Can Restaurant Owners and Managers Keep Tips?

In a word: Nope.

Okay, it’s not actually that simple. But if you’re in doubt (and in a hurry), the safest answer is generally no, owners and managers can’t keep tips their employees received, or participate in a tip pool.

If you’ve got a minute: read on for the full story on why owners and managers (usually) can’t earn tips, when it’s actually legal, and a look at some rather extreme examples of wage theft in restaurants.

Wait: Are managers really taking tips from their employees?

You’ve probably heard of restaurant management teams that found themselves in legal hot water because owners or managers have taken a cut of their employees’ tips. These lawsuits can be financially devastating for hospitality brands.

Why does it happen? Unfortunately, sometimes managers knowingly steal tips from their employees. And yes, that’s very bad.

But often, greed isn’t the (only) culprit. Tipping regulations are notoriously complicated. Plus, they’re apt to change, and they can vary at the federal, state and even local levels. While you can’t plead ignorance in court, it’s certainly understandable if people are confused.

Here’s where it gets tricky: Restaurants move fast. The best managers pitch in when they see their team needs support. It’s not uncommon to see them showing a guest to their seat, delivering food to a table, helping out a busser.

If they’re jumping into front-of-house work on a regular basis, it’s only natural to assume they might deserve a share of tipped earnings as well. But generally speaking, it’s not theirs for the taking.

Why can’t owners and managers keep tips?

If owners and managers are directly contributing to a guest’s experience, shouldn’t they benefit from that guest’s show of thanks?

Not really.

The logic here is that owners and managers earn a salary. Tipped employees are hourly, and they generally rely on their tips to support their livelihoods — especially for employees who earn as little as $2.13 an hour. While it may feel unfair that managers can’t keep tips during shifts where they jumped in and saved the day, there were likely plenty of slow shifts where they still consistently make their salary. Servers, on the other hand, don’t have that level of predictability: when business slows down, so do tips.

Rationale aside, the bottom line is that it’s illegal for owners and managers to keep tips. Tips are seen as the property of employees only, so if owners are skimming their tips, they’re taking part in wage theft. The practice is often called “tip pocketing,” as servers (rightfully) view this as their employers grifting their hard-earned tips.

Owners and managers most commonly make this mistake through tip pools. When requiring employees to pool their tips, owners cannot legally redistribute any tips to managers, owners, or non-tipped employees who are earning the full federal minimum wage.

While you might think tip pooling will garner teamwork and collaboration, check out the strict laws around tip pooling and consult a lawyer before you get started.

Exceptions for managers

It wouldn’t be a rule if there weren’t an exception, right?

When it comes to keeping tips, managers have a little bit more leeway than owners do. Managers can keep tips earned through service they provide directly and solely.

So what does that mean?

The keywords here are “directly” and “solely.” If a manager took a table’s entire order, ran all of their food and drinks, and presented them with their check, then they are technically allowed to keep any tip the customers leave. This often occurs when “shift managers” (who are generally just head servers) oversee a shift while still relying on tips for their own income.

But again: if you’re a manager who just stepped in to help out a server who was in the weeds, the tip still belongs to the server.

What happens if a manager or owner keeps a tip?

For restaurant owners, the consequences of keeping employee tips could bring down your entire business.

Repayment: First of all, you’ll owe all of the stolen wages back to the employees, plus a fine of over $1,100 per violation. The repayment can be devastating — just ask these restaurant owners who owed over $157,000 in tips.
Damages: Restaurants can also be sued for damages, and some establishments simply can’t come back from such a devastating loss.
Poor customer experience: If customers are aware that management is keeping tips, they might not feel comfortable tipping at all.
Employee distrust and resentment: A restaurant’s culture will take a major hit if employees sense that they’re not receiving the tips they have earned.

One important thing to note: The consequences and fines for violating tip laws apply, whether you were aware it was illegal or not.

How do you ensure everyone is playing by the rules?

The short answer: cut the cash and go digital.

Tipping out in cash creates the perfect opportunity for skimming and wage theft, given the lack of visibility into cash flow and inability to track payments.

But even if your team is 100% trustworthy, tip distribution is far from foolproof. When your tipping system relies on cash, human error abounds, and managers can unknowingly create or participate in illegal tip pools.

