Overview

This article describes how to configure and use the tip out and tip pooling features in Heartland Restaurant.

Tip Out

To configure a location to use tip outs, you must define one or more tip out type records in the Admin Console, then provide manager staff with the appropriate permissions to perform tip out transactions at the POS.

Tip Out Types

You can create or edit tip out types in the Tip Out Types screen. In the Admin Console’s Main Menu, click Location Setup, then click Tip Out Types. In the Tip Out Types screen, click New. The New Tip Out Type panel opens, with the following settings.

Name: In this box, enter a descriptive name for the tip out type you are creating.

Many locations prefer to name their tip out types to correspond with the job types of staff that receive the tips at the end of the night, rather than job types of staff that contribute the tips. For example, if you are creating a tip out type for servers to tip out a percentage of their liquor sales into a pool to be distributed to bartenders, you may prefer to name it “Bartender Tip Pool”.

Tip Pool: If you select this check box, the program will use this tip out type as a tip pool, where multiple servers use it to add tips to a single “pool” (like a physical tip jar) which is distributed to other staff later. You should select the Tip Pool check box if the location wants distributed tips to show as payroll tips.

Type: If you select the Tip Pool check box, the program will enable the Type list, which enables you to set how the POS collects tips for tip pools. If you select Suggested, the POS will prompt servers to manually enter a tip out, after completing the checkout process. The POS will also suggest an appropriate amount.

If you select Automatic, the POS will automatically transfer tip outs into a tip pool when each server checks out in the Checkout screen. While this function automates transferring tips from servers to a tip pool, it does not automate distributing tips from the pool to staff members. You must still distribute tips from the pool to staff members manually.

Job Types: IN this list, select the job types of the staff that you want to tip out to other staff or to a designated tip pool. The POS will include this tip out type on the Checkout Reports of all staff members who clock in and work under any of these job types you add to this list.

Percent: In this box, enter the percentage of tips that staff members should tip out.

Category: In this list, select the appropriate category from which the POS will calculate and deduct this tip out. If you select Total Tips, the POS will calculate the amount of the tip out as a percentage of the staff member’s total tips. If you select Gross Sales, the POS will calculate the amount of the tip out as a percentage of the staff member’s gross sales. If you select Net Sales, the POS will calculate the amount of the tip out as a percentage of the staff member’s net sales.

Report Category: If you chose Gross Sales or Net Sales in the Category list, the program displays the Report Categories list. If you select a report category, the POS will only calculate tip outs from the net sales or gross sales in the report category you select. If you do not select a report category, the POS will calculate tip outs from the total net sales or gross sales of all report categories.

Balancing: This setting allows you to set how the POS labels the funds it distributes from this tip out pool to individual staff members at the end of the day. If you select Cash, the POS will list the funds as Server - Cash or Tip Outs – Cash on its tip reports. If you select Payroll, the POS will list the funds as Server - Payroll or Tip Outs - Payroll on its tip reports.

Tip Out Permissions

To configure a location to use tip outs, you must set two permissions in the Permissions screen. In the Admin Console’s Main Menu, click Location Setup, then click Permissions.

In the Permissions screen, select an existing permission set. In the permission’s Setting panel, enable the following permissions.

Manage Tip Pools: If enabled, a staff member with this permission can distribute tips from a tip pool to individual staff members. This is typically enabled for managers who will distribute tip out funds at the end of day.

Manual Tip Outs: If enabled, a staff member with this permission can tip out a custom dollar amount manually to an individual, not simply the amount recommended by the POS.

No permission is needed for staff members from whom tip outs are automatically transferred by the POS into a tip pool.

By default, the POS will automatically calculate a tip out based on hours worked within a specific job type. Enabling this permission allows them to select a different value.

Location Settings

Finally, if the location calculates its tip outs as a percentage of gross or net sales, you may need to enable one setting in the Location Settings screen. In the Admin Console’s Main Menu, click Location Setup, then click Settings.

In the Location Settings screen, in the Cash Management Settings area, the Checkout Report Category Sales list enables you to set the POS to include gross sales or net sales on server checkout reports. If you select Gross, the POS will include gross sales on its checkout reports. If you select Net, the POS will include net sales on its checkout reports. 

If the location calculates its tip outs from net or gross sales from specific report categories and the merchant sometimes manually checks those calculations, you should ensure that the sales on the checkout reports match the tip out type’s category. For instance, if all of the location’s tip outs are set to calculate from gross sales, then you should select Gross in this list,

Using Tip Outs

There are three main ways to use tip outs in the POS, depending on how you set up the tip out type and how you want the POS to report tip outs.

Tip outs set as Automatic will be automatically added to a tip pool when staff members complete their checkout. Tip outs set as Suggested must be added manually to a tip pool or tipped out directly to other staff members after staff members complete their checkout.

Tipping Out from a Staff Member to Another Staff Member

If a location does not use tip pools and does not care about tip out distributions being recorded as Payroll tips, it staff members can tip out directly to other staff members.

