thread Re: How are pooled tips calculated for a tip eligible salaried employee? in Payments Troubleshooting

How are pooled tips calculated for a tip eligible salaried employee?

BBGDearborn — Sat, 20 Sep 2025 08:46:35 GMT

We're moving our manager to a salaried role. However, there are times when she will step in and support the counter. For that reason, she needs to be tip eligible. We've configured her as salaried, checked "tip eligible," but it appears she still needs to clock in when she's on the counter providing support. Is that correct?

Re: How are pooled tips calculated for a tip eligible salaried employee?

TheRealChipA — Wed, 06 Sep 2023 14:38:37 GMT

Hi @BBGDearborn. If you have a manager who is in the tip pool sometimes, you’ll need to create a second role for her to clock in as when she is acting as a tipped employee. That way only those hours will be added to the pool and used to prorate it out.

Having said that, you might want to check your state’s labor laws before you do this. In my state (Kentucky) managers and supervisors are never, ever allowed to be part of tip pools because their main job is not as a tipped employee. We’ve had a few high profile cases lately where hefty fines were handed down to companies whose managers/supervisors had their “hands in the tip jar,” as it were. Here, at least, employees can either be tip-eligible or not-tip-eligible, but not both within the same company.

Re: How are pooled tips calculated for a tip eligible salaried employee?

TheRealChipA — Wed, 06 Sep 2023 14:45:46 GMT

@BBGDearbornIf you decide it is ok for you to do this in your state, let me clarify. If you only have one job in Square that is tip eligible, then all of her hours will be used to prorate the tip pool. The only way to have only some hours included in the pool is for her to clock out as a manager salaried employee, and clock in as the “tip eligible” salaried employee. That way she isn’t getting more than her fair share.

Both jobs can be salaried, and defined the same way as far as pay goes. But only one will be tip eligible. That way she doesn’t get tips for 40 hours when she was helping the counter for only 8.

I hope that makes sense.

Re: How are pooled tips calculated for a tip eligible salaried employee?

TheRealChipA — Wed, 06 Sep 2023 15:04:00 GMT