Trends in Gratuity Distribution
Below are some highlights from an article that we authored for Bottomline, the leading trade magazine for hospitality financial and technology professionals. To read the complete article please click here.
Gratuities splits/distributions are handled in a variety of ways across the industry. Complexity of the gratuity distribution increases as tips are pooled or split differently for different events.
Even Split for Event
In this method, the service charge is split between the house and the different employee types that work an event (servers, coffee crew, captain, bartenders). Each employee type group then receives an even split for their group.
Even Split for Event (Pooled)
Similar to the above, this method requires that event gratuities are pooled together based on a variety of factors such as:
- Event Type
- Time of Day
- Date
- Week
- Employee Type
Once the total gratuities are pooled, the employees then receive an even distribution of the entire split for their pool.
Gratuities by Hour
In many cases, the hours worked determine the "cut" an employee will receive compared to his/her peers. The gratuities amount to be split is divided by total hours worked for all employees in the split and then multiplied by each individual's hours.
Gratuities by Hour (Pooled)
As a variation of some of the above methods, this case requires the gratuities to be pooled first. This total pool is then prorated for each employee via the same calculation in the "Gratuities by Hour" method.