1. In the POS Order screen, tap the Options button.
2. In the Options menu, tap Tip Out.
   The Tip Out From section displays My Tips by default and reflects the amount of tips available for tip out. Leave as is.
3. In the Tip Out To section, select Staff and choose the staff member you are sending the tip out to.
4. If necessary, select the Filter Job Type option and choose an appropriate job type.
5. Select the Amount option and enter the dollar amount you want to send to the other staff member.
6. If necessary, add a comment in the Comment box.
   The program will include these comments in the Tip Outs Report.
7. To complete the tip out, tap Tip Out.

This transaction will always appear as a negative Server - Cash tip amount on the sending staff member’s Checkout Report and a positive Server - Cash tip amount on the receiving staff member’s Checkout Report.

Tipping Out from a Staff Member to a Tip Pool

If the location uses tip pools set as Suggested, staff members assigned to tip out to the pool will see a suggested amount on their checkouts. After checking out, they must tip out to the tip pool manually.

1. In the POS Order screen, tap the Options button.
2. In the Options menu, tap Tip Out.
   The Tip Out From section displays My Tips by default and reflects the amount of tips available for tip out. Leave as is.
3. In the Tip Out To section, select Pool and choose the appropriate tip pool.
4. Select the Amount option and enter the dollar amount you want to send to the tip pool.
5. If necessary, add a comment in the Comment box.
   The program will include these comments in the Tip Outs Report.
6. To complete the tip out, tap Tip Out.

This transaction will always appear as a negative Server - Cash tip amount on the sending staff member’s Checkout Report.

Tipping from a Pool to Individual Staff Members

Regardless of how tip out types are set up, funds from tip pools must be distributed to staff members manually at the end of each night. We recommend you do this after all staff members have checked out and clocked out for the night (except the manager allocating the tips). If the tip out is set as automatic, this is the only manual step you must perform.

If a location does not distribute tips from the tip pool to staff members, the tips remain unallocated in the pool, which can cause confusing totals in reports.

1. In the POS Order screen, tap the Options button.
2. In the Options menu, tap Tip Out.
3. In the Tip Out From section, tap My Tips and select the desired tip pool.
4. In the Tip Out To section, select Filter Job Type and choose the job type of the receiving staff members.
5. Select Staff and choose an individual staff member.
   The POS will calculate the Amount automatically, based on the percent of hours worked by that staff member within that job type.
6. If necessary, you can edit the amount by tapping Amount and entering a new dollar amount.
7. To complete the tip out, tap Tip Out.

This transaction will always appear as a positive Server - Cash OR Server - Payroll on the receiving staff member’s Checkout Report based on the tip pool’s Balancing setting in the Tip Out Types screen.

Example of POS Automatic Amount Calculations:

There are $100 in tips in a pool available to be distributed to bartenders.

Two bartenders worked that night, Griff (4 hours) and Jenny (6 hours). That’s a total of 10 hours worked in the bartender job type.

When distributing from the pool to Griff, the POS will calculate an amount based on 40% of hours worked and suggest $40 be tipped to Griff.

When distributing from the pool to Jenny, the POS will calculate an amount based on 60% of hours worked and suggest $60 to be tipped to Jenny.

Tip Out Usage Scenarios

Below are some scenarios where and how tips outs are used. Setup may vary depending on your needs. All of these scenarios use an Automatic distribution type. If Suggested is used, then the process will require manual steps at distribution and when tipping out to a pool or staff member initially.

Servers Tip Out to Bartenders Based on their Liquor Sales

Description: This tip out is calculated as a percentage of the liquor sales. For instance, where 2% of liquor sales are tipped to a bartender.  

End-of-Day Tip Out Procedure

Based on the setup above, servers perform their server checkouts and the POS automatically deposits 2% of their liquor sales into the Bartender tip pool when checkout is completed.

A manager with tip out permissions will then follow the procedures for transferring funds from the tip pool to individual staff members (including the bartender).

All Servers Tip into a Pool and Receive Paid Outs Evenly Based on Hours Worked

Description: Servers pool 100% of their tips. A total of 60 hours were worked in one shift among all staff members. If a server works 6 hours in that shift, they get 10% of the tips.

End-of-Day Tip Out Procedure

Based on the setup above, servers perform their server checkouts, and the POS automatically deposits 100% of their total tips into the Server tip pool when checkout is completed.

A manager with tip out permissions will then follow the procedures for transferring funds from the tip pool to individual staff members.

All Servers Tip into the Pool and Receive Paid Outs Based on their Sales

Description: If a server makes 65% of the total sales for the night, that server receives 65% of the tip pool.

End-of-Day Tip Out Procedure

Based on the setup above, servers perform their checkouts and the POS automatically deposits all of their tips into the appropriate pools at desired percentages.

A manager with tip out permissions will then follow the procedures for transferring funds from the tip pool to individual staff members.

By default, the POS sets the amount based on hours worked, so a manager may need to perform some manual calculations to base amount off of total sales across multiple employees.

Tip Out Reporting

Tip outs are reflected in three primary Admin Console reports. They also appear in other reports, but at a total level only.

Tip Outs Report: Lists all tip out and tip distribution transactions that occurred.