A digital tipping platform allows you to put guardrails in place, so the only the right people (in the right roles) get tipped out. A software like Kickfin is built for flexibility, so if you have people who work multiple roles — or at multiple sites — you can ensure everyone is getting what they are legally entitled to.

Most importantly, a digital tipping system gives you the power to track everything. If an issue ever arises, you can easily pull payment history by individual, shift, or site.

Want to ensure your team is legally tipping out? Check out a free demo of Kickfin today to learn about our instant digital tipping software!

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Product and Company News, Technology and Software

Kickfin Integrates with RPOWER POS to Automate Tip Distribution for Restaurants, Bars and Nightlife

You heard that right — Kickfin has added yet another partner to our ever-growing list of POS integrations!

RPOWER POS has joined the list of leading POS systems that now integrate with Kickfin so users can fully automate tip calculations and payouts.

RPOWER is a trusted name in the restaurant industry known for its handheld devices, online ordering capabilities, and robust reporting. RPOWER’s dedication to staying on the cutting edge of restaurant tech makes the integration with Kickfin a perfect match!

With the RPOWER-Kickfin integration, restaurant operators can:

Easily build out highly complex tip policies
Calculate tip outs based on roles, shifts and hours worked
Distribute tips directly to employee bank accounts
Establish an electronic “paper trail” for every tip out

( …and more. Dive into the latest Kickfin updates for the full scoop.)

Like all of our integration customers, when RPOWER users activate the Kickfin integration, they’ll have access to our robust Customer Success team (at no extra cost!). We’re here 24/7 to review and build out your tip policy within the platform, so you’ll be up and running in a flash.

Collaboration with Riot Hospitality Group

This integration was especially exciting because we worked hand-in-hand with one of our longstanding customers, Riot Hospitality Group, to ensure the integration checked every box — and that it could handle their complex tip pooling policies.

“Kickfin has been an outstanding partner to Riot Hospitality Group for years,” said J Goldin, the systems director for RHG.

“They had already helped us go fully cashless, which eliminated a lot of risk for our teams. When we decided to completely automate tip payouts, they were a natural choice to help with that as well. We worked hand in hand with Kickfin and RPOWER to ensure the system could handle the intense complexity of our rules, while still being incredibly easy to use for our operators.”

“Kickfin is easy to implement and easy to use. If you’re thinking about trying it, you’ll be glad you did.”

As our co-CEO Justin Roberts puts it, this integration is a “no brainer for RPOWER users who understand how valuable their managers’ time is.”

RPOWER users, we’re ready for you! Schedule a demo to learn how you can activate your integration.

(Not an RPOWER user but want to take advantage of these time-saving features? See if Kickfin is integrated with your POS!)

Product and Company News

Kickfin Product Updates: New Year, New Features!

We kicked off 2025 with some major (!) updates to our Tip Calculator features.

It was a big release, and we’ll break it all down for you here — but the big headlines are:

More integrations
More speed
More flexibility

If you’re not already using Kickfin — or if you haven’t integrated Kickfin with your POS to automate tip calcs just yet — this is for you! Read on to see how you can use Kickfin’s newest tip calc features to un-clunk your tip pooling process.

More integrations, coming right up

We’re continuing to roll out integrations with the leading POS systems, giving restaurant teams the power to auto-calculate tip pools and shares in a matter of clicks.

(Side note: Kickfin only builds direct POS integrations — not using a third-party solution! — which streamlines your tech stack and keeps your costs lower.)

We were thrilled to add RPOWER to our growing list of integrations, which already includes Toast, Square, SkyTab, SpotOn, PAR and more.

If you’re an RPOWER user and you’re not yet a Kickfin customer, request a demo and we’ll show you the integration in action!

Handle autograts with ease

For servers and bartenders handling large parties, autograts can be great — but for managers, they can turn into a logistical nightmare. Now, Kickfin can help with that…

With this latest release, you can break tips and autograts into separate categories with their own set of rules for distribution. You have the flexibility to manage autograt tip splits completely separate from regular tip outs, so you can fairly reward a hardworking server-bartender-busser trio for a job well done on a 30-top.

Tips & Autograts Broken Out on Tip Data Page

Tips & Autograts Broken Out on Review Screen

With this new set up, you’ll also get more transparency in reporting. You’ll be able to see the breakdown of tips and autograts collected by each user in your reporting dashboards (more on that later!).

