The steps
- Add up the tips. Total all the tips for the shift: cash from the jar or drawer plus card tips from your point-of-sale report.
- Write down everyone's hours. List each person in the pool and the hours they worked. Convert hours and minutes to decimal hours by dividing the minutes by 60, so 4:40 becomes 4.667.
- Add up the total hours. Add everyone's hours together to get the total hours worked by the pool.
- Work out tips per hour. Divide the total tips by the total hours. This is what one hour of work earns from the pool.
- Calculate each share. Multiply each person's hours by the tips per hour. The results are everyone's exact shares.
- Round so it adds up. Round every share down to the whole dollar (or cent). Add up the rounded shares and subtract from the total tips to find the leftover. Give the leftover one dollar at a time to the people whose exact shares had the largest fractions.
- Check and record. Make sure the payouts add up to the total tips exactly, then write the split down so it can be checked later.
Worked example
A shift brings in $150 in tips. Three people worked:
| Person | Hours (as written) | Decimal hours |
|---|---|---|
| Alex | 6:15 | 6.25 |
| Blair | 4:40 | 4.667 |
| Casey | 3.5 | 3.5 |
| Total | 14.417 |
Tips per hour: $150 ÷ 14.417 hours = $10.40 per hour (more precisely $10.4046).
| Person | Exact share | Rounded down | Fraction | Payout |
|---|---|---|---|---|
| Alex | $65.03 | $65 | 0.03 | $65 |
| Blair | $48.55 | $48 | 0.55 | $49 (+$1) |
| Casey | $36.42 | $36 | 0.42 | $36 |
| Total | $150.00 | $149 | $150 |
Rounded down, the shares add up to $149, leaving $1. Blair's share had the largest fraction (0.55), so Blair receives the extra dollar. The payouts are $65, $49 and $36: exactly $150.
The Tips.cx calculator does all of this as you type, takes hours as 6:15 or 6.25, and marks who received a rounding dollar.
Why not just round normally?
Rounding each share to the nearest dollar seems fair, but the totals often don't match. Three people with exact shares of $33.33 each round to $33, $33 and $33, which is $99 from a $100 pool. With other numbers, normal rounding pays out more than you have. Rounding down and handing out the leftover by largest fraction always uses exactly the money in the pool.
What about ties?
Sometimes two people's fractions are exactly equal, for example when they worked the same hours. Pick a rule and stick to it. Tips.cx gives the extra dollar to the person who worked more hours, and if hours are equal too, to whoever is higher on the list. Writing your rule down saves arguments later.
Common mistakes
- Treating 4:40 as 4.4 hours. Forty minutes is two-thirds of an hour, so 4:40 is 4.667 hours. This one mistake shifts money between people every shift.
- Using scheduled hours. Use the hours people actually worked, including early cuts and late stays.
- Forgetting card tips. Add card tips from your point-of-sale report before you split, not after.
- Not keeping the numbers. Write the split down on a tip sheet, or keep it as a record. See tip records.
Some teams also give roles different shares per hour. That's still a split by hours, with a weight per person. The calculator supports it with "Use role weights", and a Tips.cx account (7-day free trial) saves every split.
This is general information, not legal or tax advice. Tip pooling rules vary by state, so check your state's labor department or an advisor.