Have you ever paused just before filling out that gratuity line and wondered, "Where will this money actually end up?" As a veteran bartender who's tasted all the flavors of tip distribution, let me give you the inside scoop.
First things first - there is no one-size-fits-all answer. Restaurants and bars use many different systems to divvy up those dollar bills you leave behind. But before we dive into the main flavors, here are some universal truths that apply regardless of the tipping system:
With that out of the way, let’s talk about the three primary flavors of systems used for allocating tips:
A quick note on #2 & #3 courtesy of Kickfin:
People often use the terms tip pooling and tip sharing interchangeably. And in reality, there’s no real legal definition for tip sharing. From a legal standpoint, we typically see the term “tip pooling” used as a broad, high-level category for the process of contributing any amount of tips to a pool and redistributing them (including what you might consider tip sharing). Learn more about the difference between tip pooling and tip sharing.
However, while tip pooling is often (but not always) based on an equal distribution of pooled tips, tip sharing is based on percentages that vary based on position. For example, servers may keep 60% of their tips and “share” the other 40% with other employees, including FOH staff like bussers and hostesses, and/or BOH staff like dishwashers and line cooks.
So, the next time you're signing that credit card slip or sliding some cash across the bar, remember: the journey of your tip is more twisted than a bartender's corkscrew. It's a wild ride from your wallet to your server's pocket, with plenty of stops along the way.
In my experience, none of these systems is universally “better” than the others. Each one has its pros and cons:
• "Keep What You Kill" can net more take-home, but also breeds cutthroat competition and leaves support staff in the dust.
• Tip pooling can create a more cohesive team, but also tends to demotivate top performers.
• Tip sharing strikes a balance between those extremes, but the calculations can get messy and complicated, which reduces transparency.
One rule all establishments must abide by is that tips are for the hardworking employees who actually earn them. No matter how much they schmooze with customers — managers and supervisors are strictly forbidden from participating in tip pools by law.
Even so, it’s not always followed. Wage theft is unfortunately rampant in the service industry, with much of it stemming from tip-skimming by ineligible employees.
I've slung drinks under every tipping system imaginable. Let me give you a taste of what it's really like out there.
At a massive Las Vegas nightclub, the "keep what you kill" system ruled supreme. It was survival of the fittest behind the bar, and boy, did it push me to become a speed demon with a shaker. Hesitate for a second? You'd get a not-so-gentle nudge from a coworker eager to snag that next big tipper. But here's where it gets juicy: this cutthroat environment bred more than just lightning-fast bartenders. It was a petri dish for “creative accounting," if you catch my drift.
Picture this: a bartender slides a "free" drink across the bar, and suddenly that $20 bill meant for the register finds a new home in their tip jar. Cash was king for these shenanigans, but credit cards weren't off-limits either. There was an art to conveniently "forgetting" a drink or two on someone's tab. The customer thinks they're getting a sweet deal, and the bartender? Well, let's just say their tip percentage suddenly got a lot more generous. It was a high-stakes game of monetary musical chairs, and everyone was trying to grab a seat when the music stopped.
At another joint, we pooled tips. Sounds fair, right? Wrong. Lazy bartenders coasted while I busted my butt, all for the same cut. Fed up, I proposed a hybrid: everyone gets 8% of their sales (the IRS minimum at the time), with the rest split evenly. Suddenly, sales soared, honest bartenders earned more, and even the slackers stepped up.
But here's a twist: sometimes pooling really does make sense. Think about bars with a busy main area and quieter satellite spots. Pooling can level the playing field and prevent staff wars over prime positions.
Ever been in charge of tipping out your own support staff? It's a nightmare of unspoken rules and office politics. Shortchange the wrong person, and suddenly the barback "forgets" to restock your ice, or security is mysteriously absent when you need to bounce a rowdy customer.
From point systems to percentages, shared registers to bar layouts - countless factors influence how your tip reaches your server. Some methods are fair and professional. Others? Let's just say they'd make a politician blush.
Here's the kicker - no matter which system is used, your server or bartender is likely not pocketing 100% of that tip you leave. It’s fair to bet they’re getting 70-80% before any taxes. And no matter how you feel about tipping, it’s a fairly ingrained system — not one that is easy to unwind, and certainly not perfect.
Maybe. But here's my hot take - don't ask your server where the tip goes. It puts them in an awkward position and doesn't change the fact that servers rely on those tips to make a living.
Instead, if you enjoyed your experience, tip generously. Trust that it's supporting the entire team that made your night out possible - from the bartender mixing your cocktail to the busser keeping your table spotless. Even if it’s not optimally distributed.
Ultimately, your tip is more than just money. It's a thank you to the hardworking folks in the service industry. And trust me, we appreciate every penny.
Cheers! 🍻
Your friendly neighborhood bartender