Include cash tips in your distributions

You heard that right — we can now distribute shares of cash tips digitally, directly to your employees’ bank accounts. Instead of doing the math on cash tips by hand, you can easily add cash to your tip pool, and we’ll calculate the share among employees for you.

Important note: cash distributions aren’t available for all of our integration partners. Contact us for more info.

Advanced Tip Rules (for even the unruliest policies)

Think your tip policy is extra tricky? Don’t worry — we’ve seen ‘em all. And there aren’t many Kickfin can’t handle, thanks to our Advanced Tip Rules feature.

If you have Advanced Tip Rules enabled, we’ve added a few new capabilities so you can further customize your tip share while we take care of the complicated math behind the scenes. Here are just a few examples of the new features we’re rolling out.

Not using Advanced Tip Rules? Reach out to us if you’d like to enable these features.

Per Segment Tip Sharing

We’ve been calculating tip shares on a check-by-check basis. For example, if you have servers sharing a percentage of tips with bussers, we would only calculate and deduct that percentage if a busser was working at the time that a check was processed. We call this Per Check Tip Sharing.

Now, we’re introducing Per Segment Tip Sharing, which gives you the option to deduct a tip share from every check processed during a shift. Let’s go back to our example — servers sharing a percent of tips with bussers. With Per Segment Tip Sharing, we would deduct a percentage of the server’s tip for every check processed, even if the busser gets cut two hours before the server.

Split Evenly

Would you prefer that all of your support staff take home an even share of their tip pool? We can now make that happen.

Previously, our tip shares entered a pool and were divided among beneficiaries based on how many minutes they worked during a shift, which we call splitting by Time Worked. With our new product update, we’re introducing the Split Evenly option, which enables you to send an equal part of a tip share to every beneficiary that worked within a segment.

More accuracy

In the past, cash autograt payments were lumped in with credit card autograts and credit card tips, resulting in credit card fee deductions on cash transactions. But that is no more!

Now we’re able to deduct credit card fees only where they apply, so you’ll no longer see credit card fee deductions attached to cash autograt transactions.

Plus, we’ve gotten even better at math. With our new update, we can prevent rounding errors, so our tip disbursal should match the tips collected in your POS to the penny.

Revamped and expanded reporting

We added new reporting views to give you more insight into each pay period, individual pay sets, and tip calculations. Here’s a quick look at your new pay period report with expanded filters:

Main Pay Period Report - Filter Bar Expanded

You’ll notice that there are now separate columns for tips and autograts, but you can still view the gross amount earned (tips + autograts = gross).

And it doesn’t stop at the main reporting page. You’ll see this more detailed reporting when you look at individual employee pay period reports, review a specific pay set, or export the information from any of your reporting dashboards.

We know this is a lot of new information to take in — but we’ve got you covered with our full Product Release Recap. Simply log in to Kickfin, click on your name in the upper left corner and select “Support” to access that portal.

Not using Kickfin? Dying to get rid of your old-fashioned gratuity management system? Drooling over these new features? We’d love to have you. Reach out to us today to see how our platform could save you time and money.

Hiring, Training and Retention, Restaurant Management

A Server’s Guide to Managing Large Parties & Securing Better Tips

Do you start getting heart palpitations when you see a large party reservation in your section? This one’s for you.

Maybe your restaurant is a local go-to for corporate dinners, milestone celebrations, and birthday parties…or maybe you regularly get blindsided with 20-top walk-ins when you least expect it.

As every hospitality pro knows, no matter how prepared you are, managing large parties can be tricky. But if you do it right, it can be a fast track to large tips.

So the next time a 20-top bachelorette party drops in and “forgot to make a reservation:” no need to hyperventilate! We’ve got the tips and tricks that can keep you sane throughout a large party — and hopefully help you reel in a well-deserved tip.

4 Tips for Staying Organized

When your 25+ top walks in, getting overwhelmed can lead you to drop the ball on service and hospitality because, hey — you’re just trying to get right right food, to the right person, as fast as possible. But your guests can pick up on when you’re frazzled or frustrated, which can impact their experience (as well as your tip).

Here are a few ways to stay organized and calm throughout service.

