Tip-Out Calculator

How tip-outs work

A tip-out is the share of a night that a server or bartender passes to the rest of the crew — typically bussers, food runners, barbacks, the service bar, and sometimes hosts or expo. It is how the tips a guest leaves one person reach everyone who touched the table.

Houses calculate it one of two ways:

• Percent of sales. You owe a fixed cut of what you sold — say 2% of your food sales to the busser — no matter what you were actually tipped. This is the more common system in full-service restaurants because it is simple to check against the POS.
• Percent of tips. You pass along a share of what you actually made — say 10% of your tips to the bar. This scales with the night, so a slow shift costs you less.

The difference matters most on a bad night: a sales-based tip-out stays the same even when a table stiffs you, so it eats a bigger share of a small tip pile. The calculator above handles both — set each rule's basis to match your house.

Typical tip-out percentages

Common ranges, not rules — every house sets its own, and yours may fall outside these. Your tip-out sheet or manager is the authority.

• Busser — 1–3% of sales
• Bartender / service bar — 1–2% of sales, or 5–10% of tips
• Food runner — 0.5–2% of sales
• Host — 0.5–1% of sales, where hosts are tipped out at all
• All roles combined — often lands between 3% and 6% of sales in a full-service restaurant, which can be 20–30% of a typical tip night

Some houses tip out on liquor sales only, food sales only, or net of comps and voids — that changes the math, so check what "sales" means on your sheet.

Tip-out math, step by step

Say you made $220 in tips on $1,400 in sales over a 7-hour shift at a $7.25 hourly wage, with the default rules above.

1. Each rule, in dollars. Busser: 2% of $1,400 = $28.00. Bar: 1.5% of $1,400 = $21.00. Runner: 1% of $1,400 = $14.00. (A percent-of-tips rule would use $220 as the base instead.)
2. Total tip-out. $28 + $21 + $14 = $63.00 — that is 4.5% of sales, or about 29% of your tips.
3. Take-home tips. $220 − $63 = $157.00.
4. True Rate. ($7.25 × 7 + $157) ÷ 7 = $207.75 ÷ 7 = $29.68 per hour — what the night actually paid you, wages and tips together, after tip-outs.

Tip-out questions, answered

How do you calculate tip out?

Tip out is calculated one of two ways: as a percentage of your tips or a percentage of your sales. Multiply the base by each role's rate. Example: on $200 in tips with a 3% busser and 2% bartender tip-out, you pay $6 plus $4 and keep $190.

What does a 5% tip out mean?

A 5% tip out means you hand 5% of a base amount — usually your total tips, sometimes your sales — to support staff like bussers or bartenders. On $300 in tips, a 5% tip out is $15. Sales-based versions cost more: 5% of $1,000 in sales is $50, regardless of what you earned.

Is tip-out based on sales or on tips?

It depends on the house. Percent of sales is the more common system in full-service restaurants — you owe a fixed cut of what you sold regardless of what you were tipped. Percent of tips scales with what you actually made. Check your tip-out sheet or ask a manager; this calculator handles either basis per rule.

Do I still owe the full tip-out on a bad tip night?

Under a percent-of-sales system, usually yes — the tip-out is figured from your sales, so a table that stiffs you still generates a tip-out on its check. That is the standard criticism of sales-based tip-outs. Some houses cap the tip-out at a share of tips on rough nights, but that is house policy, not a legal requirement, so ask before you count on it.

Can a manager or the house keep part of the tip-out?

Not under US federal law. The Fair Labor Standards Act bars owners, managers, and supervisors from keeping any portion of employees' tips, including through a tip pool. Tip-outs to non-managerial coworkers — bussers, runners, barbacks, bartenders — are legal. Some states add stricter rules on top.

Does tip-out change what I report for taxes?

You report the tips you keep, not the tips you were handed. Money you tip out to coworkers is not your income — the IRS expects a daily record of tips received and tips paid out to others, and you report the net. The coworker who receives the tip-out reports it as theirs. Keep the record; it is what supports your number.