What are Pooled Tips?

Pooled tips refer to a system where tips collected during a shift get combined into one pool, then split among staff, rather than each person keeping whatever they personally earned from their own tables or orders.

The split usually follows some kind of formula, as everyone agrees on the same thing. Sometimes it's an even split among everyone working that shift. Other times it's weighted, based on hours worked, role, or a percentage set by position; a server might get a bigger share than a busser, for example.

Restaurants use pooled tips for a few reasons. It can smooth out the unevenness of a slow section vs. a busy one, so servers are not getting uneven tips and all are paid equally. It can also encourage more teamwork, since everyone's earnings are tied together rather than each person only focused on their own tables.

There are rules to follow here, though, and they vary depending on where the restaurant is located. Which roles can legally be included in a tip pool? Getting it wrong can lead to real legal and tax problems. This is usually worth checking against local labor law before setting up a system, rather than assuming what feels fair is also what's legally required.