Restaurant Revitalization Fund: Before You Apply, Read This

By now, you’re probably well aware that the American Rescue Plan Act of 2021 has been passed. The Act created a $28.6 billion Restaurant Revitalization Fund (RRF) — which most are viewing as a huge win for the hospitality industry.

Of course, like any piece of legislation, the RRF comes with a lot of fine print. So we partnered with CohnReznick to answer your top questions, clear up misconceptions, and help you prepare.

Not sure if you qualify? Or what you’re entitled to? Or how is this different from the PPP? We cover it all in our Q&A below. Read on!

(Please keep in mind: this does not take the place of legal or accounting advice!)

Restaurant Revitalization Fund:

The highlights

$28.6 billion in funding for restaurant relief signed into law on March 11, 2021
Administered by the U.S. Small Business Administration (SBA)
Eligible entities can receive a tax-free grant of up to $10 million total, with a cap of $5 million per location
The amount of the grant must not exceed the “pandemic-related” revenue loss

We interviewed Stephanie O’Rourk, CPA and partner at CohnReznick, to get the lowdown on the RRF. Stephanie leads the firm’s National Hospitality Emerging Concepts and Operational and Financial Consulting Divisions.

A lot of restaurants are pretty familiar with the PPP at this point. How is the RRF different?

There are some similarities between the PPP and the RRF, especially when it comes to tax treatment and permissible utilization of funds.

But the biggest differential between the two— and this is considered a huge win for the industry — is that while the PPP is distributing loans, the RRF is distributing tax-free grants. That means you have nothing to pay back, you won’t owe any taxes on the amount you receive, and (another bonus), as long as you follow the RRF guidelines, everything you use the grant funds for is tax deductible.

Other things to note with the RRF:

A longer covered period to utilize the funds
No specified percentages as it pertains to how much of the funds need to be utilized for eligible payroll expenses
No complex loan forgiveness process to deal with, which means there’s more flexibility for restaurant operators to utilize the funds in a manner that makes the most business sense for their day-to-day operations and individual situations.

Can you give us a quick rundown of who actually qualifies for a grant?

Restaurants, food stands, food trucks, food carts, caterers, saloon, inns, taverns, bars, lounges, brewpubs, tasting rooms, taprooms, licensed facilities or premises of a beverage alcohol producer where the public may taste, sample, or purchase products, or other similar places of businesses in which the public or patrons assemble for the primary purpose of being served food or drink; including an entity located in an airport terminal or that is a Tribally-owned business.

Who doesn’t qualify?

If you are a group of affiliated entities with more than 20 locations, you aren’t eligible for this grant. It doesn’t matter if you’re doing business under the same or multiple names.
State and government operated entities
Publicly traded entitites
Any entities with pending or approved grants under the Shuttered Venue Operators Grant

How do you define a group of affiliated entities?

The Act defines an affiliated business as a business in which: “an eligible entity has an equity or right to profit distributions of not less than 50%,” or “an eligible entity has the contractual authority to control the direction of the business.”

How do franchisees fit into this?

Franchisees of chain restaurants are eligible, but the “not more than 20-location” rule still applies for affiliated groups.

Let’s say you own 5 Applebee’s locations, 7 Jimmy John’s locations, and 9 Denny’s locations. The SBA is looking at all of those combined, so you would exceed the 20-location rule and none of your affiliated restaurants would be eligible for the grant.

How do I determine how much I’m entitled to?

The legislation states that the amount of the grant must not exceed the “pandemic-related” revenue loss. For businesses in operation for all of 2019, the pandemic-related revenue loss is calculated by subtracting your 2020 gross receipts from your 2019 gross receipts.

But we’re seeing a lot of misinformation out there, largely because of the PPP. The new legislation also states that the pandemic-related revenue loss amount you’re entitled to will be reduced by any PPP loans that you received (both 1st and 2nd draw amounts) — until further guidance is released by the SBA operators should assume the total amount received regardless of whether you have repaid a portion or all of your loan. As an example:

Let’s say you did the math and determined that your pandemic-related revenue loss was $30 million.
At some point, you received a PPP loan for $10 million.
And as of December 27, 2020, you’ve returned $5 million of that PPP loan.

The SBA is saying your pandemic-related revenue loss is going to be $20 million — not $30 million, and not $25 million, making you eligible for a potential $10 million for an affiliated restaurant group, and $5 million if you operate one physical location.

We could receive more specific guidance around this in the coming weeks. But for now, the Bill states the total amount of PPP loans received must be subtracted.

