It is Sunday night. The tip jar is full, the card machine says how much went on cards, and three people want their share. One worked five shifts. One worked three. One came in for two. Somebody always ends up a dollar short, and everybody remembers it.
This guide is for owners of small cafes, bars, restaurants, salons and barbershops who share one tip jar. Many are new shops, and many owners are doing this for the first time. You will get the formula, a worked example that adds up to the cent, and a written rule your team can check.
The short answer
Add up all the tips. Add up everyone's hours. Divide the tips by the hours. That gives you the tips for one hour. Then multiply each person's hours by that number.
The only hard part is the cents. Shares rarely come out to a whole cent. If you round each share on its own, the total can end a cent or two away from the jar. The fix is simple: round every share down, then give the leftover cents out one at a time. This guide shows how.
If you want the answer now, type the tips and the hours into the free Tip Pool Calculator. It gives each share to the cent, and the shares add up to the jar exactly. There is no sign-up.
The formula
One person's share = total tips × their hours ÷ everyone's hours.
You can also do it in two steps:
- Tips for one hour = total tips ÷ everyone's hours.
- One person's share = tips for one hour × their hours.
Both give the same answer. The two-step way is easier to explain to the team. Everyone can see the rate for one hour and check their own share.
A worked example, to the cent
These are the Tip Pool Calculator's starting numbers. They are an example. Type your own over them.
| Name | Hours this week |
|---|---|
| Alex | 32 |
| Sam | 24 |
| Jo | 16 |
| Total | 72 |
The tips to share for the week: $640.00.
Step 1. Tips for one hour
$640 ÷ 72 hours = $8.888… for each hour. The 8s never stop. That is the reason the cents need a rule.
Step 2. Each share before rounding
It is easier to work in cents. $640.00 is 64,000 cents.
- Alex: 64,000 × 32 ÷ 72 = 28,444.44… cents
- Sam: 64,000 × 24 ÷ 72 = 21,333.33… cents
- Jo: 64,000 × 16 ÷ 72 = 14,222.22… cents
None of these is a whole cent. You cannot hand anybody 0.44 of a cent.
Step 3. Round every share down
- Alex: 28,444 cents ($284.44). The part left over is 0.44.
- Sam: 21,333 cents ($213.33). The part left over is 0.33.
- Jo: 14,222 cents ($142.22). The part left over is 0.22.
Add them up: 28,444 + 21,333 + 14,222 = 63,999 cents. That is $639.99. One cent is still in the jar.
Step 4. Give out the leftover cents
The leftover cents go one each, starting with the person whose share was closest to the next cent. That is the person with the biggest part left over.
Here only 1 cent is left. Alex's part left over (0.44) is the biggest, so Alex gets it.
| Name | Hours | Share |
|---|---|---|
| Alex | 32 | $284.45 |
| Sam | 24 | $213.33 |
| Jo | 16 | $142.22 |
| Total | 72 | $640.00 |
Check it: $284.45 + $213.33 + $142.22 = $640.00. The jar is empty, and nobody is short.
A smaller example: three equal shifts
Say $100 is shared by three people who each worked 8 hours. Each share is $33.333…, which is not a real amount.
Round all three down to $33.33. That makes $99.99, so 1 cent is left. All three are equally close to the next cent, so the calculator gives it to the first person on the list. The shares are $33.34, $33.33 and $33.33. The total is exactly $100.
If the same person always gets the odd cent, change the order of names each week. Over a year it is a few cents, but it is fair to show you thought about it.
What counts as an hour
The formula is easy. The arguments start over which hours count. There is no single right answer here. Each line below is a choice. Pick one, write it down, and use it every week.
- Breaks. Do paid breaks count? Do unpaid breaks count? Many teams count the hours on the timesheet, so a paid break counts and an unpaid break does not. Whatever you pick, use the same source of hours for everyone.
- The closer who stays late. The person who cleans and closes may work 45 minutes after the last customer leaves. Do those minutes count? If you count the hours on the timesheet, they count. Some teams agree that only hours with customers in the shop count. Decide before the first argument.
- Training shifts. Does a new person in training get a full share for those hours? Some teams count training hours in full. Some count them after the first week. Some count half. To count half, type half the hours into the calculator.
- Partial hours. Use the real time, for example 6.5 hours or 6.75 hours. The calculator takes decimals. Do not round everyone to whole hours, because that moves money between people.
- Days off and sick days. Hours not worked are usually not counted. A row with no hours is left out of the split.
- Who is in the pool. Write down which jobs share the jar. For example, everyone who serves customers, or everyone on the floor. See the legal note below before you add an owner or a manager.
Card tips and cash tips: keep one total
Most shops get tips in two ways: cash in the jar, and tips added on the card machine. Splitting them separately doubles the work and the rounding. Add them into one total first.
- Card tips. At the end of the week, open your card machine or POS report. Find the tip total for the same dates. Write it down.
- Cash tips. Count the jar. Count it with a second person if you can. Write the amount down.
- Add them. Card tips + cash tips = the one total you split.
- Pay out. Decide how each person is paid: cash from the jar, through payroll, or both. Write that choice down too.
Count each tip once. A common mistake is to put card tips in the cash drawer as cash and then count them again from the report.
If you already do a cash-up at close, the free Daily Cash-Up Spreadsheet has a Tip split tab next to the daily cash-up. Note that its Tip split tab rounds each share on its own, so its Total row can land a cent either side of the jar. It shows that total rather than hiding it. For the exact cents, use the calculator. Our guide to the daily cash-up sheet walks through every tab.
A weekly routine for the tip split
- Pick one day. For example, every Monday morning for the week before. Tell the team the day.
