What's covered in this guide?
What is a tip pool?
A tip pool collects the tips a location takes in over a day, a week, or a pay period, splits the total between the teams you choose, and then divides each team's share between the employees who worked, in proportion to their hours. The result lands on each employee's timesheet as a tip line and flows into the pay run with the rest of their earnings.
Tip Pools replaces Tip Jars. Compared to a tip jar, a tip pool can:
Pool by day, week, or pay period rather than day only.
Give teams a fixed percentage, a points weighting, or a share of the remainder, instead of a single split.
Track cash tips, credit card tips, and service charges separately, each with its own line on the pay stub.
Limit a pool to a shift group, so a lunch pool and a dinner pool can run side by side.
Cover one location or your whole company.
Apply federal and state tip rules automatically, including excluding managers and blocking credit card fee deductions where a state forbids them.
Keep a record of every calculation, so you can see exactly how a period was split and what changed when it was recalculated.
You'll find Tip Pools under Compliance > Customize Your Setup > Tip Pools > Manage, or from the Tip Pools item in the Compliance side navigation. Admins and Payroll Officers have access by default. To give another role access, add the Tip Policies permission to that role.
Don't see Tip Pools? Tip Pools is switched on automatically for accounts that have never used Tip Jars. If your account has existing Tip Jars and you'd like to move across, reach out to the support team and we'll enable it for you. See Moving from Tip Jars for what to expect.
How tips are split
Each tip type (cash, credit card, service charge) is pooled and split on its own. Within a tip type, the split happens in two steps.
Step 1: Between teams. Every team in the pool has a share basis:
Percentage — the team takes a fixed percentage of the pool. Percentages across all teams can't add up to more than 100%.
Points — after any percentage teams have taken their cut, points teams split what's left in proportion to their points. A team with 2 points gets twice as much as a team with 1 point.
Remainder — after any percentage teams have taken their cut, remainder teams split what's left in proportion to the total hours each team worked in the period.
A pool can't use both points and remainder teams at the same time. Percentage teams can be combined with either.
A team only takes part in a period if someone on that team actually worked. If a team has no hours in the period, it drops out and the whole pool is shared between the teams that did work.
Step 2: Between employees. Each team's share is divided between the employees who worked on that team during the period, in proportion to the hours on each shift. An 8-hour shift receives twice as much as a 4-hour shift.
Example
A restaurant pools $1,000 in credit card tips on a Friday. The pool has three teams: Bar on a 30% share, and Servers and Bussers both on Remainder. Servers worked 40 hours that day and Bussers worked 10.
Bar takes 30%: $300.
The remaining $700 is split between Servers and Bussers by hours worked, 40 to 10. Servers receive $560 and Bussers receive $140.
Within Servers, an employee who worked 8 of the 40 hours receives 8/40 of $560, or $112.
Amounts are rounded to the cent and the cents are balanced so that the shares always add up to the pool total.
Before you start
A tip pool works from the teams and shifts you already have in Workforce, so a few things need to be in place first.
Teams. Tips are shared between teams, and an employee earns from a pool through the team their shift is tagged to. Make sure each location has a team for every group that should receive tips (for example Bar, Servers, Bussers) and that shifts are being tagged to them.
Tipped Occupation Codes. For tips to be reported as qualified under the No Tax on Tips deduction, each tipped team needs a Tipped Occupation Code. See One Big Beautiful Bill Act: Tip and Overtime Reporting.
Tip-based departments. If you pay a reduced cash wage and rely on a tip credit, mark the relevant teams as tip-based so pooled tips count toward the Minimum Wage Top-Up calculation.
Shift groups (optional). To run separate pools for different dayparts, set up your shift groups first under Schedules > Shift Groups. A pool limited to a shift group only includes shifts that start within that group's hours.
A pay group (only for pay period pools). A pool that runs per pay period is tied to one pay group, and every member of every team in the pool must be on it.
You don't need to set up earnings rates or allowances. Tip Pools creates the ones it needs when you save a pool. See How pooled tips are paid.
Managers are excluded automatically. Under the FLSA, managers and supervisors may not take a share of a tip pool. Workforce treats anyone who is listed as a manager of a team as a manager for the whole period, even on shifts where they worked the floor, and skips their shifts. You'll see these as Ineligible manager in the distribution. An owner or manager who isn't listed as a manager of any team is not excluded, so check your team manager assignments before you go live.
Creating a tip pool
Go to Compliance > Customize Your Setup > Tip Pools > Manage and click New tip policy.
Basics
Name — Shown on the Tip Pools page and used to label the tip lines on timesheets, so pick something staff will recognize, like "Dinner Pool" or "Bar Tips".
Location — The location whose tips and teams this pool covers. Leave it as Organisation-wide to pool across your whole company. A location-based pool can only include teams at that location, and its teams must all be in one state.
Period type — How often the pool is closed off and split:
Daily — each day's tips are split between that day's shifts.
Weekly — each week's tips are split between the week's shifts. Weeks follow your account's week start day.
