Most tip pools have a policy. Far fewer have one written down. The formula lives in the closing manager's head, the exceptions live in a group chat, and the new hire learns it by asking a server on their second shift. That works until the manager is off, the server is wrong, or someone asks to see it in writing.
This is what a tip pooling policy should cover, in the order your team will actually read it. There is a template outline at the end.
Why write it down
Three reasons, in order of how often they come up.
The first is disputes. A server who thinks the split was wrong, and a manager who cannot show them the rule, is an argument at 11pm. A written policy ends it in a sentence.
The second is consistency. Across five locations, "how we do tips" drifts. A written policy is the thing every location is measured against.
The third is the one nobody wants to think about. If your tip practices are ever questioned, by a state agency, a lawyer or an auditor, the first thing anyone will ask for is the written policy. Some states require written notice to employees about tip pooling arrangements. Check yours.
What the policy should cover
1. Who is in the pool.
List the roles, not the names. Servers, bartenders, bussers, runners, hosts. Say explicitly who is not in the pool, and say that managers and supervisors are never in it. If you have locations that take the tip credit and locations that do not, the rules on including back-of-house differ, and the policy needs a version per location.
2. What goes into the pool.
Which tips are pooled: card tips, cash tips, both. Whether service charges are handled separately (they should be; they are not tips). Whether tip-outs to support staff come out before or after the pool.
3. How it is split.
The method, in plain words. Points by role, hours worked, a percentage, or a combination. Show the point values or percentages. Give one worked example with real-looking numbers. If your team cannot follow the example, the policy is not finished.
4. When it is calculated.
At the end of each shift? Each day? Each week? Who runs the calculation, and where the data comes from (the POS, the schedule, a sheet).
5. When and how it is paid.
Cash at close, through payroll, or digitally at shift end. If digitally, where the money lands and what, if anything, it costs the worker.
6. What happens when the roster changes.
Someone calls in sick. Someone leaves two hours early. Someone covers a different role for half the shift. Say how each of these is handled. This is the section that stops most disputes, and the one most policies skip.
7. How mistakes are corrected.
Who a worker asks if a payout looks wrong. How quickly it is checked. How a correction is paid.
8. Where to see the rules and the numbers.
Where the policy lives (staff handbook, the back office wall, the app). Where a worker can see their own allocation. Transparency is what makes a policy trusted rather than tolerated.
9. When it was last updated, and who approved it.
Tip rules change. A policy with a date on it is a policy someone is responsible for.
The template outline
Copy this into a document and fill it in. Every bracket is a decision you need to make, not a suggestion from us.
[Restaurant / Group name] Tip Pooling Policy
Effective: [date]. Last reviewed: [date]. Approved by: [name, role].
1. Who participates. The following roles participate in the tip pool at [location(s)]: [roles]. The following roles do not: [roles]. Managers and supervisors do not participate in the tip pool under any circumstances.
2. What is pooled. [Card tips / cash tips / both] are pooled. Service charges are not tips and are handled under [separate policy]. Tip-outs to [roles] are made [before / after] the pool is calculated at [rate].
3. How the pool is split. The pool is split by [points / hours / percentage / combination]. [Point values or percentages by role.] Example: [worked example].
4. When it is calculated. The pool is calculated [at shift end / daily / weekly] by [role or system], using [data source].
5. How it is paid. Tips are paid [in cash at close / through payroll on the next pay date / digitally at shift end to a pay card or bank account].
6. Roster changes. A worker who leaves early receives [rule]. A worker who covers another role receives [rule]. A worker who is sick receives [rule].
7. Questions and corrections. If your allocation looks wrong, contact [name or role] within [time]. Corrections are checked within [time] and paid [how].
8. Where to find this policy and your allocations. [Location of policy]. [Where workers see their allocations.]
This policy complies with federal law and the laws of [state(s)]. It is reviewed at least [annually].
Where Ferry fits
A policy tells everyone how the pool works. The hard part is making the close actually follow it, at every location, on the nights the manager is new and the roster changed twice.
Ferry Tip Manager is where the policy becomes the configuration. Who is in the pool, how it is weighted, how partial shifts are treated: set once per location, applied automatically at every close, with no manager intervention at shift end. Workers can see their own allocations, and with the Tip Share App, tip-earning employees can manage their own tip allocations from inside the POS (currently live in PosiTouch and CBS North Star).
Write the policy. Then let it run itself. Book a demo.
FAQ
What should a tip pooling policy include?
Who participates and who does not, what is pooled, how the pool is split with a worked example, when it is calculated, when and how it is paid, what happens when the roster changes, how mistakes are corrected, where workers can see the rules and their allocations, and the date and approver.
Does a tip pooling policy have to be in writing?
Some states require written notice to employees about tip pooling arrangements. Even where it is not required, a written policy prevents disputes, keeps locations consistent, and is the first thing asked for if your practices are questioned.
Can managers be included in a tip pooling policy?
No. Under federal law managers and supervisors may not take from a tip pool. A written policy should say so explicitly.