How restaurant tips work

It's safe to say that if you're taking a restaurant job you're not just doing it for your health. The lure of big tips and cash-in-hand is great, and something many can't refuse when weighed against other full-time and part-time jobs.

While the odds aren't great that you'll become a millionaire waiting tables, you could make a decent living at it. But that all depends on how good you are at your job. You aren't the only one depending on your ability to rake in the tips either. In most restaurants, other employees depend on the tips of waiters and waitresses to supplement their hourly wages. If that's news to you, here's some insight on how it's done:

The honor system
Not every restaurant enforces tip sharing by rule, but it's still a good idea. If you want the host to seat you with the best tables and your drinks made correctly by the bartender, it's in your best interest to recognize them for all their hard work. Recognize here is a euphemism used loosely to mean "pay." Most restaurant employees are paid small hourly wages with the idea that their salary will be augmented by wait staff. Pay them fairly out of your tips, especially if you aren't required to. Hell hath no fury like a busser scorned.

Many restaurants require or recommend their wait staff to tip a certain percent of their tips or net sales to the various support staff. All the wait staff may be required to put in 20% of their tips, or 1% of their net sales, into a shared pot that is divided by managers between bussers, bartenders and hosts. Some state laws prohibit tip sharing to be extended to supervisors and managers, but they rarely make the list anyway.

Tip pool
Similar to percentage tipping, tip pooling has all tips from every server and bartender pooled into one pot, which is then distributed to servers and support staff based usually on percentages. Think of it as restaurant socialism; it makes sure that even when you have a bad night, it won't be that bad.

Extremely popular in New York City restaurants, the point system is a little more complicated. In restaurants that use the point system, all of the tip money is pooled together. The money is then divided up with each role earning a specific number of points. Here's the math:

For the purpose of this exercise let's say that there are five servers who brought in a total of $2,000 in tips and they each earn 10 points. On the same night there are three bussers, one expo and two bartenders, and they all earn five points each.

Five Servers x 10 points (50) + three bussers x five points (15) + one expo x five points (5) + two Bartenders x five points (10) = 80 total points $2000 divided by 80 points = $25 per point.

Each server would walk away with $250 (or around 60 percent of their total tips) and all the other employees would have $125 for this shift. No matter how the restaurant you work for (or want to work for) doles out tips, the lesson here is that everyone has a role in the success or failure of any given day at a restaurant, and should be paid accordingly.

Source: Amy White
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