Cashless Tipping: (Literally) Everything You Need To Know

The demand for cashless tipping has reached an all-time high. And for good reason: When was the last time you paid for something in cash?

Or perhaps a better question: When was the last time a valet assistant pulled your car around, and you experienced that all-too-familiar moment of panic when you realized you had zero cash for a tip?

According to the Federal Reserve’s 2021 report, cash accounted for only 19 percent of all transactions in 2020, down seven percentage points from 2019 — and we expect that decline to continue. By and large, consumers now pay for purchases with their debit cards, credit cards or using digital options like ApplePay or PayPal.

To further complicate the cash tip conundrum: When people do carry cash, they often are not carrying small bills used for tips, since most bank ATMs generate $20 bills as a minimum.

There are certainly perks to this cashless trend. And for many restaurant workers, it’s a non-issue because guests can easily leave credit card or digital tips when they pay their bill. But for workers who have always relied on cash tips as a significant portion of their take-home pay — like valet parking assistants, bellhops, hotel maids, airport skycaps — it’s a big problem.

But it’s one that can be solved, thanks to cashless tipping technology. Long story short: cashless tipping gives your customers an opportunity to show their appreciation for your employees, no cash required. Here’s everything you need to know about cashless tipping…

What is cashless tipping?

Cashless tipping, sometimes known as digital tipping, delivers tips from one party to another online via:

tip acceptance software: allows a diner or guest to tip a service provider digitally/without cash
tip distribution software:allows an employer to digitally/instantly pay out tips to an employee at the end of a shift.

Why is it important to offer cashless tipping options?

Cashless tipping options ensure that tipped employees can continue to maximize their tip earnings and access them in a timely manner. They can also make it easier for employees to accurately track and report on their tip earnings for tax purposes (which, in turn, ensures they can qualify for unemployment, loans, mortgages, credit cards, etc.).

On the employer side, introducing cashless tipping into your operations gives you a more seamless way to facilitate tipping across your team, building more transparency, trust, and employee loyalty. Cashless tipping also allows you to track tips more carefully, both for reporting to the IRS and so you can better understand employee performance.

What are the benefits of cashless tipping for restaurants?

Most U.S. restaurants already accept cashless tips via credit cards or at your point-of-sale system (POS). That means consumers can easily tip, even if they’re not carrying cash.

But paying out those cashless tips at the end of a shift becomes a problem. As a result, cashless tip distribution software has become a must-have tool for restaurants, especially those where the majority of tips are paid by consumers on credit cards, debit cards, or your POS.

Cashless tip distribution software, A.K.A. digital or automated tip distribution software, delivers a number of benefits to both employers and employees:

Time and cost savings

Bottom line: employees want instant access to their tips. But when tips aren’t left in cash? Restaurant managers are left scrambling at the end of the night, often making bank runs, counting out cash, and creating a whole lot of opportunity for theft and human error.

Sometimes, restaurants will end up putting tips on payroll, but that’s not a great solution for workers who want and need immediate access to their earnings. By digitizing tip payouts, restaurants can streamline the payment process. That eliminates bank runs and tedious cash counting (saving managers hours every week), while also reducing the opportunity for skimming and rounding up to the nearest dollar, shift after shift (after shift).

More effective recruiting

OK, one more time for the people in the back: employees want instant access to their tips. So when restaurants can offer real-time, digital tip payouts, that becomes a great recruiting tool. It keeps hospitality employers competitive with other gig-economy jobs that offer instant, daily pay — and more importantly, it shows you care about the financial wellbeing of your workforce.

Employee retention

Turnover costs restaurants more than $1,800 for general employees, and up to $8,000 per manager. It’s more important than ever to give your employees reasons to stay with your restaurant over the next one down the street.

You can offer all the fun employee perks in the world, but if you aren’t ensuring that your employees are getting instant access to their earnings, and maximizing their earning potential, then those short-term gimmicks (think: hiring bonuses) will only go so far, and your employees will be bouncing from one job to the next. Cashless tip distribution is a sustainable, cost-effective way to reduce employee turnover.

