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baka@mokili.ca
June 24, 2022
Question

How can I set-up Direct Tips and Declared Tips in Payroll? My business is in Quebec. All I can find in the payroll settings is Controlled Tips. Thanks in advance!

  • June 24, 2022
  • 1 reply
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A
Alex M
June 24, 2022

Hi there,

 

It's vital that all your payroll information is set up properly so that your employees are getting paid the right amount. QuickBooks Online is a great tool able to help you calculate the pay for your employees as well as help you pay it to them through cheques or direct deposit. I can provide some information about tips.

 

Within QuickBooks Online Payroll, the only option specifically programmed within the system for tips is the Controlled tips. As stated in the Pay type list, this pay type is meant for any tips that have been in the hands of the employer. If your company has at some point taken the tips to then redistribute them to all employees, this would be the option to choose to add it to payroll. If you're paying these tips separate from the paycheque using cash or another method, you could possibly use a deduction type to reduce the amount on the paycheque of the amount you're paying them using another way.

 

In order to know which deduction type you'd need to choose, or if you'd like to use another way to keep track of tips, then I recommend reaching out to your accountant. They'll be able to provide some assistance with how this pay should be taxed as well as affect your year-end forms so you can make the best choice in pay type and deductions. You can invite your accountant to your books by going to the My accountant tab. In that section, you can also find an accounting professional who has experience using QuickBooks near you by clicking on the Find a pro to help button.

 

If you have any other questions, feel free to reach out here.

B
baka@mokili.caAuthor
June 25, 2022

Unfortunately, it’s not as black and white as that. Direct tips also include tips paid with cards, so long as “the employees and not the employer decide how the tips are pooled or shared among employees.” (CRA reference link below)

 

Are you saying there is no way or workaround to add direct or declared tips in Quickbooks Payroll?

 

https://www.canada.ca/en/revenue-agency/services/tax/canada-pension-plan-cpp-employment-insurance-ei-rulings/cpp-ei-explained/tips-gratuities.html#empresp

 

Jen_D
Jen_D
June 25, 2022

Thanks for coming back to this thread, @baka@mokili.ca.

 

I'm joining in this thread to share some more insights about setting up direct tips in QuickBooks Online Payroll. For now, this pay type is not yet supported in the program. Only the controlled tips can be tracked on employee's payroll.

 

For now, you can add other earnings in the employee's profile but it might be reported differently on payroll forms. See this:

 

See this article to learn more about the supported pay types in QBO Payroll: Understand supported pay types and deductions in QuickBooks Online Payroll.
 

You can also contact our payroll support for other suggestions about this limitation. To get in touch with our reps, use this link: Contact Payroll Support.
 

Please come back here if you need further help with setting up your payroll data in QuickBooks Online.

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