Toast Tips Manager Overview
Toast Tips Manager is an automated, customizable tip pooling solution that calculates and distributes tips and gratuities based on your restaurant's tip pooling policy. There are two components:
Tip Pooling: in Toast Web, you build rules that define which jobs contribute tips, what percentages apply, and which jobs receive tips.
Tip Management Report: the output of your tip pooling policy. View, approve, and send to payroll. For details, see Toast Tips Manager Reporting.
Note: Tip pooling is sometimes called "tipout" or "tipping out." Tips Manager handles both pooling (where contributors and recipients are the same job) and tip sharing (where they differ).
Important: This article is for first-time setup. If your tip pooling policy is already configured and you're troubleshooting a specific issue (incorrect distribution, missing tips, employee mapping errors, or unexpected reporting numbers), see Get Help With Toast Tips Manager instead.
Important: Toast Tips Manager pooled results appear in the Tip Management report (in Toast Web) and in the MyToast app for individual employees. Pooled results do not appear on POS shift review prints or checkout slips — those continue to show pre-pool tips.
Important: There is also a separate Toast feature called Tip Sharing in Advanced Shift Review Setup. Tip Sharing is not Tips Manager — it's an older shift-review-based tool. If you use Tips Manager, build all your tip pooling and tip sharing rules in Tips Manager (Toast Web > Employees > Payroll management > Tips pooling policy), not in Advanced Shift Review.
What You'll Accomplish
By the end of this article, you'll have:
Confirmed Tips Manager is available for your restaurant.
Configured the Toast Web settings that affect tip pooling.
Planned and built your first tip pooling rule.
Validated your policy using the Tip Policy Preview.
Saved a policy that's ready to calculate tips for your next pay period.
Before You Begin
Applies to: Toast Tips Manager (paid subscription, US Toast customers).
Permissions needed:
Toast Web admin access for your restaurant
6.6 Restaurant Operations Setup permission — required to edit the tip pooling policy
4.1 Sales Reports permission — required to view and approve tips in the Tip Management report
For Toast Payroll users: Toast Payroll admin access
What you'll accomplish: Complete first-time setup of Toast Tips Manager so it's ready to calculate and distribute tips for your first payroll.
Before you start, plan your policy. Setup goes faster when you've decided how tips will flow at your restaurant. See Plan Your Tip Pooling Policy before building rules — that article walks you through the policy decisions (pooling interval, contributor and recipient jobs, points vs. percentages, and special setups like communal drawer, banquets, and online ordering).
Important: Before setting up tip policies, consult an HR professional and consider federal, state, and local laws when defining your restaurant's tip policy. The federal government outlines tip-pooling regulations in the Fair Labor Standards Act (FLSA). State and local governments may have additional regulations.
Step 1: Confirm Tips Manager Is Available for Your Restaurant
Toast Tips Manager is available to all US Toast customers as a paid subscription. To check pricing or activate Tips Manager, see Toast Tips Manager in the Toast Shop.
You no longer need Toast Payroll to use Tips Manager, but the integration unlocks automatic timesheet imports and faster employee payouts (see Step 2g).
Expected outcome: Tips Manager appears in your Toast Web menu under Toast Web > Employees > Payroll management > Tips pooling policy.
Step 2: Configure Toast Web Settings That Affect Tip Pooling
First, review the settings under Validate Settings. This page consists of mapping different tip types to their earning codes in Payroll. The settings in this step affect how Tips Manager calculates and distributes tips. Confirm each one before you build your first rule.
Step 2a: Confirm Jobs Are Set Up Correctly
Tips Manager distributes tips based on the job an employee is clocked into, not on a per-employee basis. For Tips Manager to work correctly, every employee must be clocking into the correct job in Toast Web, and every job must be assigned appropriately to your tip pooling policy.
If you need to add or edit jobs, see Create and Edit Jobs (Roles) for Toast POS.
Expected outcome: Each job that should contribute or receive tips exists in Toast Web and has the correct configuration.
Step 2b: Confirm Hours of Service
If you plan to pool tips by Service Period (one of three pooling intervals — the others are Full Workday and Order), your hours and services must be configured first. The Hours/Services configuration becomes the basis for when each employee's tips are collected.
To configure hours, navigate to Toast Web > Reports > Settings > Hours/services.
For more on choosing a pooling interval, see Plan Your Tip Pooling Policy.
Expected outcome: Hours/services exist for every period during which tips will be pooled.
Step 2c: Confirm Sales Categories
If you plan to calculate tip pools or tip shares based on the sales employees make from certain categories (for example, Food, N/A bev, alcohol), every menu item must have a sales category assigned. Items with no sales category will not contribute to those pools — a common cause of unexpected tip distributions.