Compliance with labor and tipping laws

Hospitality employers must pay at least the federal minimum wage, which comes to $7.25. Under the Fair Labor Standards Act (FLSA), however, restaurants are eligible for a tip credit, which allows them to drop that number to as low as $2.13 an hour (depending on the state in which your business operates), relying on tips to make up the difference. This puts the onus on the employer to ensure ensure their employees are receiving enough tips to get them to minimum wage. Digitizing tip-outs makes it easy to easy to track and report tips — giving you, your employees, and your accounting team 100% visibility.

Also worth noting: Tip pooling laws are complicated and can vary greatly from one state to the next. Cashless tip distribution software helps restaurants maintain compliance, ensuring your employees are being treated fairly and keeping your restaurant out of legal hot water.

What are the benefits of cashless tipping in hotels and airports?

Hotel and airport employees have been among the hardest-hit tipped workers when it comes to this movement toward a cashless society.

Think about it: there’s no immediate bill attached to many of these services, and no POS interaction — like when a valet assistant parks your car, a bellhop delivers bags to your room, a hotel maid makes your bed, a skycap handles your luggage, etc.

Sure, some folks might sprint to the ATM — but for the most part, if consumers don’t have cash on the spot, their service providers will lose out on a tip.

That’s why hotels, airports, and other service industry employers are enabling the acceptance of cashless tips. Two key benefits of cashless tipping for hotels and airports:

A more seamless experience for consumers. The option to tip digitally allows hotel guests and travelers to easily tip when they want to, where they want to.
Increased employee earnings. Cashless tip acceptance boosts your employees’ take-home pay — so they don’t have to suffer just because no one is carrying cash these days.
Stronger employee performance. With the option to tip digitally, consumers aren’t limited by how much cash they have in their pockets. That means employees have the opportunity to earn larger tips, incentivizing them to provide top-notch service.
Improved recruiting and retention. When your employees are fairly compensated — and have higher earning potential — it gives them a reason to stay with their current employer versus jumping around. Plus: they tend to be happier and feel respected by their employer, making for a stronger workplace culture.

What are the downsides of cashless tipping?

As mentioned above — one of the biggest hiccups that comes with the switch to cashless tipping is the tip payout process. When employers enable cashless tip acceptance, that means there’s essentially no cash on hand to pay out tips at the end of a shift.

Yes, cashless tipping is great for all of the reasons outlined above. But at the end of the day (literally), hospitality workers want instant access to their earnings. And you can’t put digital, cashless tips in your pocket.

Some employers might put tips on payroll (making their people wait days or weeks for their earnings). Or they’ll consider pay cards — which unfortunately charge hidden fees or service charges that further reduce available tips for your staff.

That’s why it’s critical that employers who enable cashless tipping also take take advantage of real-time digital tip payout software.

According to a recent PYMNTS.com survey, 83% of workers want access to earnings after every shift, and 80% prefer those funds get automatically streamed to their bank accounts. Instant, cashless tip payouts gives employers the ability to meet those demands.

Implementing cashless tip payout software

Kickfin is the largest enabler of real-time, cashless tip payouts. It can be used as a standalone software, or it can integrate with the rest of your hospitality tech stack — POS system, payroll software, etc.

Employers can get Kickfin up and running in one day. Once your restaurant or hotel signs up:

Employees create an account and connect it to their existing bank account.
Managers input the total tips at the end of a shift and automatically distribute them.
Funds appear in employee bank accounts immediately and are ready to use.

Kickfin makes tip distribution safe, seamless (and trackable!), whether you’re enabling tipping through your mobile app, your POS, or both.

Learn more about how Kickfin can help your restaurant, bar or hotel business — schedule a demo today!

You might also be interested in

Product and Company News

2025 Roundup: Your Favorite New Tip Management Features

2025 was a defining year for Kickfin and the customers who rely on our software to automate their tip management processes

Driven by direct customer feedback and the evolving realities of restaurant operations, our Product Development team delivered a wave of meaningful enhancements across tip calculation, integrations, user controls, and accounting.

Before we look ahead to 2026, here’s a look back at the product advancements that made Kickfin more robust, more flexible, and more ready to meet the demands of restaurant teams than any other tipping solution.

