Tip Systems

Since I have worked in twelve different restaurants, and most of them as a server, I have had the pleasure of becoming quite familiar with a diverse set of tipping systems.  Now, I am not talking about how the customer tips out the various waiters, bartenders, maître d’s who may have helped them, but rather how the servers divide their tips.

I believe it is illegal (I could be a bit off on this) for an owner or manager to tell their servers how they must tip out the coworkers, but if the server enters the system willingly, then management has some leeway.  Besides, if they don’t like it, they don’t have to take the job.  Tipping out is complicated and can lead to resentment among the staff, but I feel not addressing the subject at all is worse than just letting the staff ‘work it out’. 

Not the staff!

Leaving it up to the staff is a big mistake in my book.  Like I said, it will lead to some resentment (someone is going to always end up with the short end of the stick), and it is better to have the staff mad at you than at each other.  If they are mad at each other, you have a big employee morale crisis on your hands.  If you attempt to dictate the tipping rules, they won’t like it, and they will not like you for it, but they are not going to like anything you tell them anyway, so you might as well attempt some control over the whole thing.


Every house is different, and for that reason it would be wrong for me to tell you what you should do.  I can however, give you a couple of examples of my own experiences, and let you decide what is best for your establishment.

The most simple, basic approach is the tipping out of one-third of the server’s gross tips.  For some easy to understand math, let’s assume the server grossed $100 in tips.  That server should tip out about $33 of it.  Deciding who to tip what amount is the challenge.  It, again, depends on the place.


Are there bussers, or do the servers bus their own tables?  Is there a host, or does the manager do the greeting and seating?  I think it is very important that the kitchen be included in the tip out.  Whatever the system, with this approach, the server just tips out one-third to those who helped them, and keeps the remaining two-thirds.  That list could include everyone–hostess, busser, kitchen, bartender, dishwasher, cocktail server, sommelier–everyone but the manager, that is.

Not the Manager

I think it is wrong to include the manager in tip-outs.  I know of many owners who like to save on labor by paying managers less money, and then having their income supplemented by the wait staff.  Uncool.  The manager now can show favoritism to the server who is the most generous.  They need to stay as neutral as possible.


I don’t like to name restaurants, or chefs in this blog, but my L.A., Wolfgang Puck experience was twenty years ago, so I think in this instance it is okay.  On any given night, that place had exactly 9 servers, 11 bussers, 2 bartenders, 3 hosts, 4 expediters, and a cashier–not to mention all of the bodies in the kitchen.  The only system that could work in that situation is tip pooling.  Nobody liked it, but Wolfgang’s response was classic Wolfgang:  “If you don’t like it you can go work across the street at Nicki Blair’s.”  (Funnier if said with an Austrian accent, although I promise you, no one thought it was funny at the time.  It’s barely funny twenty years later.)  That one was often a tough one, though.  Frequently I would put $800 into the tip pooling system and walk away with $150.  Ouch. 

I literally could write a book on this subject, because it is a constant source of conflict.  I certainly don’t recommend the Wolfgang approach–I don’t mean the tip pool system, but rather Wolfgang’s lovely attitude towards it all.    The bottom line is to come up with a system that is fair, that the servers can live with, and that can keep employee conflict at a minimum.  And if they don’t like it….



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