1. Get (a little more) familiar with your POS

Every POS system is different, but most have come quite a long way in terms of features and flexibility. There are likely bells and whistles on your POS that you might not use every day, but that can make managing large parties much more seamless.

So use all that tech to your advantage. Set aside time for some extra training or research to understand what your POS is capable of, so that it’s all muscle memory the next time you have a large group sitting in your section.

For example, here are just a few things you should know about your POS as it relates specifically to large parties:

Is there a max number of ways you can split a bill evenly?
How many checks can you create on each table?
How many ways can you split a single item?
Do you need manager permission to add auto-gratuity?

2. Assign seat numbers

The only way to stay sane when dealing with a large party is to assign seat numbers — and stick to them.

You should assign seat numbers starting with your first guest on the left and continue around the table moving counterclockwise. As you put in the first round of drink orders, your POS should allow you to assign items to a seat number. Even if guests move to different seats throughout the meal, stick to their original seat number.

Sure, it’s tedious — but these numbers will be your saving grace when someone asks you for another drink or when they want to split the check by family. No matter how in the weeds you are, take the time to add seat numbers. You’ll thank us later.

When they ask for 15 separate bills, you can just drop each seat number into a new check and print. No need to go back and ask, “who had the fish?”

3. Don’t trust your own memory

As a server, it’s normally a crowd-pleasing flex to take everyone’s order from memory. But when you’ve got 17 people depending on you to make grandma’s 97th birthday lunch a success: Pull out your server book.

Not only are you bound to forget something, but your guests may not feel entirely comfortable either. If they’re worried you’re going to forget they want their sauce on the side, they may be less inclined to ask questions about specials or which dishes are your favorites. And if guests feel like they have to stick to the basics, you’re missing out on all of your upselling opportunities.

Just for the night, don’t be a hero: write down everyone’s order!

4. Bring in some help

Depending on how many guests you have at one table, you might need more help than normal — and there’s no shame in that.

If you’re aware that a big party is on the books, coordinate with your team ahead of time. For example, see if you can have an assigned busser or bartender on call to help you keep drinks filled, tables clean, and guests happy.

Wowing Your Guests

To secure the huge tips that come with large parties, you’ll have to go above and beyond.

Be ready to make suggestions. Being knowledgeable about the menu always reflects well. Explain your specials in detail, offer drink pairings, and accommodate guests with special requests. This is your shot to upsell and increase the bill!

Keep the drinks flowing. No one wants an empty glass. Send bussers around with pitchers to top off waters, and always be ready to grab another round of cocktails.

Stay in contact with the kitchen. Give the chefs a heads up that you’re going to put in a large order so they can prepare accordingly. With more preparation, they’ll be able to get the whole table’s food out in a timely manner. No long waits for everyone to receive their food!

Pre-bus as much as possible. Keep the table neat and tidy, so they have rooms for multiple rounds of appetizers, drinks, and dessert.

Use your seat numbers. You shouldn’t have to serve entrees as if it’s an auction. Instead of announcing each dish to ask, “who had the burger?” you should be able to reference their seat number and pass each entree to the right guest. It’s a simple way to show your serving prowess (and speed up the serving process!).

Even with a crowd at your table, you can go above and beyond on service. Your guests will take notice and show their gratitude on the tip line (more on that later).

Splitting the Bill

You’ve made it through most of the craziness of a large party — but now it’s time to settle the bill. Before everyone closes out their tabs, you might have to navigate a few sticky situations.

Who’s paying?

It’s always awkward to stand next to the table while people fight over who’s taking care of the bill. Here’s what you can do to alleviate some tension:

If someone offers to pay early on in the meal, take them up on it. Go ahead and keep their card so you can run it before the arguments start.
When 3 different people want to pay for the meal, offer to split the bill evenly. They probably won’t take you up on it, but your suggestion should get one of the parties to acquiesce.
Ask how checks will be split at the beginning of the meal to avoid the awkward card dance at the end. You’ll also have an easier time splitting items if you know ahead of time!

To auto-grat or not to auto-grat

Do you want to make sure you get your full 20% tip after a big table runs you ragged? Or would you rather take the risk in hopes that you’ll get an even bigger tip?