To find items without a sales category:
Navigate to Toast Web > Reports > Sales > Sales breakdown.
Select a wide date range (for example, the last month) and any applicable locations.
Select Submit.
Scroll to the bottom of the table. If you do not see No Sales Category, every item you sold in that range has a sales category. If you do see No Sales Category, select the caret to view all menu items missing a category.
Repeat with other date ranges if you use seasonal menus.
Important: Sales categories are not retroactive. The system only tracks sales categories from the moment you publish the changes. If you recently assigned categories, wait out your current pay period before building tip rules that use a percentage-of-sales source.
To assign or create sales categories, see Assigning Sales Categories in the Menu Builder.
Expected outcome: Every menu item that contributes to tip pools has a sales category assigned.
Step 2d: Configure Mandatory Gratuities
You can include specific types of mandatory gratuities in each tip rule using the checkbox next to the gratuity type. Mandatory gratuity is a type of service charge added to the check by the restaurant and paid to an employee as wages — it's distinct from voluntary tips.
To set up a service charge as a mandatory gratuity, see the "Mandatory Gratuity in Toast" section of Get Started With Service Charges and Mandatory Gratuity.
Expected outcome: Mandatory gratuities you want to pool are configured as service charges of type Mandatory Gratuity.
Step 2e: Configure Tip Withholding
Tip withholding allows your restaurant to reclaim a percentage of employee credit card tips and gratuities to cover the cost of credit card processing fees. To set this up, see Tip Withholding.
Important: Tips Manager does not retroactively update when you change the tip withholding percentage. After a change, future tip distributions reflect the new percentage; past distributions stay as they were. This may cause discrepancies between Tips Manager and the Sales Summary.
Tip withholding is applied before tips are pooled. The Labor Summary displays the amount before tip withholding; Tips Manager displays the amount after.
Expected outcome: If your restaurant uses tip withholding, the percentage is configured before you build your tip pooling policy.
Step 2f: Configure Shift Review Settings
These settings prevent premature distribution of tips at clock-out and prevent undeclared cash tips from leaking out of Tips Manager.
Navigate to Toast Web > Employees > Shift review > Advanced shift review setup.
Configure the following four settings:
Non-cash tips: select Pay out through payroll.
Gratuities: select Pay out through payroll.
Declare cash tips: select Tipped employees must declare cash tips.
Negative cash tips: select Do not allow. (This option only appears once Declare cash tips is set to Tipped employees must declare cash tips.)
While you can pay out cash tips, non-cash tips, or gratuities differently, the settings above are required for Tips Manager to work correctly. For more on Shift Review, see Shift Review Overview.
Expected outcome: All four Advanced shift review settings match the configuration above.
Step 2g: Configure Toast Payroll (If Applicable)
If your restaurant uses Toast Payroll, follow the steps in Tips Manager With Toast Payroll to:
Map your employees between Toast Web and Toast Payroll.
Assign earning codes (for paying cash tips, non-cash tips, or gratuities on the paycheck or before payroll).
Set up the cash tip payout method.
The Tips Manager With Toast Payroll article is required for Toast Payroll customers. Toast does not configure earning codes automatically.
Expected outcome: Employees are mapped, earning codes are assigned, and the cash-tip payout method is selected in Toast Payroll.
Step 3: Plan Your Tip Pooling Policy
Before you build a rule, decide on your policy:
Pooling interval: Full Workday, Service Period, or Order. (Affects your entire policy. Hard to change after rules are in effect.)
Tip Pooling vs. Tip Sharing: in tip pooling, contributor and recipient jobs are the same. In tip sharing, they're different (for example, servers tip out bartenders).
Source(s): non-cash tips, cash tips, gratuities, or sales categories. Do not select both tips/gratuities and sales categories in the same rule.
Distribution method: points or percentages. For more on the differences, see Points and Percentages With Toast Tips Manager.
Special setups: communal drawer, banquets, online ordering, drivers, training employees. See Plan Your Tip Pooling Policy for examples.
Expected outcome: You know which contributor and recipient jobs go in your first rule, the source, the percentage, and the distribution method.
Step 4: Build Your First Tip Rule
You can build your first rule using the Tips Manager onboarding wizard or by adding a pool manually. The wizard is recommended for first-time users; manual setup is faster once you've built a rule.
Option A: Use the Onboarding Wizard
Navigate to Toast Web > Employees > Payroll management > Tips pooling policy.
Select Visit policy onboarding at the top of the page.
Follow the wizard prompts. For details on each wizard step, see Toast Tips Manager Onboarding Wizard.