With that in mind, how should restaurants be handling their PPP loans?

Restaurants have until March 31, 2021, to draw or re-apply for the PPP. Businesses that were previously approved for a PPP loan but decided to return a portion or the full amount of their PPP loan proceeds should consider whether to re-apply for their originally approved maximum loan amount.

What if a restaurant opened in mid-2019, or at some point in 2020? How do they calculate their loss?

For entities not open for the entirety of 2019, average monthly receipts multiplied by 12 may be used for both 2019 and 2020.
If the entity opened during the period beginning on Jan. 1, 2020, and ending on the day before the date of enactment, the grant is calculated by taking the entity’s eligible payroll costs incurred by the entity and subtracting any gross receipts received.
For an entity that is not yet open at the date of application, the grant is the amount of eligible payroll costs incurred

It’s worth noting that SBA reserves the right to implement an alternate formula for any of the above-mentioned scenarios.

What can I use the grant for?

It’s pretty well defined and very similar to the PPP. Payroll costs, principle and interest payments on mortgage obligations, rent, utilities, maintenance expenses (including construction to accommodate outdoor seating as well as walls, floors , deck surfaces and FF&E), supplies (including PPE and cleaning supplies), normal food and beverage inventory expenses, paid sick leave and any other expenses the SBA determines to be essential to maintaining an eligible entity..

You cannot use the funds for business expansion purposes as this is not deemed a permissible usage of the funds. And you’ll need to be prepared to make the same good faith certification that PPP borrowers made — i.e., current economic conditions makes necessary the grant request to support the ongoing operations of the eligible entity.

Transparency is key. We expect the SBA will reserve the right to audit businesses to ensure the grant was properly used, so excellent record keeping is important.

If a recipient of the grant does not use all grant funds or permanently ceases operations on or before the last day of the Covered Period (defined as beginning Feb. 12, 2020, and ending Dec. 31, 2021, or an alternative date to be determined by the SBA that is not later than two years after the date of enactment) any remaining funds must be returned to the Treasury.

What’s the timeline like, and who gets priority? (Translation: When will I see the money?)

The SBA has 60 days from the date of enactment to formulate the rules and regulations of the program, and then applications open up.

When that happens, you’ve probably heard that the first $5 billion has been earmarked for businesses with not more than $500,000 of 2019 gross receipts. Further, for the first 21 days, all grants will be prioritized for small businesses owned and controlled by women, veterans, or other socially and economically disadvantaged groups.

Beyond that, one can not automatically assume it will be based on a first come first served basis; it’s possible that the SBA could issue additional guidance. If the current PPP round is any indication, there’s going to be a heavy focus on helping out Main Street America — those operators who really don’t have access to capital or other financial resources. Average PPP loan sizes in this last go around are hovering under $70,000, so it will be interesting to see if they prioritize the smaller grants here too, before getting to those larger ones.

So, it seems like restaurants are in a holding pattern. Is there anything they can do to prepare while they wait for applications to open up?

It’s definitely a good idea to have everything locked and loaded. There are a few things you might consider doing:

Gather the right financial information. For example, financial statements and tax returns for 2019 and/or 2020. If you’re a smaller operator and you don’t have sophisticated recordkeeping, you may be able to show documentation like bank statements and deposits, which were allowed on the second draw PPP loans.
Get a DUNS number. The Shuttered Venues Operator program required applicants to have an active registration in the U.S. government’s System for Award Management (SAM). To do that, you’ll need a DUNS number. You can learn more about the process here: [link]

What’s the general consensus about the RRF? Do we think it will truly move the needle in terms of recovery for the industry?

This is a long-awaited program and has been requested by many groups that advocate for the industry, including the National Restaurant Association, the Independent Restaurant Coalition, and various State Restaurant Associations.

Again, the fact that it’s a grant, not a loan, is a tremendous win — and being that the grant is not deemed to be taxable income to the recipients and permissible expenses are tax deductible makes this program that much sweeter for the industry.

Do I think it’s going to go fast? Yes, I do. While $28.6 billion appears to be a lot of money, there are numerous businesses that continue to be in economic distress and are hungry for a program such as this one. Hopefully this fund will give these businesses the support they need to make it through the next 6, 9, 12 months — until our country gets back to some semblance of a new normal.

About CohnReznick

As a leading advisory, assurance, and tax firm, CohnReznick helps forward-thinking organizations achieve their vision by optimizing performance, maximizing value, and managing risk. Clients benefit from the right team with the right capabilities; proven processes customized to their individual needs; and leaders with vital industry knowledge and relationships.

