emloyee tips

Hello, @rudgo.

Thanks for reaching out to the Community. I'll be happy to help you get your payroll setup to properly add cash tips.

Choose from the steps below depending on how your employees received their tips:

Create a payroll item for taxable tip amount

Use this payroll item to report all the tips the employee received.

1. In QuickBooks Desktop, select Lists > Payroll Item List.
2. Select Payroll Item > New.
3. Choose Custom Set Up and select Next.
4. Choose Addition and select Next.
5. Name the item (for example, Tips In) and select Next.
6. Choose the Expense account and select Next.
7. In the Tax tracking type window, choose Reported Tips. Select Next > Next.
8. In the Calculate based on quantity window, choose Neither and select Next.
9. In the Limit Type window, select Finish.

Create a payroll item for tips retained by the employee

Use this payroll item to take away the tips that the employee physically received.

1. In QuickBooks Desktop, select Lists > Payroll Item List.
2. Select Payroll Item > New.
3. Choose Custom Set Up and select Next.
4. Choose Deduction and select Next.
5. Name the item (for example, Tips Out) and select Next.
6. Choose the Liability Account and select Next.
   Note: You must choose the same account as the one entered in the Expense Account field of the addition payroll item for taxable tips).
7. In the Tax tracking type window, choose None. Select Next > Next.
8. In the Calculate based on quantity window, choose Neither and select Next.
9. Choose Net Pay and select Next.
10. In the Limit Type window, select Finish.

After you set up these items, you can add them to the employee paychecks under Other Payroll Items. Enter the amount for each item in the Rate column.

For more information on recording tips, click here.

Please remember, I'm always here for any other questions or concerns.

@SterlingD

Please learn from this input. This is exactly what they Cannot do for Tips, since tips Vary: "After you set up these items, you can add them to the employee paychecks under Other Payroll Items. Enter the amount for each item in the Rate column."

@rudgo

In Run Payroll (Pay Employees), the First screen, where you checkmark Who is being paid, you can customize the columns here, or single click each name to open their Paycheck Details View. That's where you input Values, such as Tips.

Please see my attachment.

I have followed your steps exactly.  Unfortunately it is not taking the tax out when I enter the tip amount.  Under Other Payroll Item I am selecting Tips In entering the amount in the Rate column but the taxes do not adjust.  What am I missing?

I have followed the directions exactly and when I enter the tip amount, no tax is taken out.  What am I missing?

Hi, Denver1855.

Thanks for following up on this thread and for trying the steps listed above.

Since the taxes aren't being taken out, I recommend contacting a member of our Support Team. An agent will be able to initiate a screen-share to work alongside you and view your screen to determine what's causing this issue. Here's how to contact a member of the team:

1. Click the Help button in the top right corner.

2. Select Contact Us.

3. Enter Support in the field and choose Let's talk.

4. From here you can select to receive a callback at a time that's convenient for you.

Feel free to reach back out here if you have any other questions. I'll be here to help out in any way that I can.