If your restaurant has an auto-gratuity policy for large parties, some servers prefer to take the sure thing and hope that your guests feel inclined to give you an extra thanks on top of it. Most guests aren’t offended and even appreciate that they don’t have to do any math — but make sure that they’re expecting the service charge. A simple line like, “We have already included a 20% gratuity in accordance with our large party policy,” goes a long way.

When you have a really fun rapport with a table, it might be the right time to forgo the auto-grat and let your guests decide how much they’d like to thank you. Keep your guests in the know, too! Some may assume that you included gratuity and skip the tip line altogether.

Either way, steel yourself before you look at their final bill. You might be surprised when customers leave less than you expected, or you might be treated to a heavier-than-average tip.

Tipping out

After it’s all said and done, your manager may have a tip out policy for supporting bussers and bartenders who assist with large parties. Make sure you know what to expect to take home after tipping out your team.

And managers, Kickfin makes large party tip outs easy. Make sure that your event bartender gets their fair share of server tip outs, without spending hours with your calculator.

>>Learn more about Kickfin’s newest tip calculation features

Whether you’re hosting a graduation party or taking care of a corporate holiday dinner, be ready to handle it with the same care and attention you give to a two-top — and let the big tips roll in!

Product and Company News

Kickfin Ranked 65th Fastest Growing Company on the 2024 Deloitte Technology Fast 500

We’re thrilled to announce that Kickfin made the Deloitte Technology Fast 500™ list, a ranking of the 500 fastest-growing technology, media, telecommunications, life sciences, fintech, and energy tech companies in North America.

How Kickfin stacks up

Overall, 2024 Technology Fast 500 companies achieved revenue growth ranging from 201% to 153,625% over the three-year time frame, with an average growth rate of 1,981% and median growth rate of 460%.

Our 2,144% revenue growth earned us the 65th spot on Deloitte’s list. It’s another exciting milestone for Kickfin — but more importantly, it’s a meaningful validation of our mission to take the clunk out of tip management, so payouts are faster, smarter and safer for every restaurant team we serve.

Based on Deloitte’s ranking, Kickfin is:

The highest-ranked restaurant tech company on the list
The *only* tip management company on the list
Austin’s fastest-growing tech company

Growth driven by product innovation, demand for automation

Kickfin was the first digital end-to-end tip management solution on the market — and with more than $2 billion payouts to more than 250,000 restaurant employees, we continue to be the largest and top-ranked.

Why?

It comes down to working the way our customers work — and not the other way around. Not only do we automate the tip pooling and payout process for thousands of restaurants and bars; no two tip policies are alike, so we’ve built a solution that gives them the flexibility and customization they require.

With more than $2 billion payouts to more than 250,000 restaurant employees, Kickfin continues to be the largest and top-ranked tip management software on the market.

That’s a big reason we’ve focused on building direct, robust integrations with the leading POS systems on the market. So far, we’ve rolled out integrations with Toast, SkyTab, Oracle, PAR, Heartland and Square — and the list continues to grow.

“In recent years, digital tip management has become table stakes,” said Justin Roberts, Kickfin’s co-founder and co-CEO.

“Operators now understand the significant efficiencies to be gained by eliminating manual tip-out processes. It’s no longer a question of ‘if,’ but ‘how.’ As a direct result of our commitment to innovation and customer success, we’re thrilled to see more and more restaurants select Kickfin to modernize their tip management.”

A big thank-you to our customers who trust us with their payouts, to our partners who support, collaborate (and integrate!) with us, and of course, every member of the Kickfin team.

About the Deloitte 500

Now in its 30th year, the Deloitte Technology Fast 500 provides a ranking of the fastest-growing

technology, media, telecommunications, life sciences, fintech, and energy tech companies — both public and private — in North America. Technology Fast 500 award winners are selected based on percentage fiscal year revenue growth from 2020 to 2023.

In order to be eligible for Technology Fast 500 recognition, companies must own proprietary intellectual property or technology that is sold to customers in products that contribute to a majority of the company’s operating revenues. Companies must have base-year operating revenues of at least US$50,000, and current-year operating revenues of at least US$5 million.

Additionally, companies must be in business for a minimum of four years and be headquartered within North America.

Ready to take the next step?

See how brands like Walk-On’s, Marco’s, Bar Louie and more are automating tip pooling and payouts with Kickfin. Schedule your 10-minute demo today!