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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.

Industry Trends, Restaurant Management

Kickfin vs. TipHaus: Which Tip Management Software is Best for You?

If you’re in the market for tip management software, you might find yourself comparing Kickfin and TipHaus.

Kickfin is the largest provider of instant tip payouts on the market and has processed more than $2 billion in employee payments for all kinds of restaurants, from “mom-and-pops” to national franchises — and everything in between.

Kickfin and TipHaus are both designed to digitize tip distribution for restaurants. However, there are some significant differences between the two platforms that you’ll want to consider before making a decision.

Kickfin and TipHaus: Compare at a Glance

Why Do Operators Choose Kickfin Over TipHaus?

Kickfin Offers Better Pricing

Kickfin’s direct-to-bank transaction fees are more competitive than the transaction fees TipHaus quotes their customers.

This is primarily due to the fact that Kickfin is the largest provider of instant payouts in the country (validated by Visa and MasterCard data), with more than $2 billion in employee payments and multiple payment processor relationships.

Employees Prefer Kickfin

Kickfin was built to make life easier not just for operators, but also for their employees.

No app downloads: Kickfin only requires a one-time, 30-second enrollment for employees. (No app downloads or extra phone storage needed!) Payment history and reporting data can be viewed as needed simply by logging into their browser.
No paycards required: Kickfin also doesn’t require pay cards, while TipHaus offers “HausMoney” as a primary payout option for employees. HausMoney is essentially a pay card that employees’ tips are loaded onto. Funds aren’t available to use until the following day. HausMoney may be free for operators, but many employees don’t want to be forced to use a pay card due to the hassles of transferring funds to their own bank accounts, as well as the transaction fees and wait times they may incur. They’d prefer their earnings streamed to their accounts instantly, after every shift—which is how most Kickfin customers choose to pay out their employees.

Zero Prefunding* With Instant Payouts

With Kickfin, customers can send instant, direct-to-bank payouts with zero prefunding required.* While TipHaus does offer zero prefund, employee payouts must be sent to a TipHaus paycard (HausMoney). In other words, if you want to use a zero prefund option with TipHaus, you won’t be able to offer instant, direct-to-bank payouts to your employees.

Option to Manually Input Tip Data

With TipHaus, a POS integration is required, and all tip payment data is generated by the software’s tip calculator.

Kickfin was designed for ultimate flexibility. While many customers use Kickfin’s POS integration to auto-calculate tip amounts, some restaurants don’t need automated tip calculations and prefer to use Kickfin unintegrated. That isn’t an option with TipHaus.

Additionally, some Kickfin customers use Kickfin to auto-calculate tip pools, then manually upload other tip data on an as-needed basis. This comes in handy when you need to pay out “extra” staff, like entertainers, security guards, etc.

Easy, Accurate Distribution of Auto-Gratuities and Service Charges

Kickfin tracks Tips and Auto-gratuities separately. As a result, you can report those types of payments to payroll separately and handle them independently for tax purposes.

Why does that matter? In light of the 2025 “No Tax on Tips” legislation, tipped employees no longer have to pay federal income tax on the first $25,000 in tips earned each year. However, they do need to pay taxes on earnings from services fees, autogratuities and other compulsory charges that are not considered tips by the IRS.

(If 100% of your service charges does not go to your employees, Kickfin allows the “house account” to retain a portion of service charges, while the rest is distributed to your team.)

Enhanced Tip Calculation Functionality and Features

Kickfin’s Tip Calculator was designed to be both highly robust—so it can handle the most complex tip pooling policies—while also being incredibly simple and intuitive to use.

A few unique things about Kickfin’s Tip Calculator:

No data sync delays: Tip calculations are immediate and on-demand. With Tiphaus, a data sync process is required which can add extra time to your tip calculation process.
Built-in flexibility: Kickfin releases new Tip Calculator features on a regular basis based on feedback we regularly source from customers. For example, Kickfin now offers check splitting for both individual checks and groups of checks, making it easier to handle large parties and events.
Ease of use: Customers regularly shout out our sleek, high-quality user interface compared to other platforms. Notably, we’ve made it easy for managers to review all details before hitting “submit,” ensuring the accuracy of every payout.

Cash Tip Tracking and Payouts

Many operators choose 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. Again, that’s easy to do with Kickfin.

Multiple Payment Processors for Guaranteed Deliverability

For many employees, especially those living paycheck to paycheck, it’s critical that they receive their tip earnings and that they’re instantly accessible/ready to use.

