You'll have to know what type of tips your employees received to determine whether they should be included in your paycheck. I'm here to guide you through this process in QuickBooks, Joyce.
You are required to track and withhold taxes from tips received. However, tips aren't subject to federal taxes if the total amount received is less than $20 per month.
To set this up on the paycheck, set up a payroll item for tips in QuickBooks. To do so, follow the steps outlined below:
- Go to Payroll, then Employees.
- Select your employee.
- From Personal Info, select Edit.
- In Additional pay types, select Cash Tips or Paycheck Tips.
- Click Save.
Cash tips are gratuities that employees receive directly from customers in cash rather than through their paycheck. Tips given through credit card charges converted to cash are also considered Cash tips.
For more insights on the various types of tips that employees receive, read this article for more details: Pay and Report Tips.
Furthermore, you may want to view the payroll totals of your employees, including taxes and contributions, and run the Payroll Summary report to get the most accurate data. I've added this article for reference: Create a Payroll Summary Report in QuickBooks.
On top of that, consider exploring QuickBooks Payroll for all your payroll processing, time tracking, and direct deposit needs.
Please reply below if you have any other questions or concerns with tips or anything about payroll deductions. I'm always right here to assist.