Advanced Tip Calculator Enhancements

n 2025, we significantly expanded the functionality of Kickfin’s Tip Calculator. Here are a few standout features that we released:

Separate Tips and Auto-Gratuities

Kickfin now tracks tips and auto-gratuities separately, allowing operators to report them independently to payroll and manage them differently for tax purposes.

This distinction is especially important in light of the 2025 No Tax on Tips legislation. While tipped employees no longer pay federal income tax on the first $25,000 in tips earned annually, auto-gratuities, service fees, and other compulsory charges remain taxable.

Kickfin ensures those earnings are categorized correctly from the start — reducing downstream payroll and compliance risk.

House Accounts for Service Charges

Not all service charges are distributed 100% to employees — and Kickfin allows you to handle that with “House Accounts.”

Operators can retain a portion of service charges while distributing the remainder to the team. This is particularly valuable for:

Special events and private dining
Paying out job roles that don’t typically participate in tip pools (e.g., event managers)
Maintaining clarity and transparency around service charge allocation

More Flexible Tip Share Logic

No two restaurants share tips the same way — and Kickfin’s calculator now supports even more real-world scenarios.

Operators can configure tip shares:

By shift or by check close, ensuring support staff are compensated appropriately even if they didn’t touch a specific check
By hours worked or split evenly, a level of flexibility that remains unique to Kickfin
With advanced rules for “remaining tips,” allowing operators to define how servers and bartenders split earnings after support positions are paid out.

These enhancements allow Kickfin to support everything from simple pools to highly complex policies.

Check-Level Edits for Greater Accuracy

POS data doesn’t always capture every nuance, so managers may need the ability to make changes.

Kickfin now supports individual check-level edits for:

Cash tips
Auto-gratuities
Check details and splits

This ensures large parties, special events, and edge cases are handled accurately.

Tip Calculator Change Log for Auditability

Any check-level change made by a manager is recorded in a detailed change log. This creates a clear audit trail, helping operators resolve questions quickly and reinforcing transparency and trust with staff.

Enhanced Functionality for Smarter Cash Handling

Thousands of restaurants use Kickfin because they don’t have enough cash on hand to pay out credit card tips, and they want to reduce the amount of cash handling in their restaurant altogether.

However, we know cash will probably always be a (small) part of the equation. Kickfin makes it easy for you to handle that with some added functionality:

Tips left in cash: If a diner leaves a pile of cash at your table, it might not get recorded in your POS. However, Kickfin allows you to record it and distribute it through our platform.
Cash payouts: Many operators may want to distribute all of the cash left in their register at the end of a business day to avoid bank runs for deposits. Again, that’s easy to do with Kickfin’s “Blended Payouts” feature.

Enhanced Support for Toast Delivery Service Tips

Kickfin now handles Toast Delivery Service tips more intelligently by excluding driver tips from the general tip pool and assigning those tips directly to the delivery driver. This ensures tips are distributed exactly as intended.

Kickfin delivers on all of those fronts by:

Freeing managers up from bank runs and the back office, so they can focus on everything that can’t be automated.
Ensuring employees walk out the door with their earnings already in their existing bank account, no waiting, no detours.
Helping operators stay compliant, track everything, and uncover new efficiencies.

Expanded POS and Payroll Integrations

New POS Integrations

In 2025, we expanded our POS ecosystem with new integrations including Union POS and rPOWER. POS integrations eliminate manual uploads, reduce errors, and enable real-time tip calculation and reconciliation. Learn more about integrating your POS with Kickfin.

New Payroll Integrations

We also launched new payroll integrations with ADP Run, Paylocity, and Restaurant365 Payroll.

Once activated, Kickfin generates export files that sync seamlessly with your payroll system — significantly reducing manual work for payroll teams.

Looking Ahead

platform that keeps pace with the ever-changing complexity of modern hospitality operations.

If you’re not yet using Kickfin, now is the time to see what advanced tip management really looks like 👉 Schedule a demo today!

If you’re already a Kickfin customer, our team is happy to walk you through what’s new. 👉 Schedule a quick consult to learn more.

And of course: Stay tuned for what’s to come in 2026!

