Tip collection at the point of sale
Card-based tipping on the terminal or ordering screen captures tips automatically at the moment of payment, with amounts and percentages configurable so the prompts match what's normal for your business type.
Individual vs pooled tips
Some businesses keep tips with the employee who earned them; others pool and split by hours worked or role. The right model depends on your service structure, and most POS platforms support configuring either.
- Individual: tips tracked and paid per employee
- Pooled by hours: split proportionally to hours worked
- Pooled by role: front-of-house and back-of-house split differently
- Tip-out rules can vary by shift or day
Reporting tips accurately
Tip reports broken out by employee and shift are needed both for fair payout and for tax reporting, since tips are taxable income that needs to be reported consistently.
Cash tips vs card tips
Card tips are tracked automatically by the POS; cash tips generally are not, unless staff record them. A consistent policy for logging cash tips avoids under-reporting and disputes at payout time.
Payout timing
Card tips can be paid out same-day in cash, added to the next paycheck, or in some cases sent via instant payout — the right approach depends on cash flow and what your payroll process can support.
Tip credit and minimum wage rules
In states that allow a tip credit toward minimum wage, tip and wage records need to clearly show that the combined total meets the required minimum. Rules vary by state, so check current requirements rather than assuming.
Keeping the process transparent
Posting the tip pool method and split percentages where staff can see them reduces disputes far more than any software feature. The system should make the numbers easy to show, not just easy to calculate.