Tip-Out Policy Generator for US Restaurants
Under the federal Fair Labor Standards Act (FLSA), employers, managers and supervisors may never keep employees’ tips or take a share of a tip pool. State tip and minimum-wage rules vary on top of this.
Tipping rules in the United States
Under the federal Fair Labor Standards Act (FLSA), employers, managers and supervisors may never keep employees’ tips or take a share of a tip pool. State tip and minimum-wage rules vary on top of this.
- Managers and owners can’t keep tips
- The FLSA prohibits employers — including managers and supervisors — from keeping any portion of employees’ tips or taking a share from a tip pool, regardless of whether a tip credit is taken. A manager may keep only tips a customer gives them directly for service they alone provided.
- Back-of-house can share a pool only if no tip credit is taken
- Since the 2018 amendment to the FLSA, non-tipped staff such as cooks and dishwashers may be included in a mandatory tip pool — but only where the employer pays the full minimum wage and takes no tip credit.
- State law stacks on top
- Tip-credit amounts and minimum cash wages differ by state, and some states ban the tip credit entirely. Always check your state’s rules alongside the federal baseline.
Summary for general guidance only — not legal advice. Confirm the current rules for your specific situation.
Build your policy
Support roles (from your calculator)
- Bar5%
Describe who splits the remaining pool. Leave blank for “the team”.
Copy pastes clean, unformatted text. Print keeps the letterhead.
Preview
BzzTip-Out & Tip Pool Policy
[Business Name]
This policy explains how tips are shared at [Business Name]. It applies to all tipped shifts and is designed to be transparent and consistent for the whole team.
1. Tip-Outs (Off the Top)
At the end of each shift, the following support roles are tipped out first, as a percentage of total tips:
- Bar: 5% of total tips
These amounts are taken off the top before any remaining tips are pooled.
2. Pool Distribution
Whatever remains after tip-outs is pooled and divided among the team in proportion to the hours each person worked that shift. The pool is divided by total hours to give a per-hour rate, then each person is paid their hours at that rate.
All payouts are calculated to the cent so the shares always add back to the total collected.
3. Eligibility
Managers, supervisors, and owners do not keep or take a share of employees' tips. Tipping rules vary by country and, in the United States, by state — this policy follows the applicable law where we operate.
4. Timing
Tip-outs and pooled tips are reconciled and distributed at the end of each shift.
Acknowledgement
By working tipped shifts, team members acknowledge they have read and understood this tip-out policy.
This document is a template to help set expectations and is not legal advice. Tip-pooling and tip-credit rules differ by country and state — confirm your policy complies with the law where you operate.
Generated by Bzz · bzz-app.com
Saved on this device — edit anytime and reprint.
A smoother shift, fairer tips
Bzz is a free digital buzzer for restaurants and bars. Guests scan a QR code and get pinged when their table’s ready — so you turn tables faster and your team earns more to share.
Questions
- Can a manager keep tips in the US?
- No. Under the FLSA, employers, managers and supervisors cannot keep employees’ tips or take a share of a tip pool — whether or not a tip credit is taken. A manager may keep only tips a customer gives them directly for service they alone provided.
- Can cooks and dishwashers be in a US tip pool?
- Only if the employer pays the full minimum wage and takes no tip credit. Since the 2018 FLSA amendment, back-of-house staff may be included in a mandatory tip pool in that situation.
- Do I have to re-enter my staff and percentages?
- No. The generator reuses the roles and percentages you entered in the tip-out calculator (saved in your browser). If you haven’t used it yet, it starts with a common example you can edit.
- Is this US tipping summary legal advice?
- No. It’s a plain-English summary of the named law with a link to the primary source, provided for general guidance. Confirm the current rules for your specific situation before setting a policy.