The formula for hourly earnings with tips
Hourly earnings = (base wage × hours + cash tips + card tips − tip-out) ÷ hours.
The calculation uses dollars for wages and tips, and decimal hours for time. Six hours and 30 minutes is 6.5 hours; six hours and 15 minutes is 6.25. Enter each tip once, even if it is paid through payroll later.
Worked example: a six-hour serving shift
| Item | Amount |
|---|---|
| Base wages: $5 × 6 hours | $30 |
| Cash tips | $60 |
| Card tips | $150 |
| Tip-out paid | −$30 |
| Total before tax | $210 |
| Hourly earnings: $210 ÷ 6 | $35/hour |
Why working time changes the comparison
If that shift also includes one extra paid hour of sidework at the same $5 base rate, wages become $35 and total earnings become $215. Across seven hours, that is $30.71/hour. Comparing the full shift helps you make a fairer comparison between a busy close and a shorter lunch.
Tips kept, earnings, and cash in your pocket
In the six-hour example, tips after tip-out are $180. Total earnings including wages are $210. Neither number necessarily equals the money in your pocket at close: payment timing and payroll deductions matter. This tool does not estimate taxes, overtime premiums, or whether your employer has met minimum-wage obligations.
Track the shifts you want to compare
Use the free tip log template for a daily record, or save shifts in TipScan to see totals over time. For multiple coworkers, calculate each payout with the tip-out calculator first.