Differences Between Sales-Based Rules and Tip-Based Rules
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). Instead of tipping out a percentage of tips, sales-based rules 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.
For example, you might have a tip-based rule that tells the Servers to give out 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. With this setup, the Server will walk away with $90 in tips.
Let's assume that instead of a 10% tip-based rule, we have a 10% sales-based rule. Assuming that the $100 tip was for a single order and that the order consisted of $50 worth of sales. 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.
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.
Scenario:
The following rule distributes 5% of drink sales from servers to bartenders:
If a server makes a $1500 sale with no drink items and receives a $100 tip:
Under the tip-based rule, the bartender would receive a percentage from the tip.
Under the Sales-based rule, the bartender would not receive a tip-out since the sale did not contain any drink items.
If a server makes a $1500 worth of drink items sale and receives a $100 tip:
Under the tip-based rule, the bartender would still receive a percentage from the tip.
Under the Sales-based rule, the bartender would receive 5% of the $1500, but the server would tip out from the tips received. Therefore, 5% of $1500 is $75 will go to the bartender, leaving the server with $25 out of the original $100 tip.
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!