Expected outcome: The wizard saves your first rule and the policy page shows the rule with its contributor and recipient jobs.
Option B: Add a Pool Manually
Navigate to Toast Web > Employees > Payroll management > Tips pooling policy. (Alternatively, search for Tip pooling policy in the Toast Web search bar.)
Confirm or change the Tip pooling interval at the top of the page (Full Workday, Service Period, or Order). This option affects your entire policy — change with care after a policy is in effect.
Scroll down. If your restaurant uses Toast Online Ordering, you'll see a prompt to complete its tip-sharing setup. Skip this for now and return to it later. For details, see Tips Manager and Online Ordering.
Select +Add pool to start a new rule.
Select the [UI appearance requires validation] edit icon next to the pool name and rename the pool to describe the contributing and receiving jobs (for example, "Server tips out Busser"). If your restaurant has Toast Payroll and your employees use the MyToast app, employees see the pool name in their digital reports.
Under the Contributor drop-down, select the job that contributes tips.
Online Ordering and Salaried is a virtual job. Employees who don't have a time entry — for example, salaried staff who don't clock in to a POS device — are automatically categorized under Online Ordering and Salaried (or just Salaried, if you've already set up an online-ordering rule). In Toast Payroll, employees without a time entry can contribute to a pool but cannot receive from one.
Enter the Contribution % — the percentage of the source that this contributor adds to the pool.
For communal drawers or generic servers (such as online ordering), use 100% to prevent unallocated tips.
Select the Source — where the tips are coming from. Options include:
Non-Cash Tips — tips paid by credit card, gift card, or other non-cash payment.
Cash Tips — tips paid in cash.
Gratuities — listed individually by name, or as Cash Gratuities or Non-Cash Gratuities.
Sales Categories — every sales category configured at your restaurant. Use Configure Sales Categories to create new ones if needed.
Important: Do not select both tips/gratuities and sales categories in the same rule.
Select +Add contributing job to add another contributor to the same pool, or move on to recipients.
Under Which jobs receive tips from the pool?, select the recipient job.
In a tip pool, the contributor and recipient are the same.
In a tip share, the contributor and recipient differ. Build rules with as many contributors as needed but ideally one recipient job per rule, to avoid calculation complexity.
With one recipient job, only the Job drop-down appears. With more than one recipient, select +Add recipient job to set points or percentages per recipient.
To change how tips are split among recipients, select Advanced options:
How are tip shares calculated? — choose Points or Percentages. For details and examples, see Points and Percentages With Toast Tips Manager.
How are tips divided among pool recipients? — choose Proportionally by hours worked or Equally regardless of hours worked.
Expected outcome: Your first rule appears on the tip pooling policy page with the contributor job, source, percentage, recipient job, and distribution method you specified.
Step 5: Order Your Rules and Preview the Policy
If you create more than one rule, the order matters. Tips Manager reads your policy from top to bottom and calculates as it goes — a tip that's been pooled into a recipient in an earlier rule is not available for redistribution in a later rule unless you order the rules to make it so.
To reorder rules, use the Move up and Move down buttons at the bottom of each pool. (These buttons appear only when more than one rule exists.)
For worked examples, see the Order of Operations section of Plan Your Tip Pooling Policy.
If you have sales data in Toast, validate your policy with Preview:
From the tip pooling policy page, select Preview at the top.
Review the calculated distributions against your expectations.
If anything looks wrong, return to your rule(s), adjust, and preview again.
For more on Preview, see Plan Your Tip Pooling Policy.
Expected outcome: The Preview shows tip distributions that match your policy intent for a recent date.
Step 6: Save the Policy and Start Using Tips Manager
At the top of the policy page, select Save.
After you save:
The Tip Management Report updates in real time, except for any dates you have already approved. To change a tip pool during a pay period, unapprove the affected days first (see Toast Tips Manager Reporting → Approve and unapprove tips).
Policy changes apply only to new days, shifts, and orders going forward — Tips Manager does not retroactively recompute tips for past dates after a policy change.
Important: If you adjust a policy expecting it to take effect for a date that's already passed, the change won't apply to that date. To change tip distributions for a past date, unapprove the date, edit your policy or time entries, then reapprove.
Note: First-time customers will not see Approve tips or Unapprove tips until first payroll has been run. Until then, the policy page shows Validate Settings instead.
Expected outcome: Your tip pooling policy is saved. Tips Manager begins calculating tips for new days. To approve tips and send them to payroll, see Toast Tips Manager Reporting.
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This content is for informational purposes and is not intended as legal, tax, HR, or any other professional advice. Please contact an attorney or other professional for specific advice.