable to review your local labor laws before finalizing any decision regarding a tip-sharing strategy. 

Blogic enforces a Tip Pool based on a points & hours system. Employing a points-and-hours system grants managers the flexibility to reduce staff during slower business periods, while still ensuring equitable distribution of tips at the end of each shift, acknowledging everyone's contributions accordingly.

What is a Points-and-Hours System?

A tip pool based on points and hours operates similarly to the points system, where specific points are allocated to each service position depending on its level of responsibility. 

Subsequently, the total points for each employee's shift are calculated by multiplying their hours worked by the points assigned to their respective roles. This points-and-hours system is particularly useful when your tipped staff have varying clock in and clock out times on a single shift and when you want to encourage teamwork. 

Example: 

A shift with two servers, one bartender, one busser, one barback, one food runner, and two hosts, the points would add up like this:

• Server A = 10 points
• Server B = 10 points
• Bartender = 9 points
• Busser = 5 points
• Barback = 5 points
• Runner = 7 points
• Host A = 2 points
• Host B = 2 points

Total = 50 points

Now let's say half the team worked an 8 hour shift, except for one server and one host who worked half that. The points break down would look like this:

• Server A = 80 points (10 points * 8 hours)
• Server B = 40 points (10 * 4)
• Bartender = 72 points (9 * 8)
• Busser = 40 points (5 * 8)
• Barback = 40 points (5 * 8)
• Runner = 56 points (7 * 8)
• Host A = 16 points (2 * 8)
• Host B = 8 points (2 * 4)

Total points = 352

If the pool brought in $500 in tips, a point would be worth $1.42. And the break down will be:

• Server A = $114 (80 x $1.42)
• Server B = $57 (40 * $1.42)
• Bartender = $102 points (72 * $1.42)
• Busser = $57(40 * $1.42)
• Barback = $57 (40 * $1.42)
• Runner = $80 (56 * $1.42)
• Host A = $23 (16 * $1.42)
• Host B = $11 (8 * $1.42)

Configuring Tip Pooling

You have two options to configure tips

1. Per Employee Roles
2. Per Each Individual Employee

Tip Pooling on per Employee Roles

In POS Dashboard > Employee > Manage Roles > Select Role you would like to turn on Tip Pooling for.

Here, you are able to customize

• Tip Rate (0-100%)
• Max Tip Hour Per Employee Shift 
• Service Charges Rate (0-100%)
• Max Service Charges Hour Per Employee Shift

Tip Pooling Per Each Individual Employee

In POS Dashboard > Employee > Manage Employees > Select your employee

Here, you are able to customize

• Tip Rate (0-100%)
• Max Tip Hour Per Employee Shift 
• Service Charges Rate (0-100%)
• Max Service Charges Hour Per Employee Shift

You will also have the option to apply the Tip Pooling by Role override here by checking this box at the top of the screen:

Note: All users must be clocked out for tip pool to be calculated