TipHaus uses only a single processor. Kickfin uses multiple payment processors to ensure deliverability of payouts should a processor experience a disruption or become insolvent.

Direct POS Integrations

All of Kickfin’s POS integrations are direct API integrations, while TipHaus has been known to utilize third-party software to integrate with some POS systems. The problem with third-party software is that it can be susceptible to more connectivity issues, creating problems with data reliability.

Top-Ranked Customer Support

Kickfin has an award-winning Customer Success team that is exclusively focused on helping our operators get the most value possible out of Kickfin.

Every member of our team is based in the U.S. We provide free, personalized training and onboarding for your whole team, and when questions or issues arise, we can be reached by phone, email, text or chat. We also have a robust library of support documentation and videos that provide step-by-step guidance for every aspect of the platform.

Credibility and Recognition

At the end of the day, Kickfin’s large and fast-growing customer base speaks for itself, as do their rave reviews of the platform.

For multiple years, Kickfin has been the only tip management software that is recognized on both the Inc. 5000 and Deloitte Fast 500 lists. Kickfin has received recognition from peer software review sites like G2 and Capterra for consistently high customer rankings and reviews.

*Zero prefund is available to select customers after a credit review to confirm their fit with the zero prefund program.

Ready to take the next step?

See why thousands of restaurant pros use Kickfin to auto-calculate tip pools and pay out tips in real time, no cash or math required! Get a demo today.

Industry Trends, Restaurant Management

FAQ: What the “No Tax on Tips” Act Means for Restaurant Operators and Your Restaurant Team

We’ve been talking about “No Tax on Tips” for months, and now it’s a reality. But what exactly does that mean for restaurant operators and their tipped employees?

Signed into law on July 4, 2025, as part of the broader “One Big Beautiful Bill” tax package, the new policy eliminates federal income tax on tipped earnings (up to a cap…along with some other caveats…) for qualifying workers.

While No Tax on Tips garnered widespread support from hospitality employees and employers alike, there’s still a lot of confusion about how it works, who qualifies, and what it means for your restaurant team.

Our FAQ breaks it all down: the fine print, the benefits, the limits—and how you can make sure your team is positioned to take full advantage.

What does “No Tax on Tips” actually mean for my team?

The No Tax on Tips Act has created a new federal income tax deduction — up to $25,000 of “qualified tips” per year for employees in traditionally tipped occupations.

Tipped employees can deduct up to $25,000 in tips from their federal taxable income. (For added context, based on Kickfin customer data, the average tipped employee earns $125 per shift and works 15 shifts per month. That totals $22,500 in annual tip earnings.)
The deduction starts to phase out at $150,000 in annual income.
The deduction is currently restricted to those who earn $160,000 or less in 2025, but that’s expected to change in coming years to account for inflation.
These earnings are assessed based on employees’ income as of December 31, 2024.

Two other important items to note:

Deduction, not exclusion: This is a deduction, not an exclusion. That means all tips still need to be reported; the deduction will be claimed when your employees file their taxes. The deduction is on top of the standard deduction ($16,000 for individuals, $32,000 for married couples filing jointly).
Other taxes still apply: This bill is all about federal income taxes, so Social Security and Medicare taxes still apply. Also, keep in mind that this is a federal tax deduction. States will individually decide whether or not to align with the change.

Which types of tips are eligible?

The bill applies to cash tips—but it’s technically a little broader than that. According to the Senate Finance Committee, “cash tips” includes:

Physical cash tips
Credit card tips
Tips shared through pooled or tip-sharing arrangements

Other types of charges and fees that restaurant customers pay are not eligible for the dedication.

Mandatory service charges
Surcharges
Automatic gratuities

Essentially, any earnings from compulsory charges are not considered tips. Even if a restaurant passes those funds on to employees, they’re not eligible for the deduction. Do employees have to report their tips to get the deduction?

Short answer: Yes. And aside from being legally required to fully report their tip earnings, it actually behooves them to do so.

It’s no secret that many tipped employees don’t fully report their tip earnings. There are a variety of reasons for this: general confusion about tip reporting, poor tracking, and of course, a desire to avoid taxes.

Credit card tips are automatically tracked in most POS systems, so those are typically accounted for. Cash tips, on the other hand, are often underreported.

Again, because this new bill is a deduction, not an exclusion, employees must report their tip earnings to qualify.

Not only will this (legally) allow employees to reduce their tax burden; reporting their full income can really come in handy with things like loan applications, unemployment benefits, and Social Security earnings.

