Points and Percentages With Toast Tips Manager

In this Article:

• Points and Percentages
• Tip Pooling With Points
• Points Tip Distribution Example
• Tip Pooling With Percentages
• Percentages Tip Distribution Example
• When to Use Points or Percentages

Points and Percentages in Toast Tips Manager

Toast Tips Manager gives you two ways to split tips among your team: points and percentages. Both methods help you control how tips are shared across recipient jobs, but they work a bit differently.

• Points split tips based on shares assigned to each recipient job and can optionally take "hours worked" into account, giving you flexibility when schedules vary.
• Percentages assign a fixed portion of the tip pool to each recipient job, which can then be split evenly or by hours among the employees clocked into that role.
• If there is only one recipient job in all tip rules of a Tip pooling policy, then points vs. percentages becomes irrelevant.

Choosing the right method depends on your team setup, scheduling habits, and how you want to reward staff. We've added in details about how it work and what you may want to consider, as well as some examples below to show you how each method works in practice.

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Tip Pooling with Points

Points are one way to determine how much each recipient job will receive from the pool. With points, Toast Tips Manager considers the number of employees who worked the recipient job (and their hours worked, if Proportionally by hours worked is selected in the Advanced settings of the tip policy), then distributes the tips. Decimals can be used for more specific configurations.

Some notes on point-based distributions:
 

• Points are the default distribution type in Toast Tips Manager.
• Points do not translate into percentages.
• Key difference between points and percentages: Points are a way to distribute tips and gratuities based on a ratio. This is a way to accommodate dynamic staffing because ratios will hold regardless of how many people are clocked in.
  • For hourly splitting: The system calculates shares by multiplying job points by hours worked, then divides total tips by total points to find the value of one point.
  • For equal splitting: The system sums all job points, divides by total tips to find one point's value, then multiplies it by each jobs' points.
• By assigning points to specific recipient jobs, Tips Manager can weight distribution to certain employees. Points are variable and unrelated to percentages, ensuring consistent allocation based on employees or hours worked.
• Key difference between points and percentages: If no one clocked into one of the recipient jobs for a full workday/service period/order, that money is redistributed amongst the other recipients (when using points) rather than being returned to the individual check owner (when using percentages).
• You cannot assign more than 10 points to an individual job, but you can use decimals. So if you wanted to use 5 points for one job and 20 for another, you could instead use .5 points and 2 points, respectively.
• Points are not the same as percentages. For example, .2 points is not the same as 20% of the tip pool.

Points Tip Distribution Example

Here's a points-based example scenario to show how the policy works in Toast Tips Manager. This is hypothetical, but you can try it out with your jobs and policy to see if it’s the right fit for your team.

Hypothetical Scenario for Both Options Below

• The Server contributing job earns $300 in cash and non-cash tips.
  • Their contribution percentage is 10%, so $30 goes into the pool.
• Recipient job settings:
  • Bartenders receive 2 points
  • Hosts receive 1 point

Option 1: Points Weighted by Hours Worked (Proportionally by Hours Worked)

Clocked-In Staff: We take into account who was clocked in during the period (day/service/order).

• Bartender A: 4 hours
• Bartender B: 6 hours
• Host A: 4 hours

Point Weighting (based on hours): Since you've selected Proportionally by hours worked in your Advanced settings of the tip pool, we will then look at how many hours were worked and the number of employees clocked in to the job to calculate the total points in the pool for that period.

• Bartender A: 2 points × 4 hrs = 8
• Bartender B: 2 points × 6 hrs = 12
• Host: 1 point × 4 hrs = 4
• Total Points = 24

Payouts: To calculate the payout, we find the fraction of the points that each employee would earn from the total points, then multiply that by the tip amount available to distribute.

• Bartender A: 8 ÷ 24 × $30 = $10.00
• Bartender B: 12 ÷ 24 × $30 = $15.00
• Host: 4 ÷ 24 × $30 = $5.00

Option 2: Flat Per Person (Equally Regardless of Hours Worked)

Clocked-In Staff: We take into account who was clocked in during the period (day/service/order).

• Bartender A
• Bartender B
• Host

Flat Points (per person): Since you've selected Equally regardless of hours worked in your Advanced settings of the tip pool, we’ll just use the points assigned to the recipient jobs and add them up based on how many employees were clocked into that job.

• Bartender A: 2 points
• Bartender B: 2 points
• Host: 1 point
• Total Points = 5

Payouts: To calculate the payout, we find the fraction of the points that each employee would earn from the total points, then multiply that by the tip amount available to distribute.

• Bartender A: 2 ÷ 5 × $30 = $12.00
• Bartender B: 2 ÷ 5 × $30 = $12.00
• Host: 1 ÷ 5 × $30 = $6.00

Tip Pooling With Percentages

Percentages distribute a fixed percentage of the tips and gratuity sources to the recipient jobs. Put another way, Toast Tips Manager distributes the tips to the recipient jobs, then distributes what each recipient job received amongst the employees who clocked into that recipient job.

Some notes on percentage-based distributions:
 

• Percentages are not the default distribution selection and require you to select Advanced options on your Tip pooling policy page (Employees > Payroll management > Tip pooling policy) to activate them.
• Percentages are distributed to everyone clocked into a recipient job. Therefore, if you have a 10% distribution to a recipient job and two people are clocked into that job, they will divide that amount (either Proportionally by hours worked or Equally regardless of hours worked, depending on your policy configuration). It does not mean each person receives 10%.
• Key difference between points and percentages: If one of the recipient jobs isn't working that day, that amount will stay with the contributor job who earned the tips originally. Using the image above, if there were no Runners present on a certain day, the 35% share would be kept by the individual contributor (not pictured) instead of being split by the bartenders and bussers.
  • For this reason, using percentages with generic employee tip pooling cards can cause errors and undistributed tips.

Percentages Tip Distribution Example

Here's a percentages-based example scenario to show how the policy works in Toast Tips Manager. This is hypothetical, but you can try it out with your jobs and policy to see if it’s the right fit for your team.

Hypothetical Scenario for Both Options

• The Server contributing job earns $300 in cash and non-cash tips.
  • Their contribution percentage is 10%, so $30 is contributed to the pool
• Recipient job settings:
  • Bartenders receive 60% of the pool
  • Hosts receive 40%
• Clocked in staff:
  • Bartender A: 4 hours
  • Bartender B: 6 hours
  • Host: 4 hours

Option 1: Percentages Weighted by Hours Worked (Proportionally by Hours Worked)

Step 1: Split the pool.

• Bartenders get 60% of $30 = $18
• Host gets 40% of $30 = $12

Step 2: Allocate based on hours within each recipient job

• Total bartender hours = 4 + 6 = 10
  • Bartender A: 4 ÷ 10 × $18 = $7.20
  • Bartender B: 6 ÷ 10 × $18 = $10.80

Final Payouts:

• Bartender A: $7.20
• Bartender B: $10.80
• Host: $12.00

Option 2: Flat Per Person (Equally Regardless of Hours Worked)

Step 1: Split the pool.

• Bartenders get 60% of $30 = $18
• Host gets 40% = $12

Step 2: Flat split within each recipient job

• Bartenders (2 people): $18 ÷ 2 = $9.00 each

Final Payouts:

• Bartender A: $9.00
• Bartender B: $9.00
• Host: $12.00

When to Use Points or Percentages

Use the following table to determine when we recommend using points or percentages in your tip pooling policy.

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.