Skip The Cash: How Restaurants Are Moving To Digital Tip Disbursements


Not many people appreciate just how massive the American restaurant industry truly is. 

It is the third largest employer in the US, behind public schools and local governments, employing more than 15 million people nationwide. Although the pandemic has made a significant impact on the industry, this is a sector that is still expected to generate close to a trillion dollars in sales by the end of 2020. 


The industry has pivoted, adjusted and adapted to the dramatic changes wrought by the impact. It's a wonder then that some businesses still pay their employee tips in cash. 

Tipping is ancient; the practice of tipping began in Tudor England, where by the 17th century, it was expected that overnight guests to private homes would provide sums of money, known as vails, to the host's servants. Soon afterwards, customers began tipping in London coffeehouses and other commercial establishments. 

A 17th-century coffee house in England

As restaurants shift towards contact-less payment, digital tip disbursements is emerging as a popular solution to pay employee tips at shift-end, instead of payday.

In the US, an increasing number of restaurant patrons are tipping with their credit or debit cards. This poses a particularly tough challenge for restaurants accounting-wise because employees who make up to 60% of their salaries in tips need timely access to their earnings. In some cases, we’ve seen restaurant managers go to the ATM before closing time to withdraw cash so they can pay out tips after closing. 

The pandemic has particularly affected this process because almost every patron now pays with a credit card to ensure a touch-less experience. For restaurants that traditionally paid out tips in cash, running out to the bank and back with a bag of cash is a source of significant risk, both in terms of getting robbed, or in terms of handing out bills that could be contaminated. 

One solution to this problem is digital tip disbursement tools. Here’s how it works:

  1. At the end of the shift, the manager tallies up the tips and calculates how much is paid out to employees
  2. The funds are loaded into the employee’s pay card (this can be either a virtual card or a physical card issued to employees) using a tool like Plate IQ’s Spend Management platform
  3. The employees could use this to pay for their expenses like any other prepaid card, or transfer the funds to their bank account


The benefits of this approach are significant, for both employees and employers

For employers, the benefits are:
  • Not having to have significant physical cash on-premise
  • Being able to disburse tips easily and efficiently at the end of every shift
  • Easily calculating and paying out tips, down to the nickel
  • Easily track what is paid as wages vs tips for IRS reporting
For employees, the benefits are even better:
  • Instant access to tips; not having to wait for days until funds are available in their bank account
  • Not having to walk home with cash tips 
  • vCards or physical cards can be used to pay for purchases and expenses, especially if employees are unbanked
  • Easy to track income for IRS reporting purposes

Try Plate IQ’s Spend Management Platform to Disburse Tips Easily


Plate IQ’s Digital Tip Disbursement solution is an ideal vehicle to pay out tips and reimbursements to your employees instantly. It's available as part of Plate IQ’s Spend Management Platform.  

Here’s how it works:

  1. Create virtual or physical cards that you can issue to your employees
  2. At the end of every shift, calculate tips and reimbursements from your POS system and sync with Plate IQ
  3. Load the funds on to your employee’s virtual or physical cards instantly
  4. Employees can access their funds immediately by using it for purchases or by transferring funds to their bank accounts

Plate IQ’s virtual and physical cards come with tons of flexible options like:

  • Unlimited virtual card creation (both single and multiple uses)
  • Set flexible dollar limits on each card, up to the nightly tip payout
  • Physical cards that can be issued to each employee and loaded with funds 
  • Options to show your appreciation to your employees with virtual gift cards
  • Complete employee privacy - card transactions are not visible to employers
  • Option to transfer card funds into a bank account

Learn more about Plate IQ's Digital Tip Disbursement

Skip The Cash: How Restaurants Are Moving To Digital Tip Disbursements


Not many people appreciate just how massive the American restaurant industry truly is. 

It is the third largest employer in the US, behind public schools and local governments, employing more than 15 million people nationwide. Although the pandemic has made a significant impact on the industry, this is a sector that is still expected to generate close to a trillion dollars in sales by the end of 2020. 


The industry has pivoted, adjusted and adapted to the dramatic changes wrought by the impact. It's a wonder then that some businesses still pay their employee tips in cash. 

Tipping is ancient; the practice of tipping began in Tudor England, where by the 17th century, it was expected that overnight guests to private homes would provide sums of money, known as vails, to the host's servants. Soon afterwards, customers began tipping in London coffeehouses and other commercial establishments. 

A 17th-century coffee house in England

As restaurants shift towards contact-less payment, digital tip disbursements is emerging as a popular solution to pay employee tips at shift-end, instead of payday.

In the US, an increasing number of restaurant patrons are tipping with their credit or debit cards. This poses a particularly tough challenge for restaurants accounting-wise because employees who make up to 60% of their salaries in tips need timely access to their earnings. In some cases, we’ve seen restaurant managers go to the ATM before closing time to withdraw cash so they can pay out tips after closing. 

The pandemic has particularly affected this process because almost every patron now pays with a credit card to ensure a touch-less experience. For restaurants that traditionally paid out tips in cash, running out to the bank and back with a bag of cash is a source of significant risk, both in terms of getting robbed, or in terms of handing out bills that could be contaminated. 