Is this all good news for employees?

Again, for the most part in the hospitality and service industry, there’s a lot of support for this legislation.

It will put money back in the pockets of many tipped employees—which can make a meaningful difference, especially for those who live paycheck to paycheck.

But some in the industry have voiced concerns:

Lowest-earning tipped workers won’t see much benefit. Many of the lowest-earning tipped workers wouldn’t benefit much, or at all.because they’re not paying a significant amount in federal taxes to begin with.
Some workers excluded: Not all hospitality employees are tipped employees – if you’re not operating a tip pool for example, a lot of your BOH employees aren’t going to see any benefit here.
Service/surcharges/auto-gratuity: Compulsory charges are not considered tips, so even if all of those funds are going to the employees, they will still be taxed. Again, that means BOH workers who aren’t tipped but who benefit from service charges won’t get a tax break.

What do restaurant operators need to do?

While there’s no major compliance burden on employers (yet), the smartest operators are thinking ahead—especially when it comes to digitizing tip management.

Here’s why that matters:

Accurate reporting: Employees need clear, auditable records to claim the deduction
Transparency: With platforms like Kickfin, employees can log in to view their full payment history—no guesswork required
Tip pooling: If you want your BOH team to benefit, you’ll need to operate a formal, compliant tip pool.
Efficiency: Automating tip pools (and ensuring accuracy), managing payouts, and syncing with payroll is easier than ever.

Is it time to hit the reset button?

If you’re already using a digital tip management platform like Kickfin, you’re a step ahead—your team will be well positioned to take full advantage if and when the law goes into effect.

If not: This new policy is a great reason to refresh your tip management approach, including digitizing your distribution process, re-evaluating your tip pool policy, and improving payment tracking for your team. And good news—Kickfin can help with all of that. Let’s talk.

Restaurant Management

Tales from Reddit: (Brutally) Honest Opinions on Tip Pooling

Have you ever wondered how your employees really feel about your tip pool?

While you can (and should!) source feedback from your own team, Reddit is always a great place to get brutally honest opinions on…well, just about anything.

So we did some digging in a few lively Subreddits (r/TalesFromYourServer and r/KitchenConfidential, among others) to understand how real workers feel about their own restaurant’s tip pooling policy.

Of course, no two tip policies are alike, but these Reddit tales may offer some helpful useful insights as you evaluate your own tip policy — and help you avoid common pitfalls.

Tip Pooling Tales from Reddit

Not surprisingly, there are strong feelings about tip pooling from servers and other restaurant employees on Reddit. The conversations often centered around these high-level themes:

Does tip pooling really foster teamwork?
Do top performers take the biggest hit?
Can tip pooling help with income consistency?
Is it fair to include back-of-house?

Read on for a deeper dive!

1. Tip pooling and teamwork

Many Redditors noted that tip pooling can help to create a collaborative, team-first culture where everyone wins.

Of course, that comes with some caveats from the Reddit crowd:

“I own a fine dining restaurant with tip pooling. … servers help each other out and care what’s going on in others sections … the servers REALLY care about training their coworkers right.”

“It’s the best system in the world if you work with a team where everybody is competent and pulls their weight.”

“We do tip pool… Less drama, more teamwork… efficient when you work with people that are hardworking and pull their own weight.”

“It forces a stronger team mentality…No system is perfect and the strongest servers definitely take a hit most days, but it’s the positive environment that makes up for it usually.”

“I think it helps encourage the senior staff to invest in the newbies. Obviously, if the newbies efforts or attitude aren’t cutting it, time to go.”

The takeaway: If you have the right people, then your tip pool becomes a motivator for your employees to have each other’s backs, to participate in training the newbies, and to be accountable to each other. As the last Redditor here noted, it also means you have to be willing to weed out your weakest links.

2. Does tip pooling penalize top performers?

On the flipside, some commenters highlight how employees — particularly top performers — feel the system redistributes their hard-earned earnings to less productive coworkers, which can erode motivation to upsell, promptly turn tables, or cultivate regulars.

“You lose the need to hustle…tip‑pools have taken away my ability to control how much money I walk with … which made me less willing to hustle.”

“‘Lazy people…hold up the tables so they work less than others but make the same money.’”

“I was pulling $400‑$600 by myself and then … only saw $150‑200 of it which really sucks.”

“Personally not a fan of tip pooling. I typically have the highest tip percentage and I’d rather keep that for me.”

The takeaway: When the link between effort and reward is weakened, the drive to earn more through performance can dwindle. Again, as always, the goal is to have a team of top performers across the board — but in reality, you’ll always have a range of talent.

