Last updated: Jun 26, 2026, 11:47 AM
This article lays out general guidelines for Toast's interaction with tips, gratuities, service charges, and more.
Toast records all tips placed in the system. By default, Toast associates each tip with the employee who manages the order. You can keep tips with that employee or move all or part of them to other employees.
There are several ways to move tips between employees. You can pool tips (with or without Toast Tips Manager), tip share, pay out tips in cash, or pay out tips through payroll. You can also use alternative options such as a Toast Pay Card or a cash distribution app.
Cash tips are tracked only when employees report them during their shift review as declared tips. Cash tips are commonly paid out to employees at the end of each shift, but they can also be carried into Toast Payroll, where they appear on employee timesheets and are paid out as part of your pay cycle. Employees must declare cash tips at the end of their shift on the POS for those tips to flow to payroll.
Credit card tips are credited to the business account. This means your restaurant's daily deposit includes employees' credit card tips, and when those tips are distributed, the amounts are funded by the business rather than the guest. Like cash tips, credit card tips can be distributed in cash or through payroll.
Note: You decide whether employees receive credit card tips as a cash payout at the end of their shift or on their paycheck. This is controlled by your tip and earning code settings. For setup details, see Toast Payroll: Manage and Integrate Tips.
Tips from online orders can be managed in more than one way.
By default, online ordering tips are deposited into your restaurant's bank account. These tips can be distributed through a placeholder "online server," which lets pooled tips be allocated correctly. If you use Toast Tips Manager, see Tips Manager and Online Ordering to include online ordering tips in your tip pool.
For catering orders, tips may flow into a placeholder employee account so they can be redistributed accurately. See the "How do employees receive invoice-related tips?" section of Get Help With Toast Catering and Events. Toast Tips Manager users can set this up with Set Up Toast Tips Manager for Catering and Events.
If no server is assigned to an online order, the tip may default to the server who closes the check, which can cause discrepancies. Toast recommends assigning servers properly so tips are tracked accurately.
Note: Online ordering tips need a recipient who is clocked into the receiving job in order to distribute through a tip pool. If no eligible employee is clocked in, the pooled amount may not distribute as expected.
Distribution is how a tracked tip moves from the employee who collected it to the employee or employees who should receive it. You can distribute tips by paying them out in cash, pooling or sharing them, or sending them to payroll.
When you pool tips, you decide which jobs contribute tips and which jobs receive them. A job set only to contribute, and not set as a recipient, will not receive any tips from the pool. If an employee is not receiving an expected share, confirm that their job is configured as a recipient in your tip pool policy.
Tip pools can be configured by points or by percentages, and the two behave differently when an expected role is not clocked in. Reviewing your settings before you turn pooling on helps you predict the result. For full configuration options and to preview your results, see Get Started With Toast Tips Manager and Plan Your Tip Pooling Policy.
Service charges and mandatory gratuities are different things in Toast. A service charge is a fee a restaurant collects separately from the items a guest orders. A mandatory gratuity is a special type of service charge that ends up with an employee as non-tip wages. Mandatory gratuity is commonly paid out through payroll, but it can also be paid in cash.
You decide which service charges are paid to employees and which are kept by the restaurant as income. For the difference between these charges and how each is handled, see Get Started With Service Charges and Mandatory Gratuity. To set up a service charge, see Customize Service Charges and Mandatory Gratuity.
Note: A delivery fee or other subcharge on a receipt is not the same as a tip. If you are unsure whether a charge is a tip, a service charge, or a fee, review your service charge settings or contact Toast Customer Care.
Toast Tips Manager is Toast's solution for tip pooling and tip sharing. The module works best with Toast Payroll but can be used without it. Toast Tips Manager has two main features: the tip pooling policy page, where you set up and enable your restaurant's own tip philosophy, and the tip management report, where you gather the results of your tip policy.
Because Toast Tips Manager offers many options, begin with Plan Your Tip Pooling Policy to align your tip philosophy with the features available. When you are ready to build a policy and start pooling or sharing tips, Get Started With Toast Tips Manager walks you through the settings. Use the Preview feature to predict your tip policy results before you turn it on.
Cash tips, credit card tips, and mandatory gratuity can all be paid to employees through Toast Payroll. Whether a tip is paid out at the end of a shift or on a paycheck depends on your tip and earning code settings.
For an overview of using tips across Toast POS and Toast Payroll, see Toast Payroll: Manage and Integrate Tips. If tips are not appearing in payroll, see Get Help With Tips Not Sending to Payroll.
Note: If your location uses Toast POS without Toast Payroll, the option to send tips to your payroll provider may appear differently, and tips route to your external payroll provider rather than Toast Payroll.
Salaried employees may receive tips when their job is set as a recipient in your tip pool policy. Review your tip pool policy and confirm which jobs are set to receive tips. For configuration help, see Get Started With Toast Tips Manager.
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Credit card tips may not appear in the tip pooling report if there is a configuration issue with how tips are contributed or received in your policy. Confirm that the jobs collecting credit card tips are contributing to the pool and that eligible recipients are clocked in. For reporting details, see Toast Tips Manager Reporting.
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To send tips to payroll, your employees must be mapped correctly and your tip and earning code settings must be configured. For an overview, see Toast Payroll: Manage and Integrate Tips. If tips still are not sending, see Get Help With Tips Not Sending to Payroll.
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A service charge may be included in your tips total depending on the report you are viewing, because the tip management report includes gratuity. A service charge is separate from the items a guest orders, while a tip is left voluntarily by the guest. For the difference, see Mandatory Gratuity and Service Charges in Toast POS and Payroll.
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Tips on a report may not match what employees received because declared tips are recorded before pooling, while the amount an employee takes home reflects the result of your tip pool. If you use Toast Tips Manager, use the tip management report to determine what each employee is owed. For help with mismatched tip amounts, see Get Help With Tip Discrepancies in Reporting.
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Employees see their tips in their pay records and, depending on your setup, in the employee app. If an employee cannot see their tips, confirm how tips are paid out at your restaurant and that their employee profile is set up correctly. For payout details, see Toast Payroll: Manage and Integrate Tips.
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