Payday and in-house tips

Happy Labor Day weekend everyone!

I wanted to get y’alls thoughts on a couple of things:

  1. Do you have a particular day of the week you chose as your payday or is it just every 2 weeks on a Friday? If not, why the different day of the week?
  2. How do you deal with in-house tips? I’ve a pickup and delivery joint. Drivers get their delivery fee and keep all tips every night. I haven’t figured out a good way to divvy up in-house tips.


I pay every second Thursday. The cutoff is the previous Friday. I chose this method because there is a legislated maximum number of days from cutoff to payday. By paying on Thursdays the bank is not as busy for the employees to deal with their needs.

In house tips are pooled and about 4 times a year I distribute the tips based on total hours worked by all employees. Each employee get the percentage of tip money compared to the percentage of the total hours they have worked.

Our inside employees split the cash tips each night. Once when the early people leave and again at the end of the night.

CC tips for carryout are split by inside hours worked for the pay period and put on the paycheck.

We split tips among in store hours worked monthly. Based on percentage of hours worked like above.

This is a great idea. Do you have a formula that you use or does your accountant take care of it for you?

You can just setup a simple spreadsheet in excel or google docs.

Hours worked by an employee (H) divided by total hours worked by all employees(A) equals percent of total hours worked§. Then total tips pooled(T) times percent of total hours equals tip out to employee.
T*P=employee’s share of tips

My week goes Wednesday - Tuesday. Employees get paid weekly that following Monday for that week. I pay on Monday’s for a couple of reasons. It gives me weekend funds for payroll and I found that when I paid employees on Fridays they were able to have to much fun over the weekend and coming in to work wasn’t a priority. It’s sad to say but when I pay them on Monday most of them don’t have much left by the weekend.

In house tips get split monthly by percentage of hours that employees worked. Just make sure you keep records of what you give each employee because if the State comes a knocking they are going to want to know what happens with the tips.

Thank you so much.

Can I ask what you do for employees who have left before the tip disbursement?

Depending on the terms of their departure they may be included or excluded. Proper notice and leaving on good terms gets tipped but no show or dismissed for cause don’t.