How to work out your real hourly rate as a server
If you work for tips, the hourly wage on your paycheck doesn't tell you much about what you earn. Your real hourly rate does. It's everything you took home from a shift divided by the hours you worked.
Once you know it, you can compare a Tuesday lunch with a Saturday dinner, or one job with another, and decide where your hours are best spent.
The formula
Real hourly rate = (tips you kept + wages) ÷ hours worked
To get the tips you kept:
- Add your cash tips and card tips.
- Subtract tip-out, the amount you gave to bussers, bartenders, food runners or the kitchen.
- Add tip-in, anything you received from a tip pool or from other staff.
Wages are your hourly wage multiplied by the hours you worked. If you're paid a lower tipped wage, use that.
Example
A five-and-a-half-hour dinner shift:
| Item | Amount |
|---|---|
| Cash tips | $64.00 |
| Card tips | $112.00 |
| Tip-out to the bar and bussers | −$18.00 |
| Wage: 5.5 hours × $5.50 | $30.25 |
| Take home | $188.25 |
$188.25 divided by 5.5 hours is about $34.23 an hour.
Working it out for a week or a month
Add up the take home for all your shifts, add up all the hours, then divide the first total by the second. Don't average the hourly rates of individual shifts. If you worked two hours at $40 an hour and eight hours at $20 an hour, you earned $240 in ten hours, which is $24 an hour, not $30.
Leave out any shift where you didn't record the hours. Otherwise its tips get divided by the hours of your other shifts and your rate comes out too high.
Ways to use the number
- Compare lunch and dinner shifts, weekdays and weekends, or different sections.
- If you have two jobs, compare their hourly rates before taking extra shifts.
- Multiply your recent hourly rate by next month's scheduled hours to estimate next month's income.
Writing your tips down after every shift also gives you a record of your income. Tipped workers are usually expected to keep one, so check with a tax professional about what applies to you.
Doing it in Tipling
In Tipling you enter cash and card tips, tip-out and hours when you finish a shift. The app shows that shift's take home and hourly rate, and the same figures for the week, the month and each job. Shifts without hours aren't included in the hourly rate.