Key Points:
- A competitive pay scale and tipping system can boost employee retention.
- Expect to spend 28%-32% of total sales on labor costs.
- Many employees like to be paid weekly and have tips paid out at the end of the night.
What employees want you to know about pay rates and frequency
No one signs up for volunteer work at a pizzeria. Workers expect to be paid, and they expect occasional raises. For restaurant owners, how much to pay and whether to maintain a traditional tipping system are important decisions. Wages are top of mind for hourly workers, so the right pay scale and tipping system can help boost employee retention.
In a 2025 survey by restaurant tech firm Toast, 37% of respondents report that good hourly pay is their favorite aspect of the job, followed by flexible schedule, with 35%. Not surprisingly, about 59% of respondents say their main goal is to make money to pay bills and support their lifestyle. That number increased by four percentage points over 2024 and 13 points since 2023.
Low wages are an important – and obvious – driver of employee turnover. Toast also reports that pay is a top obstacle to employee satisfaction, with 33% of workers saying that poor hourly pay is a critical issue. Workers also cite lack of available shifts to work (26%) and bad tips (12%), as barriers to financial stability.
Labor Costs
Most restaurants seek to spend about 28% to 32% of total sales on labor costs. That includes wages, benefits, bonuses and payroll taxes. Knowing these amounts can help operators consider a pay scale for various positions in the pizzeria.
“Labor cost targets should be viewed as a planning framework rather than a fixed formula,” says Alice Cheng, founder and CEO of Culinary Agents, a hiring platform.
Several factors can affect how much to pay people, such as whether the restaurant offers full service, counter service or takeout and delivery only. The economy also plays a role, as market conditions and local hiring trends can affect pay.
According to the “Occupational Outlook Handbook” published by the U.S. Bureau of Labor Statistics, the median hourly wage for food and beverage serving and related workers was $14.92 in May 2024. The lowest-paid 10% of workers earned less than $10.88 per hour, and the highest 10% earned more than $19.65 hourly. (Quick review: Median refers to the wage at which half the workers earned more and half earned less.)
These numbers might seem like a starting point – or they could seem way off – as other factors such as competition and area cost of living also impact wages. Culinary Agents has an online comparison page that helps employers compare pay ranges across roles and markets. “Operators can use market-compensation benchmarks to help align wages with both business realities and local hiring conditions,” Cheng says.
In addition to competition and local economic factors, operators need to be aware of changes in local, state and federal laws regarding minimum wage, tipping and other details. The U.S. Department of Labor Wage and Hour Division offers information about tip regulations under the Fair Labor Standards Act. The site provides information about the tip credit (the amount employers can claim against minimum wage obligations), what constitutes a tip (it’s from a customer), and whether managers may keep tips given to employees (no).
Tipping Systems
Pizzeria owners need to consider various factors when developing a tipping or no-tipping system.
“There is no one-size-fits-all approach to tipping,” Cheng says. “The right model depends on the restaurant’s service style, team structure, guest expectations and local regulations.” Cheng adds that whether it’s a traditional tipping model, a service charge or higher base wages with limited or no tipping, consistency, transparency and clear communication with employees are critical to maintaining trust and supporting retention.
Denver-based Outside Pizza implemented a pooled tipping system to provide tips to all employees who work at the counter-service restaurant. “Everyone who works the shift gets a portion of the pool, depending on how much time they worked,” says Ryan Grillaert, co-owner. “If Alex works eight hours and Sam works four, Alex would receive two-thirds of the pool and Sam would receive one-third.”
Grillaert and co-owner Ashley Knotek came up with this system after working in food service and chatting with industry peers. “We felt it was the most equitable system and made the most sense for our team,” he says. “We want to take care of our team as best as we can, and because of that, we pay all of our employees above the regular non-tipped minimum wage in Denver.”
The owners of Outside Pizza have contemplated eliminating the tipping system, but “this would require systemic change that American tipping culture is not ready for quite yet,” Grillaert says.
For pizzerias that do employ servers, changes to the tip credit can be tricky. Several states and municipalities have raised the minimum wage in recent years, and the hourly wage that tipped workers earn can change, too.
Digital Payments
In addition to changes in wage and tip credit regulations, one trend that could affect a pay scale and tipping system is the rise of digital payments. Instead of distributing cash to tipped employees at the end of each shift, some operators now disburse the tips customers paid electronically in the regular payroll.
That delayed payment can cause stress for workers. “People love working table service and getting that cash tip every day,” says Tal Clark, CEO of Instant Financial, a fintech company that provides on-demand pay. “The last thing you want to do is move that to a payroll check.” Clark adds that even back-of-house employees sometimes prefer receiving pay daily.
In its “2026 State of the Hourly Restaurant Workers Report,” Instant Financial notes that 75% of workers surveyed say they are living paycheck to paycheck. This financial strain can increase, as 79% of hourly restaurant workers report they have used a payday loan, overdraft or credit card advance to pay bills – workarounds that charge significant fees.
By providing tips more frequently or paying wages more often, employers can help alleviate employees’ financial stress without raising wages. That can help operators maintain good employee relations without affecting margins.
“Leadership should be looking to support their employees,” Clark says. “If employees have access to their tips and pay, they feel they are being listened to.”
NORA CALEY is a freelance writer who covers small business, finance and lifestyle topics.
Photo by Denise Greer; design by Katie Wilson
Read the July 2026 Issue of Pizza Today Magazine
This issue of Pizza Today magazine is dedicated to the employee experience. From our cover story – “Secrets of the Best Workplaces” – to columnist Nick Bogacz’ first-person account of debuting employee programs, we cover everything from creating employee pay scales to restaurant technology that makes your staff’s lives easier. Plus: We dive into the practice of teaching dough-making, local sourcing and pesto. It’s a delicious issue from start to finish.
Check out the full Digital Edition – Pizza Today July 2026.
