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Tip-out percentages: how much servers tip out bussers, bartenders and hosts

Updated October 29, 2026 · 6 min read

Short answer: There is no legal standard tip-out percentage; each restaurant sets its own policy. Industry guides put servers' total tip-out at roughly 20% to 40% of their tips. By role, published ranges are about 1% to 2% of sales (or 10% to 30% of tips) to bussers, 5% to 10% of alcohol sales (or 10% to 20% of tips) to bartenders, 1% to 3% of food sales (or 5% to 10% of tips) to food runners, and 0.5% to 1% of sales (or 3% to 5% of tips) to hosts where hosts are tipped out at all.

What a tip-out is

A tip-out is the share of a server's or bartender's tips paid to the support staff who helped serve the table: bussers, food runners, bartenders, barbacks, hosts and sometimes expo. It differs from a tip pool, where all tips go into one pot and are split by a formula (hours, points or role). Many restaurants use a mix: servers tip out from their own tips, bartenders pool among themselves.

Tip-outs are usually calculated one of three ways (Homebase, Toast):

1. Percentage of sales. Example: 3% of your total sales to the bussers, whether or not the tables tipped well.
2. Percentage of tips. Example: 20% of the tips you actually received, split among support roles.
3. Points. Each role gets points (say server 10, busser 7, host 5); the pool is divided by total points.

The difference matters on a bad night. A sales-based tip-out is owed even when a table stiffs you; a tips-based tip-out scales down with your tips.

Typical ranges by role

These are published industry guidelines, not laws, and they vary by city, concept and volume. Homebase says restaurants with a cocktail-heavy bar program should expect bartender tip-outs at the higher end.

One real-world data point: a server at Pod, a Philadelphia restaurant, is quoted by Restaurant Business as tipping out "8% to the bar, 10% to the busser and 12% to the runner"; the article does not say whether that is a share of tips or of sales, and calls the figures fairly generous compared to other restaurants (Restaurant Business).

Note that "percentage of sales" and "percentage of tips" are not interchangeable. At a 20% average tip, 2% of sales equals 10% of tips. If your restaurant quotes one, convert it to the other before comparing with another job.

Worked example

Say you worked a six-hour shift with $3,000 in sales ($900 of it alcohol), $540 in card tips and $60 in cash tips. Your tip-out policy: 2% of total sales to bussers, 5% of alcohol sales to the bar, 1% of food sales to the runner.

• Bussers: 2% x $3,000 = $60
• Bar: 5% x $900 = $45
• Runner: 1% x $2,100 = $21
• Total tip-out: $126 (21% of your $600 in tips)
• Tips kept: $600 - $126 = $474
• Real hourly at a $2.13 cash wage: ($2.13 x 6 + $474) / 6 = $81.13

Change the tables to a slow night with $1,500 in sales (same food and alcohol mix) and $240 in tips: the sales-based tip-out is $63, which is 26% of your tips. Sales-based tip-outs hurt more on slow nights. This is why tracking tip-outs per shift, not just tips, tells you what a job really pays. See how to track your tips.

The federal rules that do apply

The percentages are policy, but who can receive tip-outs is law. Under the Fair Labor Standards Act, as summarized in DOL Fact Sheet 15:

• Tips belong to employees. An employer may not keep any part of employees' tips, including through a tip pool.
• Managers and supervisors may not receive tips from a pool or tip-out. They may keep only tips they receive directly for service they alone provided.
• If the employer takes a tip credit (pays a cash wage below the full minimum wage, down to $2.13 federally), a mandatory tip pool may include only employees who customarily and regularly receive tips, such as waiters, bussers, counter staff who serve customers and service bartenders. Back-of-house staff such as cooks and dishwashers cannot be in it.
• If the employer does not take a tip credit and pays everyone at least the full minimum wage in cash, a mandatory pool may also include cooks and dishwashers.
• A tipped employee is one who customarily and regularly receives more than $30 a month in tips.

States can be stricter. Seven states (Alaska, California, Minnesota, Montana, Nevada, Oregon, Washington) require the full state minimum wage before tips, with no tip credit at all (DOL state table, July 1, 2026). Check your state labor department for tip-pooling rules.

Tip-outs and your taxes

For tax purposes you report the tips you keep, not the tips you pass on. IRS Publication 531 says a daily tip record should include the amounts paid out to other employees through tip pools or tip splitting and the names of those employees, and that you should not report to your employer the portion of tips you pass on. The person receiving the tip-out reports it as their own tip income. For the 2025 to 2028 qualified tips deduction, tips received through tip sharing count for the recipient (IRS Tax Tip 2026-06); see our guide on tip records and the no-tax-on-tips deduction.

If you use an app or spreadsheet, record tip-outs as their own line with the role or name, every shift. Goodhands Tip Tracker, a free Android app, lets you set a tip-out rule once (for example "3% of sales to bussers") and applies it to each shift you type in, so the record of who got what is kept automatically.

FAQ

Is there a legal maximum tip-out percentage?

No federal law sets a maximum. Federal law limits who may receive tip-outs (no managers, no employer, back-of-house only when no tip credit is taken) (DOL Fact Sheet 15). Some states have their own rules.

Do I have to tip out on sales even if the table did not tip?

If your restaurant's policy is a percentage of sales, yes, that is how the policy works, and it is a common structure (Toast). The legal limits are on who receives the money, not on the formula.

Can my manager take a share for "helping on the floor"?

Under the FLSA, managers and supervisors may not receive tips from a pool or tip-out even if they occasionally serve; they may keep only tips customers give them directly for service they alone provided (DOL Fact Sheet 15).

Should I report tips before or after tip-out?

After. The IRS says to report to your employer only the tips you keep, and to record the tip-outs and recipients in your daily record (Publication 531).

Ranges above are industry guidance quoted from the linked sources, not legal standards. This page is not legal or tax advice. Last checked: 2026-10-29.

Guides describe public information and are not tax advice. Goodhands is not affiliated with the IRS.