What is your protocol for paying out tips?

[bhindthechair]

Ours doesn't seem to be working efficiently. Often there are tips missing. We are looking for a new protocol to pay out tips to employees either at the end of their shift or after each client.
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[AmeliaR]

If the client wants to tip they give the employee the money and they they keep it, it's there tip they should keep what they are given

 

[MissyMuffin]

Formal tipping arrangements used to be (May still be?) taxable. The company I used to work for paid hmrc on behalf of employees.
Personally, if I tip a therapist I'd like her to have it, not be shared. If it had to be shared I wouldn't tip, I'd buy a gift at Xmas etc.

 

[virtues2011]

I hope no one from the HMRC is reading this thread as they'll be giving you more tips than you'd like! Lol

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[AmberExt]

Is the op american? Tipping is different there isnt it?

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[Jen889]

Is the op american? Tipping is different there isnt it?

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Might be as the Location is MN and that's an abbreviation for Minnosota, US

 

[bhindthechair]

Some clients give the tip directly before they even go to the desk to check out. Others add to the credit card, others get cash back and ask for it to be given to the stylist. Those tips, that aren't given directly to us by the client, get put in individual mini envelopes and each envelope gets put in a bin by the register. Reception writes the stylist and the client name on each envelope during each transaction. The stylist sifts through the bin whenever they want, to get their envelopes. I often am missing an envelope. Reception looks up the transaction and sees their was a tip for the missing one. Sometimes the drawer is off and it's obvious they forgot to pull money out but other times the drawer is fine. So where is my tip? We need a better system in place. Please help me with suggestions to pass along to management. Thank you!

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[Jen889]

Some clients give the tip directly before they even go to the desk to check out. Others add to the credit card, others get cash back and ask for it to be given to the stylist. Those tips, that aren't given directly to us by the client, get put in individual mini envelopes and each envelope gets put in a bin by the register. Reception writes the stylist and the client name on each envelope during each transaction. The stylist sifts through the bin whenever they want, to get their envelopes. I often am missing an envelope. Reception looks up the transaction and sees their was a tip for the missing one. Sometimes the drawer is off and it's obvious they forgot to pull money out but other times the drawer is fine. So where is my tip? We need a better system in place. Please help me with suggestions to pass along to management. Thank you!

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When I worked in a salon, we would write the tip amount in our book next to the clients name. At the end of the day we would add the numbers up and the manager/boss would cash us out. No lost tips and no stealing envelopes

 

[AmeliaR]

I just had a little piggy bank in the back room and when a client gives me a tip I put it in my piggy bank. If the receptionist takes payment surely she can just pop into the back and put it in the stylists money box. To not confuse things I was say tips can only be given in cash.
Do you actually do clients or are you the salon owner?

 

[Carolin]

We have to declare tips given to tax office and pay tax on it.

 

[Robin Abbi]

Generally speaking, tips are always subject to income tax.
However, it is possible to structure a tips/gratuities system so that there is no liability to national insurance.
There is lots of guidance [click here] on the HMRC website, or you could ask your accountant. A good accountant should be able to design a system that is easy to operate and tax efficient.

Best,

Robin