- Get the hours. Use the timesheet or the schedule, with the real times. Check it with each person if a shift changed.
- Get the tips. Card tips from the report, plus the cash count. Add them into one total.
- Run the split. Type the total and each person's hours into the tip calculator. Up to 15 people fit in one split.
- Show the result. Put the table where the team can see it, or send it to the team. Show the total, the hours, and the tips for one hour.
- Pay out. Pay the same day every week.
- Keep a record. Write the shares in a notebook or a spreadsheet, or keep a screenshot. The calculator does not save what you type. If somebody asks about a week in March, you can show them.
Write your tip rule down
A rule in someone's head changes when that person is tired. A rule on paper does not. Here is an example rule. Copy it and change every line your team decides differently.
Our tip rule
- All tips go into one pool: the cash jar and the card tips.
- We split the pool every week, on Monday, for the week Monday to Sunday.
- Everyone who works on the floor or at the counter is in the pool.
- Owners, managers and supervisors do not take from the pool.
- Each person's share = total tips × their hours ÷ everyone's hours.
- Hours are the hours on the timesheet. Paid breaks count. Unpaid breaks do not.
- Closing time counts until the person leaves.
- Training shifts count in full from the first day.
- Shares are rounded down to the cent. Leftover cents go one each to the people closest to the next cent.
- Tips are paid every Monday, and the table is posted in the back room.
- Questions go to the owner by Wednesday. After that, the week is closed.
- Any change to this rule is written here, with the date, before it starts.
Ask each person to read it and sign it. Give a copy to each new person on their first day.
The one legal line you must know
Under US federal law, the Fair Labor Standards Act (as amended in 2018), employers, including managers and supervisors, may not keep any part of employees' tips. That includes taking tips through a tip pool. The US Department of Labor explains it on its tips page (read 22 Oct 2026) and in Fact Sheet #15 (read 22 Oct 2026).
State laws and other countries have their own rules. The Department of Labor's tips page links to state labor offices. Check your state or country before you set up a pool, and ask a local accountant or employment lawyer if you are not sure.
Other ways teams split tips
Hours are the most common way because everyone can check the sum. Some teams use other methods.
- By role. Each job gets a fixed share of the pool. For example, the team agrees one share for the counter and one for the kitchen, then splits each share by hours.
- By points. Each role earns a set number of points for each hour. A person's points are their hours times their role's points. The pool is split by points instead of hours.
- Equal shares. Everyone who worked that day gets the same amount, whatever their hours.
- Per shift. Each shift splits its own tips at the end of that shift.
Each method can be fair if the team agrees to it and it is written down. The Tip Pool Calculator does the hours method only. If you split by points, you can type each person's points in the hours box, and the sum comes out the same way.
Common mistakes
- Rounding each share on its own. The total ends a cent or two away from the jar. Round down, then give out the leftover cents.
- Changing the rule week to week. Write it down once. Change it only in writing, with a date.
- Forgetting the part-timer. The person who covered one shift on Saturday is easy to miss. Check the timesheet, not your memory.
- Counting card tips twice. Take card tips from the report once, and keep them apart from the cash count.
- Owners or managers taking from the pool. Under US federal law they may not keep employees' tips. Check the rules where you are.
- No record. Keep every week's table. It ends most arguments in one minute.
- Paying late. Tips paid on the same day every week stop a lot of questions.
Where KANJIN helps
Everything above works with a pen, a timesheet and the free calculator. If you want more in one place, KANJIN (kanjin.app) has a free plan, with no credit card and no time limit.
- Team pay planner. In the back office, the Paying your team screen compares an hourly wage, a cut of each sale and chair rent, with your numbers from one real shift. The figures stay with your shop, so you can come back next week. For salons and barbershops still choosing between rent and commission, the free Booth Rent vs Commission Calculator and our guide on how much to charge for booth rent cover it.
- Staff logins. Staff logins are free. Each person signs in with their own email.
The honest limits: KANJIN does not split tips inside the app, run payroll, read your card machine's tip report or work out tax. The tip split is the free calculator.
Square, Toast and Clover are trademarks of their owners. KANJIN is not affiliated with them.
Frequently asked questions
How do you split tips by hours worked? Add all the tips into one total. Add up everyone's hours. Divide the tips by the hours to get the tips for one hour, then multiply by each person's hours. Round each share down to the cent, and give the leftover cents one each to the people closest to the next cent.
Can a manager take tips from the tip pool? In the United States, federal law says employers, including managers and supervisors, may not keep any part of employees' tips, including through a tip pool. State laws and other countries have their own rules. Check the US Department of Labor's tips page and your own state or country.
How do I split tips on Square or Toast? Run your POS's report for the week and find the tip total for those dates. Add the cash tips from the jar. Then split that one total by hours worked, with the timesheet hours, in a calculator or a spreadsheet.
Is there a tip pool calculator in Excel? Yes. The free Daily Cash-Up Spreadsheet has a Tip split tab that splits the jar by hours worked. It opens in Excel and Google Sheets. It rounds each share on its own, so its total can land a cent away from the jar. For shares that add up exactly, use the online Tip Pool Calculator.
Why do the cents not split evenly? Because most shares are not a whole number of cents. $100 across three equal shifts is $33.333… each. Round down, then give the 1 leftover cent to one person: $33.34, $33.33 and $33.33, which is exactly $100.
Your next step
Open the free Tip Pool Calculator and type last week's tips and hours. Post the table for the team, and write your tip rule under it.
Then give your regulars a reason to return: KANJIN's free stamp card works on the customer's phone number, with no app to download. Create your free KANJIN account.