If you’re using a tip management system like Kickfin, you can track your employees’ tip payouts over time and see how payouts actually stack up across your team. You can always tweak your tip pooling policy to ensure your performers are getting rewarded for their extra-hard work. Or consider offering shift-based performance bonuses outside of the pool, based on things like guest feedback or upselling performance. This keeps the pool intact but allows standout employees to earn more.

3. The case for income consistency

When tips make up the majority of your take-home pay — as is the case for many restaurant workers — you may not know what to expect from one shift to the next. That can make managing finances hard, especially for workers who are living paycheck to paycheck.

Tipping is supposed to reward high quality service, so theoretically, tipped employees wield a fair amount of control over what they earn. And tip-pool detractors argue that tip pooling takes away that control.

But in reality, it’s not so black and white. For example, some sections are busier than others; the employee working the patio on a warm summer evening might be set up to earn more than the server working the back corner next to the restroom. The bartender working the night shift is going to earn more than his coworker who’s there for lunch.

And unfortunately, research shows that customer bias and discrimination can impact tip earnings.

As some Redditors pointed out, tip pooling can help reduce this income variability.

“Pooling tips offsets any issues with tables that don’t leave a tip…Overall, this system has increased the quality of service…”

The income might decrease a little bit on busier days but it does usually increase on slower days. And the income is more consistent.”

The takeaway: Of course, it’s not fair to always work the busiest section of the bar, only to split tips evenly with bartenders who work in a much more laid-back section. If you’re pooling tips to help with income variability, it’s wise to find additional ways to control for other variables. For example:

Strategically rotate busy and slow sections among your different servers.
When scheduling, make sure the same people aren’t always opening and closing — and as much as possible, rotate your employees through high- and low-volume shifts.
Offer easy section or shift trades for employees.

4. Should Back-of-House Be Included in Tip Pools?

In addition to the general pooling benefits (collaboration, culture) — there are some valid reasons to include BOH in your tip pool:

Guest experience: When tipping, guests take into consideration things like quality of food and speed of service — which BOH staff heavily contribute to.
Guest expectations: Guests may assume that their tips are getting distributed to everyone — not just servers. (And taking it a step further: clearly communicating that to your guests could generate higher tip volumes.)
Retention: With rising labor shortages, offering tip sharing can help attract and retain skilled BOH workers who might otherwise leave for better-paying jobs.

(Keep in mind: There are some legal restrictions when it comes to including BOH in your pool — e.g., if you’re taking the tip credit, you generally can’t include BOH. Find more details on tip pooling laws and compliance here.)

So what do real-life servers say about including BOH?

“Many places in new orleans had made the switch after quarantine. It’s a God send to the back of house, for most cooks it can be life changing. The FOH is a revolving door now though, why split tips with the kitchen when you can make 600 a night at the bar down the street.”

“I am not upset, I’m getting paid decent and I know how hard it is to smile and be nice all the time and interact with the dreaded public. They are welcome to the extra money and the headache.”

The takeaway: First and foremost, ensure you can legally include back-of-house workers in your tip pool. If you feel it’s right for your restaurant, a few ways to make it work well for everyone:

Get buy-in from FOH and BOH: Clearly communicate how and why the structure works. Share real numbers and example breakdowns, and emphasize shared success — tips reflect everyone’s effort (not just what happens tableside).
Start small: If FOH is resistant, make the tip-out percentage minimal and see how it goes before increasing
Use a weighted distribution model: To fairly divide the tip pool, assign different weights or percentages to each role based on their contribution.

📝 Final Thoughts

Reddit feedback makes it clear…that there’s a lot of gray area when it comes to employee perspectives on tip pooling.

Ultimately, restaurant workers seem to agree that well-executed, shift-based pools under strong management can foster unity and a dependable livelihood.

But in mixed teams or mismanaged setups, performers lose motivation, and the culture quickly deteriorates — which ultimately affects morale and retention. And unfortunately, all of that can spill over into the guest experience.

If you’re pooling tips, one of the most important things you should do (aside from ensuring your tip pool is compliant!) is track everything. Having a digital paper trail not only ensures accuracy and prevents tip disputes — but it also gives you the hard data you need to truly evaluate your tip policy.

Has Reddit swayed your opinion on tip pools? Or made you rethink your current tip policy? With Kickfin’s tip pooling software, you can easily customize and automate your tip pooling policy — then track every payment, all in one place. Schedule a demo today!