Product and Company News

Kickfin Named to Deloitte Technology Fast 500 List for Second Consecutive Year

Kickfin is proud to announce that we have once again been named to the 2025 Deloitte Technology Fast 500™, a ranking of the fastest-growing technology, media, telecommunications, life sciences, fintech, and energy tech companies in North America, now in its 31st year.

Kickfin is the only company on the list purpose-built for restaurants and bars to automate tip management — marking another major milestone for our team, our partners and the thousands of restaurant operators who trust us to modernize their tip-pooling and payout workflows.

Why it matters

When it comes to tipping out employees, cash is no longer king — and needs are changing fast. Hospitality workers demand (and deserve!) faster, cashless payouts; burned-out managers need more hours in their day; and now more than ever, operators care about visibility, compliance, and employee satisfaction.

Kickfin delivers on all of those fronts by:

Freeing managers up from bank runs and the back office, so they can focus on everything that can’t be automated.
Ensuring employees walk out the door with their earnings already in their existing bank account, no waiting, no detours.
Helping operators stay compliant, track everything, and uncover new efficiencies.

What sets Kickfin apart

There’s a reason Kickfin is the best-in-class tip management solution.

Broader POS integrations: We’ve expanded our direct integrations with leading POS brands, including Toast, Square, SkyTab, Genius POS, Union, and more — so managers can pool and pay out tips in a matter of clicks.
Enhanced tip-pool logic and flexibility: Our platform automates even the complex tip pool policies, with more tip pooling and automated reconciliation features than any other solution, while keeping the end-user experience simple and intuitive.
Instant, cashless payouts: With fewer cash drawer runs and real time bank deposits, teams experience faster shift-close, fewer errors and improved satisfaction.
Built-in compliance and reporting: As tip-pooling regulations continue to evolve, Kickfin empowers customers with robust features like digital paper trails and payroll integrations to ensure accuracy and compliance from end to end.
Customer success focus: Our fully U.S.-based Customer Success team is partners with customers to make onboarding fast and easy, no matter how tricky your tip policy may be, so you get ROI right away.

A big thank you

We’re honored to be recognized by Deloitte, and even more excited about what comes next. For restaurant operators, managers and employees alike, the future of tip management is here, and we’re thrilled to be your partner.

Ready to see what automated tip pooling and instant payouts look like in action? Book a demo today!

Product and Company News, Technology and Software

New Kickfin Feature Alert: Blended Payouts Are Here!

Brand new feature, coming in hot!

As part of our latest product release, Kickfin now offers Blended Payouts for even easier, fully automated tip management and reconciliation.

Why Blended Payouts Matter

Now more than ever, restaurant guests use credit cards or digital payment methods instead of cash. For many operators, that means there isn’t enough cash on hand at the end of a shift to pay out tips. But employees still want to receive their payouts immediately after clock-out.

As our customers know, Kickfin solves for those cash shortages by automating and digitizing the payout process — giving you the power to send instant, cashless payouts directly to your employees’ bank of choice, 24/7/365.

The result: minimal cash handling and risk, better accuracy and tracking — and of course, fewer bank runs.

However, digitizing payouts often results in some leftover cash in the drawer. Over time, we’ve heard from customers who prefer to use up that cash to pay out tips, then distribute the remaining tip amounts via Kickfin.

With Blended Payouts, you can do just that — and still account for every penny paid out, quickly and accurately, within the Kickfin platform.

How Blended Payouts Work

As always, all Kickfin customers can still choose to split individual payment amounts between instant payouts and payroll. Once you enable the new Cash Payouts feature, you will now be able to account for any cash tip payments that were also distributed.

Note: This feature lives within Kickfin’s Tip Calculator, which means you must have an active POS integration to use it.

Once it’s enabled, you’ll see the new “Cash Payouts” button on the Payment Review screen.
After clicking the button, users will be able to enter the individual cash amounts that were distributed to employees.
Back on the Review screen, you’ll see instant payout, payroll, and cash payment amounts for each employee. All three payment methods will have their own line items and be accounted for under your Payment Details.

Watch here for a full walkthrough of the new feature.

Ready to enable Blended Payouts?

If you’re a current customer, in touch with our Customer Success team at support@kickfin.com to activate this new feature.

