How to calculate your hourly wage with tips

The formula, line by line

Three lines, always in this order. Tillside runs exactly these behind every number in the app.

• Net tips = cash tips + card tips − tip-out
• Total earnings = net tips + (hourly wage × hours)
• Effective hourly rate = total earnings ÷ hours

Worked examples

A US dinner shift. Wage $5.00, 6 hours, $86 cash, $112.50 card, tip-out $5.96. Net tips $192.54. Wage earnings $30.00. Total $222.54, which is $37.09 an hour.

A UK bar shift. Wage £12.21, 8 hours, £30 cash, £45 card through the tronc, no tip-out. Net tips £75. Wage earnings £97.68. Total £172.68, which is £21.59 an hour.

A long double. Wage $5.00, 11 hours, $240 tips, $36 tip-out. Net tips $204. Wage $55. Total $259, which is $23.55 an hour. It was the biggest night of the week in dollars and the worst per hour, which is the point of doing the division.

Three mistakes that inflate the number

• Using gross tips. Forgetting tip-out overstates your tips by whatever you pay out, commonly 10% to 25% of tips at US restaurants that pool.
• Using scheduled hours. You were on the floor from 4:30 until 11:40, not 5 until 11. Use the clock, not the rota.
• Averaging rates instead of totals. A $40/hr four-hour shift and a $20/hr eight-hour shift do not average to $30/hr. Add the earnings (160 + 160) and divide by the hours (12): $26.67. Tillside's week card does it this way, weighting by hours, so the weekly rate matches the rows beneath it.

Why the rate matters more than the total

The total tells you which night was biggest. The rate tells you which night was worth working, which is the question that decides whether to pick up Thursdays or trade them away. Once you have a few weeks of data, sorting by rate usually shows one shift type that quietly pays 30% less per hour than the rest.

Tillside prints the rate in three places: on the save confirmation as soon as you log the shift, on every row in the list, and on the week-to-date card at the top of the Shifts screen. All three come from the same calculation, so they agree.

A note on tipped minimum wage

In the US, employers using a tip credit must ensure your wage plus tips reaches at least the full minimum wage over each workweek, and must make up any shortfall. Your own record of hours and net tips is the only way to check that they did. Rules differ by state; the Department of Labor's FLSA pages describe the federal baseline.