How do Sales-Based Rules Work?
Tip-based rules take a percentage of tips from tip-generating job codes and then send them to employees clocked in under different Job Code(s).
For example, you might have a rule that tells the Servers to give up 10% of tips to Food Runners. If an individual Server makes $100 in tips, then that Server would send $10 to be split up among the Food Runners based on their minutes worked.
Sales-based rules work like tip-based rules in most ways, but instead of tipping out a percentage of tips, they tip out a percentage of net sales(the subtotal minus any taxes, voids, discounts or other comps).
There are many factors to consider when choosing to use sales-based rules over tip-based rules. One consideration is that, under sales-based rules, tip earners are not “punished” for earning more tips with sales-based rules.
Take the example above, and assume that the $100 tip was for a single order and assume that the order consisted of $50 worth of sales. That's a great tip! Under the tip-based rule described above, the server would give $10 to be split among the Food Runners and the Server would take home $90.
Let's take a look at how this scenario would play out under a sales-based rule. For easy comparison, let's assume that instead of a 10% tip-based rule, we have a 10% sales-based rule. Tiphaus will calculate 10% of $50 (the Server's sales), which comes out to $5. After giving that $5 to be split among the Food Runners, the Server will walk away with $95 in tips.
The counterpoint to using sales-based rules is that if a table does not tip out at all, the server will be going into the negative (assuming they have no other tips for the day). The number of non-tipping tables should be considered when deciding what to set your sales-based rules. Some locations have higher amounts of non-tipping tables than others.
Going deeper, sales-based rules are also good for creating a strong relationship between workload and tip distribution. For example, it is common for Servers to only tip out the Bartenders on drink sales, and only tip out the BOH on food sales. By attaching Sales Item Categories to your rules, you can make sure that your Bartenders are tipped out for the items that they prepare, and your BOH is tipped out for the food items that they prepare.
Using tip-based rules and sales-based rules TipHaus can create a custom tip solution to fit any role. Mix and match to find a solution that works for you!