Tipbundeling

Tipbundeling is a practice in which tips collected from customers are aggregated into a single pool or bundle and then distributed among eligible workers according to predefined rules. The term is used primarily in hospitality, food service, and gig platforms, where multiple employees contribute to a single service encounter.

Tipbundling can occur through point-of-sale systems that automatically add tips to a pool, or through manual pooling where staff contribute a portion of their tips into a shared fund. Distributions may be equal among eligible employees, or weighted by role (e.g., servers, bartenders, bussers) or hours worked. Some organizations implement tipbundling only during shifts, others over a week.

Bundling aims to reward teamwork, stabilize earnings, and simplify budgeting for employers. Critics argue it can dampen individual incentive and misallocate earnings, especially when non-tip-earning roles or lower-wage workers are included. In practice, rules vary widely by region and employer policy, and many jurisdictions limit which workers can participate in tip pools.

In the United States, federal guidelines allow tip pooling among employees who regularly receive tips and who contribute to the service; managers may not participate, and tips may not be used to satisfy minimum wage requirements except as allowed by law. Legislation elsewhere ranges from permissive to restricted; compliance is typically handled by payroll or human resources departments.

See also: tip pooling, gratuity, tipping.