Tip pooling policy template

Why write it down?

TIP POOLING POLICY TEMPLATE
[IMPORTANT: This template is provided for illustrative purposes only and does not constitute legal or tax advice. Tipping rules, taxation, and management participation are strictly regulated and vary significantly by jurisdiction. You must review this policy against your local labour laws, awards, collective agreements, and tax regulations before implementation.]

1. PURPOSE
This policy outlines the distribution of pooled tips among eligible staff members at [Venue Name]. Our tip pool recognises that excellent guest experiences are the result of teamwork across departments.

2. ELIGIBILITY
The tip pool includes the following roles:
[Example Roles - adjust to your venue and local laws:]
- Front of House: Servers, Bartenders, Hosts, Runners
- Back of House: Chefs, Cooks, Kitchen Porters

Exclusions: [Specify roles excluded by policy or local law, e.g., General Managers, owners].

3. DISTRIBUTION METHOD
Tips are distributed based on [Insert chosen method, e.g., a Points System / Hours Worked System].

[ILLUSTRATIVE EXAMPLE - Points System:]
Every role is assigned a point weight for the calculation:
- Bartenders / Servers: [e.g., 10 points]
- Kitchen Staff: [e.g., 8 points]
- Runners / Hosts: [e.g., 5 points]
- Kitchen Porters: [e.g., 4 points]

[ILLUSTRATIVE EXAMPLE - Hours Worked System:]
All eligible staff share the pool evenly based solely on the number of hours worked during the distribution period.

4. DISTRIBUTION SCHEDULE
Tips are calculated [Insert frequency, e.g., Weekly] coinciding with the payroll period. Tips are paid out [Insert method, e.g., via payroll].

5. TRANSPARENCY & INQUIRIES
A summary of the total pool and the distribution calculation is available for participating staff to review upon request. If you believe there is an error in your tip allocation, please raise it with management within [Insert timeframe, e.g., 48 hours] of distribution.

Agreed and understood:

___________________________  ___________________________
Employee Name                Date

Define who participates

List the roles, locations and working periods included in the pool, and explain how eligibility is affected by leave, training, management duties or work across departments.

Document the calculation

State whether tips are divided by worked hours, agreed points or equal shares. Define the source period, rounding method and treatment of corrections.

Review the policy locally

Employment, tax and tipping rules differ by location. Treat this framework as an operational starting point and have the final policy reviewed for the laws and agreements applying to your team.

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