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ephrataeagles333
November 5, 2024
Question

Report Tips to quickbooks

  • November 5, 2024
  • 2 replies
  • 0 views
Hello, I do payroll for a private club. This includes a bar/food. Our bartenders were fully volunteer previously but are now paid and receiving tips. These come from credit card and  cash. They take their tips home every night when closing their tills. I went to enter the tips that they have collected and it seems to only allow me to place it on their paychecks causing us to write and spend more.. Is there a way to just report what they made without it being calculated that is due or needs to be paid on their paychecks like the calculated Hours?

2 replies

K
Kevin_C
November 5, 2024

Yes, there are some ways, ephrataeagles. I’d be glad to discuss them in detail below to ensure you can properly record tips in QuickBooks Online (QBO).

 

You are correct that you can add the cash tips to their payroll run. Then, simply create a deduction item to offset the amount so that your employees won't be paid for the cash tips again. Here’s how:

 

  1. Go to Payroll, then Employees.
  2. Select your employee and click Start or Edit from Deductions & contributions.
  3. From the Deduction/contribution ▼ dropdown, tap + Add deduction/contribution.
  4. From the Deduction/contribution type, select Other Deduction.
  5. From Type, select Other after tax deductions.
  6. Add a Description name that appears on paychecks. 
  7. Select how your deduction is calculated and enter the temporary tip amount. 
  8. Choose Save, then Done.

 

After that, edit the Cash Tips and Deduction item amount by selecting Edit Paycheck from the three vertical dots to offset them.

 

Alternatively, you can utilize the Bonus Pay type instead of Cash Tips in scheduled payroll. This way, you can record the tips and add the same amount in the Deduction section, ensuring that the entry is recorded without the employees being paid again.

 

For more details about this process, see this article: Pay and report tips.

 

Additionally, you can visit this article to provide a detailed breakdown of your employees' wages, deductions, and tax information for a specific period: Run payroll reports.

 

I'm always available to share appropriate information if you have further inquiries about recording tips in QBO. Notify me by clicking the Reply button below or post in our forum again.

BigRedConsulting
BigRedConsulting
November 5, 2024

It sounds like you won't want to pay employer taxes on the tips income? But you have to. Tips are a form of income and as such are fully taxed.

 

If you mean that the paychecks increase by the tips amount - even though the employee already has the tips - then you probably need to also use the tips out item, which is a net deduction.

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