One solution to this problem is digital tip disbursement tools. Here’s how it works:

  1. At the end of the shift, the manager tallies up the tips and calculates how much is paid out to employees
  2. The funds are loaded into the employee’s pay card (this can be either a virtual card or a physical card issued to employees) using a tool like Plate IQ’s Spend Management platform
  3. The employees could use this to pay for their expenses like any other prepaid card, or transfer the funds to their bank account


The benefits of this approach are significant, for both employees and employers

For employers, the benefits are:
  • Not having to have significant physical cash on-premise
  • Being able to disburse tips easily and efficiently at the end of every shift
  • Easily calculating and paying out tips, down to the nickel
  • Easily track what is paid as wages vs tips for IRS reporting
For employees, the benefits are even better:
  • Instant access to tips; not having to wait for days until funds are available in their bank account
  • Not having to walk home with cash tips 
  • vCards or physical cards can be used to pay for purchases and expenses, especially if employees are unbanked
  • Easy to track income for IRS reporting purposes

Try Plate IQ’s Spend Management Platform to Disburse Tips Easily


Plate IQ’s Digital Tip Disbursement solution is an ideal vehicle to pay out tips and reimbursements to your employees instantly. It's available as part of Plate IQ’s Spend Management Platform.  

Here’s how it works:

  1. Create virtual or physical cards that you can issue to your employees
  2. At the end of every shift, calculate tips and reimbursements from your POS system and sync with Plate IQ
  3. Load the funds on to your employee’s virtual or physical cards instantly
  4. Employees can access their funds immediately by using it for purchases or by transferring funds to their bank accounts

Plate IQ’s virtual and physical cards come with tons of flexible options like:

  • Unlimited virtual card creation (both single and multiple uses)
  • Set flexible dollar limits on each card, up to the nightly tip payout
  • Physical cards that can be issued to each employee and loaded with funds 
  • Options to show your appreciation to your employees with virtual gift cards
  • Complete employee privacy - card transactions are not visible to employers
  • Option to transfer card funds into a bank account

Learn more about Plate IQ's Digital Tip Disbursement


Not many people appreciate just how massive the American restaurant industry truly is. 

It is the third largest employer in the US, behind public schools and local governments, employing more than 15 million people nationwide. Although the pandemic has made a significant impact on the industry, this is a sector that is still expected to generate close to a trillion dollars in sales by the end of 2020. 


The industry has pivoted, adjusted and adapted to the dramatic changes wrought by the impact. It's a wonder then that some businesses still pay their employee tips in cash. 

Tipping is ancient; the practice of tipping began in Tudor England, where by the 17th century, it was expected that overnight guests to private homes would provide sums of money, known as vails, to the host's servants. Soon afterwards, customers began tipping in London coffeehouses and other commercial establishments. 

A 17th-century coffee house in England

As restaurants shift towards contact-less payment, digital tip disbursements is emerging as a popular solution to pay employee tips at shift-end, instead of payday.

In the US, an increasing number of restaurant patrons are tipping with their credit or debit cards. This poses a particularly tough challenge for restaurants accounting-wise because employees who make up to 60% of their salaries in tips need timely access to their earnings. In some cases, we’ve seen restaurant managers go to the ATM before closing time to withdraw cash so they can pay out tips after closing. 

The pandemic has particularly affected this process because almost every patron now pays with a credit card to ensure a touch-less experience. For restaurants that traditionally paid out tips in cash, running out to the bank and back with a bag of cash is a source of significant risk, both in terms of getting robbed, or in terms of handing out bills that could be contaminated. 

One solution to this problem is digital tip disbursement tools. Here’s how it works:

  1. At the end of the shift, the manager tallies up the tips and calculates how much is paid out to employees
  2. The funds are loaded into the employee’s pay card (this can be either a virtual card or a physical card issued to employees) using a tool like Plate IQ’s Spend Management platform
  3. The employees could use this to pay for their expenses like any other prepaid card, or transfer the funds to their bank account


The benefits of this approach are significant, for both employees and employers

For employers, the benefits are:
  • Not having to have significant physical cash on-premise
  • Being able to disburse tips easily and efficiently at the end of every shift
  • Easily calculating and paying out tips, down to the nickel
  • Easily track what is paid as wages vs tips for IRS reporting
For employees, the benefits are even better:
  • Instant access to tips; not having to wait for days until funds are available in their bank account
  • Not having to walk home with cash tips 
  • vCards or physical cards can be used to pay for purchases and expenses, especially if employees are unbanked
  • Easy to track income for IRS reporting purposes

Try Plate IQ’s Spend Management Platform to Disburse Tips Easily


Plate IQ’s Digital Tip Disbursement solution is an ideal vehicle to pay out tips and reimbursements to your employees instantly. It's available as part of Plate IQ’s Spend Management Platform.  

Here’s how it works:

  1. Create virtual or physical cards that you can issue to your employees
  2. At the end of every shift, calculate tips and reimbursements from your POS system and sync with Plate IQ
  3. Load the funds on to your employee’s virtual or physical cards instantly
  4. Employees can access their funds immediately by using it for purchases or by transferring funds to their bank accounts

Plate IQ’s virtual and physical cards come with tons of flexible options like:

  • Unlimited virtual card creation (both single and multiple uses)
  • Set flexible dollar limits on each card, up to the nightly tip payout
  • Physical cards that can be issued to each employee and loaded with funds 
  • Options to show your appreciation to your employees with virtual gift cards
  • Complete employee privacy - card transactions are not visible to employers
  • Option to transfer card funds into a bank account

Learn more about Plate IQ's Digital Tip Disbursement

Hari Viswanathan

is a product marketing manager at Plate IQ where he helps customers get the most out of AP automation

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