Employee Tips

Hi SarahannC - 

Thank you SO much!!  I will try and let you know if I have any more questions - I greatly appreciate the thoroughness!!! So helpful!! 

Hey dg311. 

Thanks for dropping by this afternoon. I'm happy to see that my colleague was able to provide you with the help you needed. If you have any other questions, we're just a few clicks away.

Thanks again and have a nice weekend.

Quick question, Recording cash tips on the employee's paycheck will not affect my chart of accounts at all right? (well obvoiusly it will affect my tax accounts). Say an employee earns $100 in cash tips on one paycheck. I wouldn't see that $100 in any liability, expense, cash, etc account correct?

Thanks for dropping by, katesundberg. Allow me to share some information regarding recording cash tips in QuickBooks Online.

Yes, you're right. Recording cash tips through an employee's paycheck will not affect the liability or expense accounts, except for the tax account in QuickBooks Online.

Only wages, deductions, and company contributions are tracked or can be seen in the liability and expenses accounts.

You can check the following articles to know more about how tips work in QuickBooks Online. On the same links, you'll find insights where the tips can be reported as well as how it affects your taxes:

Cash tips vs paycheck tips.

About tips and paychecks.

I'll be around here in the Community if there's anything else I can help you with. Have a great rest of your day!

It it does not impact the liability accounts, then how do you decrease the tips payable account? 

Thanks for joining the thread, @smk159.

Let me help you record transactions. If it doesn't impact the liability accounts and you'll have to decrease the tips payable account, you can adjust it manually by creating a journal entry.

Before using the journal entry, I suggest consulting your accountant to which account to debit or credit to decrease the tips payable account. If you don't have one, you can check this link to find a ProAdvisor: https://proadvisor.intuit.com/app/accountant/search.

Wanted to swap the debits and credits or delete a transaction in an account entirely? You can take a look at this article: Reverse or delete a journal entry in QuickBooks Online.

If there's anything else you'd like to know about recording transactions, feel free to add a comment below. I'm always here to help you more. Have a nice day ahead.

In what general ledger account are the paycheck tips record?  How to I designate a specific account? 

I've got some insights to share about where paycheck tips are recorded in QuickBooks Online, @marge1.

QuickBooks Online Payroll automatically creates a default Payroll Expense:wages account where pay tips added to employees' paychecks are being recorded. 

I suggest running the Profit and Loss report to keep track of payroll transactions and pay tips you've added for your employees. I'll show you how:

1. Click on Reports.
2. Then search for Profit and Loss.
3. Click to open it.
4. Fill out all necessary information.
5. Under Payroll Expenses, see Wages.
6. Click on the amount and you'll see the pay tip recorded.

In case you'll want to manage your payroll accounting settings to track your payroll transactions, here's a reference you can check: Change your accounting preferences in QuickBooks Online Payroll.

Loop me in for additional payroll concerns. I'm always willing to assist further. Take care always!

How does QBO handle negative checks from cash tips?  I will first say we are using paper checks and not auto payroll. I believe an addition needs to be made to bring the check to 0 (like in desktop).  I want to ensure it is recorded and ends up on 941 reports or at least expense the shortfall myself. I do not see how I can add a liability/expense account for clearing this or what the heck should I do? i only see the option to create a deduction...???

How do you get paycheck tips to not affect the P&L.  We recently switched from cash tips to paycheck tips and it is causing them to be recorded as wage expense for the company.  

Thank you for reaching out to the QuickBooks Community, stratioti.

The default categories we can assign to paycheck tips are expense accounts only. Therefore, they will always hit on your Profit and Loss.

I understand that the use of an expense account may not always be the case for all businesses, like yours, so I recommend sending your feedback. This way, our engineers can add more options in future updates.

1. Click the Gear icon.
2. Choose Feedback.
3. Enter a sentence or two to describe your feedback and click Next.

If you need to change the categories of other pay types or deductions, this article is a good reference: Change your accounting preferences in QuickBooks Online Payroll.

Feel free to go back to this thread if you have any other questions about setups in payroll or anything about QuickBooks. Have a good one!