tipout

Tipout is the practice in hospitality and related service industries of distributing a portion of tips earned by some employees to others who contribute to the service but do not directly receive tips. In many restaurants and bars, servers may tip out bussers, bartenders, barbacks, food runners, or hosts. The goal is to recognize the work of staff who support service without handling customers or earning tips on their own.

Tipouts are typically calculated as a percentage of the tipping staff's tips or as a fixed amount per shift, and are governed by a written policy set by the employer. Practices vary by region and establishment; common bases include a percentage of tips from a server’s table or a fixed per-hour amount for specific roles.

Regulatory frameworks influence tipouts. In the United States, tip pooling is allowed for employees who customarily receive tips, with managers generally excluded; some states impose additional restrictions. Other countries have different rules about who can receive tipouts and how pooled tips are distributed.

Criticism centers on transparency and fairness, since tipouts reduce take-home pay for some workers and can be opaque. Proponents argue that tipouts promote fairness by compensating support staff and fostering teamwork. To minimize disputes, many venues document the policy, disclose the recipients and bases, and provide regular reporting of tipout calculations.

See also: tipping, tip pool, service charge.