Tip handling is the kind of operational detail that nobody pays attention to until the IRS audit, the angry bather, or the senior groomer who quits because they felt cheated. Get it right early.
Card tips are easy to track and easy to tax. Cash tips are easier for staff to under-report and create headaches at year-end. Push card tipping by leaving a tip line on every receipt and a tip prompt at the terminal. Don’t actively discourage cash, but don’t make it the path of least resistance either.
If a bather preps and a groomer finishes, who gets the tip? Default rule: tip is split 70/30 in favor of the groomer (the finisher), unless the client specifies otherwise. Some salons do 80/20. Some do 60/40. Pick one, document it in the employee handbook, never deviate.
Two approaches: (1) direct attribution — every tip goes to the specific groomer who served the dog. Simple, fair, but creates competition for "good clients." (2) pool model — all tips go into a daily pool and are distributed by hours worked. Builds team feel, removes incentive to favor specific clients. Either works. Don’t mix them mid-year.
The fastest way to lose a senior groomer is to let a junior bather pocket a tip the senior groomer earned.
All tips — cash and card — are taxable income for the employee and reportable wages for the employer. Card tips run through your payroll system automatically. Cash tips must be self-reported by the employee and entered into payroll. The employer is responsible for withholding on the reported amount.
Card tips: pulled from your POS export, entered as a separate pay line. Cash tips: collected weekly from each staffer on a written log, entered into payroll the same week. Don’t let cash tip reporting drift to monthly or quarterly — the math gets bad fast.
One line on your receipt: "Tips go directly to the team that cared for [pet name] today. Thank you." Most clients will tip 15–20% if you make it easy. Operators who add a tip prompt to the terminal report 25–30% increase in average tip per transaction.
Pair this with a fair scheduling system that doesn’t cluster the high-tip clients with one groomer.
Animal Friends OS handles tip splitting, pool distribution, and payroll-ready exports automatically. See payroll software.
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