Tips & Payouts Report: Lists details of tips owed to staff members. On this report, tip outs are listed under their own unique columns of Tip Outs - Cash or Tip Outs - Payroll. This report is the easiest to use when reviewing merchant questions about tip outs.

Payroll Summary Report: This report has a “Tips & Sales” detail filter that allows tip reporting. This tip out based report lists other tips under Server - Cash and Server - Payroll, instead of being split into its own column.

Checkout Reports: Checkout reports for automatic tip outs will display the tip out amount reduced from the staff members’ tips. These tips are typically moved to a pile, jar, lockbox, or other physical container separated from the server or the merchant. Suggested tip outs do not impact checkout report figures; it just displays a suggested total that the server should tip out.

What is the difference between staff-to-staff tip outs and pool-based tip outs?

Staff-to-Staff: If one staff member sends a tip directly to another staff member, it will list a negative Server - Cash or Tip Outs - Cash on the sending staff member and a positive Server - Cash or Tip Outs - Cash on the receiving staff member in reports. Staff-to-staff tip outs are always listed as cash transfers. There is no setting to have them listed as payroll tips.

Pool-based: Any contributions from a staff member to a tip pool results in a negative Server - Cash or Tip Outs - Cash amount on tip reports for the sending staff member. Distributions from a pool to a staff member can appear as a positive amount under Server Cash or Tip Outs - Cash or a positive amount under Server - Payroll or Tip Outs - Payroll, depending on the Balancing setting of the tip pool from which funds are being distributed. If a location wishes to record payroll tips from tip outs, they must set up a tip pool to facilitate this.

Server Checkout Tip Out Reporting

Suggested: These tip out types only display a suggested amount to tip out and do not directly influence any owed amounts.

Automatic: Automatic tip outs assume the tip out is performed once the server checks out, so it does impact owed figures on the checkout report.

Discouraged Setups and Uses

Some setups or uses of the built-in tip pooling feature do not work well and can lead to confusion in reporting and calculations. If a location performs one or more of the following scenarios on a daily basis, they may need a third- party tip management service.

Staff members clocking in to more than one job type in one day: If staff members are clocking into multiple job types per day, we do not recommend they use the built-in tip out features.

• Automatic tip out calculations will reflect once per checkout based on only ONE of the worked job types. So if a staff member does not perform a checkout before clocking out and then clocking into a second job type, the POS will record both job shifts under the same checkout, which can cause problems.

Staff members who work split shifts: We do not recommend the use of the built-in tip feature for locations where multiple staff routinely work split shifts.

• Our tip out feature is only meant to be used with staff members who work one continuous shift. Staff members can take scheduled breaks and clock back in from break to keep it as a single shift. But if they clock in and out multiple times a day, it will lead to problems with automatic tip calculations, tip suggestions, and automatic calculations when distributing tips at the end of the night. This can add a lot of manual work for managers.

Merchant distributing one tip pool's funds to multiple job types: If a merchant plans to distribute tip pools from a single pool to staff members from multiple job types, the POS automatic calculation feature will be unable to suggest proper tip amounts.

• If a site wants the POS to automatically calculate the distributed tip amount for them properly, each tip pool needs to be distributed to one job type.
• A tip pool can receive contributions from multiple job types. The POS calculation logic only supports distributing to one particular job type.
• Example: a tip out named 'Server to Bussers & Runners' where the configured job type to contribute to the pool is the server and the funds are planned to be distributed from this single tip out to busser AND runner job types will not work properly.
• Instead they should have two tip outs 'Server to Bussers' and 'Server to Runners'. At the end of the night funds would be distributed to bussers from one tip pool and distributed to runners from a separate tip pool.
• If a site is not concerned with the automatic calculation feature and is fine with calculating the amounts themselves, they can set up a tip out in this way:
• When they go to distribute tips out at the end of the night, they simply need to select a staff member, not a job type, then manually select an amount to give out.
• Example: If $100 was collected into a tip pool, and it will be redistributed to four staff members clocked in on different job types, you will have to determine the amount that goes to each staff member manually by using your own calculations. If you want it even across all staff members, you would manually distribute $25 to each person, or the merchant can use whatever other manual calculations and select their desired amount.

FAQ

When tipping out to a staff member, what is the Suggested share of tips shown on the Tip Outs page calculated from?

The amount shown here is calculated as:

• Suggested Share of tips: % of hours worked x Total Tips for Job type = Suggested Share of tips.
• % of hours worked: Selected staff’s duration worked in current shift / Total duration of all staff who were active with the given job type today = % of hours worked.

Example of how the POS automatic calculation works:

• There are $100 in tips in a pool available for distribution to bartenders.
• Two bartenders worked that night, Griff (4 hours) and Jenny (6 hours), for a total of 10 hours worked in the bartender job type.
• When distributing from the pool to Griff, the POS will suggest based on 40% of hours worked and suggest $40 be tipped to Griff.
• When distributing from the pool to Jenny, the POS will suggest based on 60% of hours worked and suggest $60 to be tipped to Jenny.

What if a site needs more tip out\tip pooling features then our built-in option offers?

You can refer them to tip managing third-party integrations such as GraTrack, Tips Sender, or TipHaus. Current supported integrations on the integration matrix HERE.