Last updated: May 14, 2026, 10:55 AM
Toast Tips Manager is an automated, customizable tip pooling solution that calculates and distributes tips and gratuities based on your restaurant's tip pooling policy. There are two components:
Note: Tip pooling is sometimes called "tipout" or "tipping out." Tips Manager handles both pooling (where contributors and recipients are the same job) and tip sharing (where they differ).
Important: This article is for first-time setup. If your tip pooling policy is already configured and you're troubleshooting a specific issue (incorrect distribution, missing tips, employee mapping errors, or unexpected reporting numbers), see Get Help With Toast Tips Manager instead.
Important: Toast Tips Manager pooled results appear in the Tip Management report (in Toast Web) and in the MyToast app for individual employees. Pooled results do not appear on POS shift review prints or checkout slips — those continue to show pre-pool tips.
Important: There is also a separate Toast feature called Tip Sharing in Advanced Shift Review Setup. Tip Sharing is not Tips Manager — it's an older shift-review-based tool. If you use Tips Manager, build all your tip pooling and tip sharing rules in Tips Manager (Toast Web > Employees > Payroll management > Tips pooling policy), not in Advanced Shift Review.
By the end of this article, you'll have:
Applies to: Toast Tips Manager (paid subscription, US Toast customers).
Permissions needed:
What you'll accomplish: Complete first-time setup of Toast Tips Manager so it's ready to calculate and distribute tips for your first payroll.
Before you start, plan your policy. Setup goes faster when you've decided how tips will flow at your restaurant. See Plan Your Tip Pooling Policy before building rules — that article walks you through the policy decisions (pooling interval, contributor and recipient jobs, points vs. percentages, and special setups like communal drawer, banquets, and online ordering).
Important: Before setting up tip policies, consult an HR professional and consider federal, state, and local laws when defining your restaurant's tip policy. The federal government outlines tip-pooling regulations in the Fair Labor Standards Act (FLSA). State and local governments may have additional regulations.
Toast Tips Manager is available to all US Toast customers as a paid subscription. To check pricing or activate Tips Manager, see Toast Tips Manager in the Toast Shop.
You no longer need Toast Payroll to use Tips Manager, but the integration unlocks automatic timesheet imports and faster employee payouts (see Step 2g).
Expected outcome: Tips Manager appears in your Toast Web menu under Toast Web > Employees > Payroll management > Tips pooling policy.
First, review the settings under Validate Settings. This page consists of mapping different tip types to their earning codes in Payroll. The settings in this step affect how Tips Manager calculates and distributes tips. Confirm each one before you build your first rule.
Tips Manager distributes tips based on the job an employee is clocked into, not on a per-employee basis. For Tips Manager to work correctly, every employee must be clocking into the correct job in Toast Web, and every job must be assigned appropriately to your tip pooling policy.
If you need to add or edit jobs, see Create and Edit Jobs (Roles) for Toast POS.
Expected outcome: Each job that should contribute or receive tips exists in Toast Web and has the correct configuration.
If you plan to pool tips by Service Period (one of three pooling intervals — the others are Full Workday and Order), your hours and services must be configured first. The Hours/Services configuration becomes the basis for when each employee's tips are collected.
To configure hours, navigate to Toast Web > Reports > Settings > Hours/services.
For more on choosing a pooling interval, see Plan Your Tip Pooling Policy.
Expected outcome: Hours/services exist for every period during which tips will be pooled.
If you plan to calculate tip pools or tip shares based on the sales employees make from certain categories (for example, Food, N/A bev, alcohol), every menu item must have a sales category assigned. Items with no sales category will not contribute to those pools — a common cause of unexpected tip distributions.
To find items without a sales category:
Important: Sales categories are not retroactive. The system only tracks sales categories from the moment you publish the changes. If you recently assigned categories, wait out your current pay period before building tip rules that use a percentage-of-sales source.
To assign or create sales categories, see Assigning Sales Categories in the Menu Builder.
Expected outcome: Every menu item that contributes to tip pools has a sales category assigned.
You can include specific types of mandatory gratuities in each tip rule using the checkbox next to the gratuity type. Mandatory gratuity is a type of service charge added to the check by the restaurant and paid to an employee as wages — it's distinct from voluntary tips.
To set up a service charge as a mandatory gratuity, see the "Mandatory Gratuity in Toast" section of Get Started With Service Charges and Mandatory Gratuity.
Expected outcome: Mandatory gratuities you want to pool are configured as service charges of type Mandatory Gratuity.
Tip withholding allows your restaurant to reclaim a percentage of employee credit card tips and gratuities to cover the cost of credit card processing fees. To set this up, see Tip Withholding.
Important: Tips Manager does not retroactively update when you change the tip withholding percentage. After a change, future tip distributions reflect the new percentage; past distributions stay as they were. This may cause discrepancies between Tips Manager and the Sales Summary.
Tip withholding is applied before tips are pooled. The Labor Summary displays the amount before tip withholding; Tips Manager displays the amount after.
Expected outcome: If your restaurant uses tip withholding, the percentage is configured before you build your tip pooling policy.
These settings prevent premature distribution of tips at clock-out and prevent undeclared cash tips from leaking out of Tips Manager.
While you can pay out cash tips, non-cash tips, or gratuities differently, the settings above are required for Tips Manager to work correctly. For more on Shift Review, see Shift Review Overview.
Expected outcome: All four Advanced shift review settings match the configuration above.
If your restaurant uses Toast Payroll, follow the steps in Tips Manager With Toast Payroll to:
The Tips Manager With Toast Payroll article is required for Toast Payroll customers. Toast does not configure earning codes automatically.
Expected outcome: Employees are mapped, earning codes are assigned, and the cash-tip payout method is selected in Toast Payroll.
Before you build a rule, decide on your policy:
Expected outcome: You know which contributor and recipient jobs go in your first rule, the source, the percentage, and the distribution method.
You can build your first rule using the Tips Manager onboarding wizard or by adding a pool manually. The wizard is recommended for first-time users; manual setup is faster once you've built a rule.
Expected outcome: The wizard saves your first rule and the policy page shows the rule with its contributor and recipient jobs.
Expected outcome: Your first rule appears on the tip pooling policy page with the contributor job, source, percentage, recipient job, and distribution method you specified.
If you create more than one rule, the order matters. Tips Manager reads your policy from top to bottom and calculates as it goes — a tip that's been pooled into a recipient in an earlier rule is not available for redistribution in a later rule unless you order the rules to make it so.
To reorder rules, use the Move up and Move down buttons at the bottom of each pool. (These buttons appear only when more than one rule exists.)
For worked examples, see the Order of Operations section of Plan Your Tip Pooling Policy.
If you have sales data in Toast, validate your policy with Preview:
For more on Preview, see Plan Your Tip Pooling Policy.
Expected outcome: The Preview shows tip distributions that match your policy intent for a recent date.
After you save:
Important: If you adjust a policy expecting it to take effect for a date that's already passed, the change won't apply to that date. To change tip distributions for a past date, unapprove the date, edit your policy or time entries, then reapprove.
Note: First-time customers will not see Approve tips or Unapprove tips until first payroll has been run. Until then, the policy page shows Validate Settings instead.
Expected outcome: Your tip pooling policy is saved. Tips Manager begins calculating tips for new days. To approve tips and send them to payroll, see Toast Tips Manager Reporting.
This content is for informational purposes and is not intended as legal, tax, HR, or any other professional advice. Please contact an attorney or other professional for specific advice.