QBO "TIPS" report

Hi Sheanmei,

Welcome to the Canadian QuickBooks Community! I took a peek at your profile, and it looks like you could be looking for help with QuickBooks Online US. I also know, however, that some people manage different businesses in different areas, so just in case you're using the Canadian version of the software, I wanted to make sure you have an answer for how QBO Canada handles tips.

QBO Canada handles tips differently than the US version of the program. While the US has a Tips feature that you can turn on in the settings, Canada has a few different ways you can record tips. You can either use the steps in the Share tips with your team article or you can turn on the Controlled Tips pay type in Payroll. When you turn on Controlled Tips, the program creates a payroll expense account in the chart of accounts to accommodate those tip amounts.

If you're using the option via QuickBooks Online Payroll, then when you enter an amount into the Controlled Tips field during the pay run, that means you've already paid the employee the amount they were owed and you don't have to worry about paying them again. To get a sense of those tip amounts afterward, you can consider something like the Payroll Details report to see the breakdown of the amounts given to each employee.

Since you have an Undistributed Tip liability account, it sounds like you may be using the method in the Share tips with your team article. In that case, it'd mean that you created an item in the Products and Services section of QuickBooks Online to add to customer transactions to track tips. The article suggests that you could use Class Tracking to set the employees up as a class and assign their names to the transactions or the tip lines, in which case you could run a report to see what amounts were allocated to whom.

You could use the Sales by Class Detail report or another report that shows you class tracking to see the transactions sorted by class. You could try running the report for your liability account from the chart of accounts to see if that offers the customization option to add a column for class tracking as well.

I've got a helpful article here that goes over the different reports in QuickBooks Online that you can review to learn which report might be beneficial for you: What are the differences in report features among QuickBooks Online subscriptions?

In the event you are looking for help with QBO US, I recommend you head on over to the US QuickBooks Community to pose this question again since, as I mentioned, that version of the program handles tips differently. You can select the flag at the top of the Community page to change which regional forum you're posting to or you can click this direct link: QuickBooks Community US

I hope that helps! Take care. :)