Pay Out Tips and Gratuities in Cash While Using Toast Tips Manager

In this Article:

• Pay Out Tips and Gratuity in Cash Overview
• What to Expect
• Pay Out Cash Tips and Gratuities
• Balance the House Bank With Cash Tip Payouts
  • Reconcile a Tips Payout Via a Cash Drawer
  • Reconcile a Tips Payout Outside of Toast
• Additional Resources

Pay Out Tips and Gratuity in Cash Outside of Toast Tips Manager

This guide explains how to pay out tips and gratuities in cash to employees at the end of a shift while using Toast Tips Manager. While Toast offers payroll integration for tip distribution, this guide outlines the process for businesses that prefer cash payouts. Our goal is to ensure you can efficiently distribute tips to your employees, regardless of your chosen method.

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What to Expect

• No changes in Toast Web: Your Toast Tips Manager policy will remain unchanged. The Pay out through payroll settings in Employees > Shift review > Advanced shift review setup in Toast Web will also remain unchanged.
• New operational process via the Tip Management report: Tip distribution will now be managed through the Tip Management report rather than the shift review (checkout) process.
• Employee training: Consider conducting training on both the cash handling process and Toast Tips Manager before the start of a new pay period to ensure all staff are familiar with the updated procedure.
• House bank reconciliation: This guide will also cover how to account for cash tip payout from the house bank.
  • The term "house bank" refers to the restaurant's total cash on hand. Often times, a restaurant's house bank is not directly tracked with Toast Web or Toast POS devices.

Pay Out Cash Tips and Gratuities

1. Complete an employee's as usual. At the end of the shift, employees will submit all cash sales and gratuities to the restaurant.
2. Below is a breakdown of when cash tips should be paid out based on the job worked. By following these guidelines, this will ensure that the tip amounts displayed on the are accurate with what the staff took home.
   1. Jobs that are contributing or "tipping out" (e.g. servers): These employees can typically receive cash payouts at the end of their shifts.
   2. Jobs that are receiving pooled tips (e.g. bartenders, support staff): Cash payouts for these roles occur at the end of the day. Closers are most likely to be able to take home cash tips on the same night.
   3. Double shifts (working two consecutive shifts in one day): Payouts for employees working doubles are processed at the end of the second shift.
3. Update Tips Mapping in Payroll: On the Tips Mapping page in Toast Payroll (Settings > Toast > Tips), ensure your tip and gratuity types are mapped to earning codes with "Paid" in the name. Paid (rather than owed) means these tips and gratuities are not paid out on payroll and will only be recorded for tax purposes.

Balance the House Bank With Cash Tip Payouts

When using Toast Tips Manager, paying out tips in cash will result in the house bank showing a discrepancy. This is because the handoff of cash tips is not always recorded.

Reconcile a Tips Payout via a Cash Drawer

Record the total tips paid out as a Pay Out in Toast Web by using the daily total tip amount from the . This ensures cash payouts are reflected in the .

1. Follow the steps in the Enter a Pay Out on Your POS section of for steps on how to add a Pay Out in Toast Web.
2. Once that's complete, access the Tip Management report by searching for Tip management in the top search bar in Toast Web.
3. Select the day in question and use the total amount listed in the Tips and gratuity in pool tile.
   1. If your policy is split up by Shift, you will need to select each service tab and sum up the totals for each. Alternatively, you can download the entire day's report by selecting Download from the upper-right corner. Then use the sum of the Tips and gratuity after pooling column in the report.

Reconcile a Tips Payout Outside of Toast

• The house bank shortage should equal the total cash tips paid out for the day.
• Use the to get the total tip amount. This report provides the most accurate amount of claimed tips and gratuity as it takes into account both and tips tied to open shifts.

Additional Resources

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 advice.