Pay period — tips are split across the whole pay period of the selected Pay group.
Daily is the closest match to how Tip Jars worked. Weekly and pay period pools even out busy and quiet days across the team.
Shift group
Leave this as All shifts to include every shift in the period. Choose a shift group to limit the pool to shifts whose start time falls inside that group. This is how you run a lunch pool and a dinner pool at the same location: create two pools with the same teams, one on each shift group.
💡 Tip: A shift that starts outside the shift group is left out of the pool without any notice in the distribution. If an employee is missing from a shift-group pool, check their shift start time first. An employee working a double who should share in both a lunch pool and a dinner pool needs two shifts, one starting in each group.
Tip types accepted
Check Accept cash tips, Accept credit card tips, or both. At least one is required. Each type you accept becomes its own line on timesheets and pay stubs, and the pool only accepts receipts of those types.
US details
Credit card fee percent — Shown when credit card tips are accepted. When a customer tips on a card, the processor charges a fee on the whole transaction, tip included, and federal law lets you pass the tip's share of that fee through to employees. Enter the percentage to deduct from credit card tip receipts before they're pooled, for example 3 to deduct 3%. Leave it at 0 to absorb the fee yourself.
Some states don't allow this deduction. For a pool at a California location, the fee must be 0 and Workforce won't let you save anything else.
Pool service charges — Check this to distribute mandatory service charges, such as an automatic gratuity on large parties, through the pool alongside tips. Service charges are wages rather than tips: they're paid on their own Pooled Service Charges line, they count toward the employee's regular rate of pay for overtime, and they aren't reported as tips on the W-2. See Weighted Average Overtime for how the regular rate is calculated.
Teams
Click Add team for each team that should receive a share. For each row choose the Team, the Share basis (Percentage, Points, or Remainder) and, for Percentage and Points, the Value. See How tips are split for how the bases combine.
Workforce won't save a pool where percentages add up to more than 100%, where points and remainder teams are mixed, where a team appears twice, or where a team belongs to a different location than the pool.
Employee split
Strategy — How each team's share is divided between the employees who worked. Hours proportional is the strategy available today: each shift receives a share of the team's amount in proportion to its hours.
Click Create policy. The pool appears on the Tip Pools page and is ready to receive tips.
To change a pool later, open it and click Edit. Changes apply the next time a period is calculated. Delete on the edit page archives the pool; tips already distributed stay on timesheets.
Getting tips into the pool
Tips enter a pool as receipts. Each receipt is a date, a tip type, and an amount. There are two ways receipts get created.
From your POS
If a point of sale integration is sending tips to Workforce for the pool's location, each day's tip total is added to the pool automatically as a receipt, and updated whenever the POS sends a corrected figure. Nothing needs to be entered by hand. See GoTab POS Integration for an example of an integration that sends tips, and Configure your Sales, Revenue, Budgets & Demand Data for how data streams attach to locations.
POS tips are recorded as cash tips. POS integrations send a single daily tip total with no breakdown between cash and card, so Workforce records the total as a Cash tip receipt. That means the pool must accept cash tips, the credit card fee percent is not applied to POS totals, and the amounts are paid on the Cash Tips line, which is treated as already received by the employee (see How pooled tips are paid). If your card tips need to be paid out through payroll, add them as manual Credit card tip receipts instead.
Manually
Open the pool and scroll to Add manual receipt. Enter the Date, choose the Tip type (only the types the pool accepts are offered), enter the Amount, and click Add receipt. Add one receipt per type per day, or several if it's easier to record them as they come in; the pool adds them together.
Manual receipts can be deleted from the Recent receipts card. Receipts that came from a POS can't be deleted here; correct the figure at the POS and it will update on the next sync.
When the pool recalculates
The pool recalculates the affected period in the background whenever a receipt is added, changed, or removed, and whenever a shift in the period is added, edited, moved to another team, or deleted. There's nothing to trigger after approving timesheets.
If you want to force a recalculation, for example after changing the pool's teams, click Recompute now on the pool page. This recalculates every date that has a receipt in the last 30 days, plus today.
Reviewing distributions
Open a pool from the Tip Pools page to see its Recent receipts and Recent distributions. A distribution is one calculation for one period. Each one shows:
The period it covers and a status: Paid, Partially paid, Unpaid, Nothing paid, or No shifts.
The Pool total, how much was Paid onto timesheets, how much is Unpaid (if any), and how many staff shared in it.
A row per employee with their Hours, Share of the pool, Amount, and whether that amount has been paid onto their timesheet.
A count of skipped shifts and the reason for each.
Shifts can be skipped for these reasons:
Ineligible manager — the employee is listed as a manager of a team, so they can't share in the pool for this period.
Leave shift — the shift is time off, not worked time.
Shift missing times or Zero length shift — the shift has no start or finish time yet, or its hours come to zero. Fix the shift and the pool will recalculate.
Pay run closed, correction deferred — the shift is already on an exported timesheet. Its share is recorded but held rather than added to a finalized pay run. See the FAQ for how to handle this.