(Not a customer yet? Click here to see Kickfin in action and learn how you can automate tip pooling and payouts!)

Product and Company News, Technology and Software

Kickfin Partners with Union POS to Automate Tip Distribution for High-Volume Bars and Restaurants

Kickfin is excited to share the latest addition to our integration marketplace. Read on for all the details around our partnership with Union POS. (If you’re a current Union POS customer and you’d like to learn more about how Kickfin automates tip pooling and payouts, schedule a live demo here.)

AUSTIN, Texas (August 13, 2025)—Kickfin, the leading tip management software, today announced the launch of its integration with Union, the purpose-built POS and engagement platform powering the nation’s busiest bars, nightclubs and restaurants.

Thousands of operators use Kickfin to eliminate tedious tip calculations and remove cash from the tip distribution process so managers can move faster, track everything, and ensure accuracy and compliance.

By activating the Kickfin-Union integration, we eliminated clunky spreadsheet formulas and fully automated our tip pooling process. After going live, we reduced our time to close out by an average of 30 minutes after every shift.

The Kickfin-Union integration gives Union’s customers the power to auto-calculate tip pools in a matter of clicks and send payouts directly to employees’ bank of choice—no cash or pay cards required.

“By integrating with Kickfin, we’re giving operators the power to choose best-in-class tools that work seamlessly with their Union POS and data,” said Alex Broeker, the CEO and founder of Union. “This direct integration brings automated tip management to our operators while unlocking new opportunities for operational efficiency, employee satisfaction and simplified compliance.”

KPG Hospitality, which operates experiential bars and unique concepts throughout Texas and Tennessee, was among the first operators to activate the Kickfin-Union POS integration.

“Our venues run at a very fast pace. When you consider the time it takes managers to manually calculate tip amounts every day, after every shift, across every location, it’s a lot of unnecessary admin hours,” said Troy Cramer, the managing partner at KPG. “By activating the Kickfin-Union integration, we eliminated clunky spreadsheet formulas and fully automated our tip pooling process. After going live, we reduced our time to close out by an average of 30 minutes after every shift.”Key Features of the Union + Kickfin Integration:

Automated Tip Pool Calculations: Calculate complex tip pools in seconds, saving managers hours of administrative work while ensuring accuracy and transparency.
Instant Cashless Payouts: Pay out tips directly to employees’ bank of choice instantly, eliminating the need for cash handling and bank runs.
Simplified Compliance: Maintain a digital record of every payout, making tip reporting and tax compliance straightforward.
Enhanced Tracking: Easily track tips by pay period with comprehensive reporting capabilities.
Streamlined Operations: Implement complex tip policies with just a few clicks through an extremely easy-to-use interface.

“Our integration with Union, a leading POS system built specifically to support the busiest venues in the industry, makes perfect sense,” said Kickfin co-CEO Brian Hassan. “Together, we’re creating a solution that saves time, reduces errors, and delivers a better experience for both operators and their staff.”

Available immediately through both Union and Kickfin, venues can integrate their systems and begin leveraging these capabilities today. To learn how this partnership can transform your tip management operations, schedule a demo at GetUnion.com or kickfin.com/demo.

About Union
Union powers a first-of-its-kind venue operating system purpose-built for the nation’s busiest bars and restaurants. More than a point-of-sale, Union connects 1,500+ establishments with 5M+ consumers and leading brands through real-time consumption data. The platform drives operational efficiency, enables frictionless mobile ordering, and facilitates brand-patron interactions that enhance venue loyalty. With $2B+ in annual transactions, Union creates a virtuous cycle where venues improve customer experiences, brands gain direct consumer engagement, and patrons enjoy personalized rewarding hospitality—transforming high-volume operations into next-gen guest experiences. To learn more about Union, visit http://www.getunion.com

About Kickfin
Kickfin is a leading digital tip management platform that automates tip pool calculations and delivers cashless tip payments directly to employees’ bank accounts. Designed to eliminate the administrative burden of tip management, Kickfin helps restaurants, bars, and hospitality venues save time, reduce errors, and improve employee satisfaction. With features like instant payments, digital record-keeping, and simplified compliance, Kickfin is transforming the way venues handle tip distribution in today’s increasingly cashless economy.