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Tonya S
February 27, 2023
Question

Full service restaurant - credit card tips

  • February 27, 2023
  • 1 reply
  • 0 views

I have a client who runs a full service restaurant- prior to the pandemic, he was paying his servers cash for the tips they earn daily from credit card transactions.  Now there is not enough cash to do this , he is paying them by writting each a check.  My question is how do you book these payments if tips are not considered a business expense to the owner and the employees will not wait for 2 weeks to get it on their paychecks? They include it with cash tips received for payroll purposes.   

1 reply

Candice C
Candice C
February 27, 2023

Good evening, @tonya11_2 S. 

 

Congrats on making your first post here in the Community. Allow me to give you some insight into booking these payments with tips that aren't considered a business expense to the owner. 

 

Since it's not going to be a part of the employees' regular/scheduled payroll, I suggest performing an unscheduled payroll just for the tips and record it as a paper check. 

 

However, consult with your accountant to be sure this is the route for your business needs to take. They'll be able to give you the best advice based on how you run the business. 

 

Also, as a future reference, here's a guide that provides more details about paying and reporting tips. 

 

I hope this helps and gets you squared away. If you run into any trouble, don't hesitate to come back. Have a great day! 

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