Archived allowance — the tip line this share would be paid on has been archived. Restore it under Compliance > Allowances.
When a period is recalculated, the previous result moves into Earlier engine runs at the bottom of the card. These are kept for audit so you can see what each period looked like before a receipt or shift changed.
How pooled tips are paid
When you save a pool, Workforce creates an allowance and a matching earnings rate for each tip type the pool accepts. The allowance is what appears on the timesheet, and the earnings rate is the line on the pay stub:
Cash Tips — earnings type Tips. Cash tips have already been handed to the employee, so this line is included in gross pay and taxed, but the amount is not paid out again on the pay run.
CC Tips — earnings type Tips. Paid to the employee through the pay run with the rest of their wages.
Pooled Service Charges — earnings type Regular. Paid through the pay run and included in the regular rate of pay for overtime.
On the timesheet, each employee's share appears as an allowance line named after the pool and the tip type, for example Tip Pool: Downtown Dinner Pool — CC Tips. These lines flow into the pay run when you export timesheets, exactly like any other allowance. See Run Payroll for the export and pay run steps, and Preview and Send Pay Stubs for where the lines appear on the pay stub.
A few things to know about how the tip lines interact with the rest of payroll:
Minimum wage top-up. Cash Tips and CC Tips count as tips received when Workforce checks whether a tipped employee reached minimum wage for the week. Pooled Service Charges do not, because they're wages. See Minimum Wage Top-Up.
Tax on cash tips. Because cash tips have already been paid out, the tax owed on them is withheld from the employee's other wages. If those wages aren't enough to cover it, the shortfall carries over to the next pay run. See Tax Carryover.
W-2 reporting. Cash Tips and CC Tips are reported as tips on the W-2. Whether they qualify for the No Tax on Tips deduction depends on the Tipped Occupation Code on the team the shift was tagged to. See One Big Beautiful Bill Act: Tip and Overtime Reporting.
Earnings rates. The Cash Tips, CC Tips, and Pooled Service Charges earnings rates are listed under Payroll > Payroll Settings > Earnings Rates like any other rate, so you can set their payroll account for your journal. See Earnings Rates.
Moving from Tip Jars
Tip Pools and Tip Jars can exist on the same account while you move across, but a location only ever pays tips through one of them at a time.
As soon as a pool covers a location, that location's tip jars become read-only. Amounts can't be entered or edited, and new tip jars can't be created, but all historic jar data stays visible under Compliance > Customize Your Setup > Tip Jars. A company-wide pool covers every location.
POS tips for a covered location are sent to the pool instead of the jar from the next sync. Days that were already paid out through the jar are left alone, so past periods aren't paid twice.
Nothing is migrated. Tips already distributed by a jar stay as jar allowances on those timesheets, and the pool takes over from the day it's created.
The Tip Jars menu item stays while your account has any tip jars, including archived ones, so historic data remains reachable. Accounts that never had a tip jar don't see it at all.
💡 Tip: Create the pool before trading starts for the day, ideally on the first day of a pay period. The pool takes over the whole of the day it's created, so if the jar already holds part of that day's tips, both features will pay for that day. Setting up before the first tip comes in avoids the overlap.
If you were using a jar's tip allowance to map tips into payroll, you no longer need to. The pool's own Cash Tips and CC Tips lines are already set up as tip earnings.
Frequently Asked Questions
An employee didn't receive a share. Why?
Work through these in order:
Is their shift tagged to one of the pool's teams? Shifts on other teams aren't included.
If the pool uses a shift group, did the shift start within that group's hours? Shifts starting outside it are left out silently.
Are they listed as a manager of any team? If so they're skipped as Ineligible manager for the whole period.
Check the skipped reasons on the distribution for a missing start or finish time, a zero-length shift, or a leave shift.
For a pay period pool, are they on the pool's pay group?
A distribution shows an Unpaid amount. What do I do?
An amount is held when the shift it belongs to is already on an exported timesheet, for example because a receipt was added or corrected after the pay run was created. Workforce records the employee's share but doesn't change a finalized pay run. Pay the held amount on the next pay run following the steps in Backpay and Correcting Other Missed Payments. Recalculating a period doesn't change tip amounts already paid on a closed pay run.
Can a location have more than one pool?
Yes. The usual reasons are separate dayparts (a lunch pool and a dinner pool on different shift groups) or separate groups of teams (a front of house pool and a bar pool). A team can be in more than one pool, so make sure the pools don't overlap on the same shifts unless that's what you intend, or those shifts will receive a share from each.
What happens when I change a pool's teams or shares?
The new settings apply the next time a period is calculated. Periods that have already been distributed keep their result until something in them changes or you click Recompute now, which recalculates the last 30 days of receipts. Amounts already on a closed pay run are never changed.
What does the employee see?
Their share appears as a tip line on their timesheet for each shift, and as a Cash Tips, CC Tips, or Pooled Service Charges line on their pay stub. Employees don't see the pool itself, the receipts, or other employees' shares.