Tip out percentage: what a tip-out on sales really costs you
A tip-out on sales is quoted as a percentage of sales, but you pay it out of your tips, where it’s a much bigger percentage. Two percent of sales sounds like nothing. On a $1,500.00 night where the tables tipped 15%, it’s 13.3% of everything you were tipped.
The tip-out percentage chart
The same 2% of sales to the bussers, on $1,500.00 in sales, at four tip rates:
| Tip rate | Your tips | 2% of sales | Of your tips |
|---|---|---|---|
| 15% | $225.00 | $30.00 | 13.3% |
| 18% | $270.00 | $30.00 | 11.1% |
| 20% | $300.00 | $30.00 | 10% |
| 22% | $330.00 | $30.00 | 9.1% |
The tip-out is $30.00 on every row. Your tips are what moves. The worse the tables tip, the bigger the bite, and a table that leaves nothing still costs you its 2%. A tip-out on tips doesn’t do that: it shrinks with your night.
So read a sales percentage as a tips percentage before you agree to it. Divide the sales percentage by your usual tip rate: at 20% tips, 2% of sales is 10% of your tips.
A full shift, line by line
A Friday: $1,500.00 in sales, $380.00 of it from the bar, $65.00 in cash tips and $220.00 on cards. The house rules are 2% of sales to the bussers, 5% of bar sales to the bartender, and a flat $15.00 to the food runner.
Guest tips (cash + card)$285.00
- Bussers2% of total sales ($1,500.00) $30.00
- Bar5% of bar sales ($380.00) $19.00
- Food runner$15.00 every shift $15.00
- You keep $221.00
Each tip-out is a slice of the night’s guest tips. What’s left on the right is yours.
That’s $64.00 out of $285.00, or 22.5%, and you keep $221.00. The bar line follows bar sales, so a table that drank a lot costs you more at the bar than one that ordered water. If your checkout report splits beverage sales out, use that number rather than a guess.
What it does to your hourly
Tip-outs come straight off your real hourly. On a 6.5-hour shift at $2.13, these tip-outs take you from $45.98 an hour to $36.13. The real hourly wage calculator does this for any shift or week.
Check your own tip-outs
The calculator below is set to this Friday. Swap in your sales, tips and your house’s rules.
You tip out
$64.0022.5% of your $285.00 in tips
You keep$221.00in tips
Your tip-outs
- Bussers−$30.002% of total sales ($1,500.00) = $30.00
- Bar−$19.005% of bar sales ($380.00) = $19.00
- Food runner−$15.00$15.00 every shift
The math, step by step
- Guest tips$65.00 cash + $220.00 card$285.00
- Tip-outs$30.00 + $19.00 + $15.00$64.00
- You keep$285.00 − $64.00$221.00
- Share of tips$64.00 ÷ $285.0022.5%
Track this every shift in TipCup.
If your house pools tips instead of tipping out, see how to split tips by hours.
Every amount in this guide is worked out by the same calculation code as the TipCup app.
Run your own numbers in the tip-out calculator ›
Track every shift's tips and tip-outs in TipCup.