How can I add tips to payroll

Hey there, @rooseveltbarbers.

Thanks for reaching out. 

Great news, you can add tips to employee's checks with QuickBooks Online. 

Here's how:

1. Click the +New. 
2. Under the vendor's column, hit Check. 
3. In the payee columns, select the employee who you're paying the tip to. 
4. From the Bank Account drop-down, choose the account from where you are making the liability payment.
5. Under Category, hit Undistributed Tips. Enter the tip amount in the Amount column. 
6. Then fill out the rest of the Check as usual and click Save and Close. 

For more details, check out: Share tips with your team.

Feel free to reply to this thread should you have more questions or concerns. Take care and have a great week. 

How do I add tips to paycheck, so that it deducts taxes?  My employees prefer to be taxed on their paycheck for tips and not receive a separate check.

I'll help you add tips to your employee's paycheck, @daniwildterra.

Let simply follow these steps:

1. Go to the Payroll menu and select Employees.
2. Click the name of the employee.
3. In the Employee details section, select the Pay pencil icon.
4. Go to the How much do you pay [employee]? section. Then, select Addition pay types.
5. Look for the Paycheck Tips and check its box.
6. Select Done.

Once done, you can now enter the amount in the PAYCHECK TIPS column when creating a paycheck. Please check the screenshot below as your reference.

In addition, you can run the Payroll Summary by Employee report in QuickBooks Online Payroll. This will show the comprehensive report of wages, deductions, and tax info, totaled by employee or period. Just go to Reports and look for Payroll Summary by Employee report.

Don't hesitate to tag my name in the comment section below if you have other concerns or questions. I'm always ready to help.

This is getting closer, these two methods, however, never connect to each other.  How do I take tip amounts that are already recorded as a liability and connect them to the tips I pay through Payroll?

Hello there, huggablemug/

Thanks for following the thread. I'm happy to provide some information about handling tips in QuickBooks Online Payroll. 

First, you'll need to figure out what type of tips you're going to record in QuickBooks. Rather you gave your employee tips directly through cash or if you've added them to your employee's paycheck. If it's cash, this would be considered a Cash tip. If it's added to a paycheck, this would be a Paycheck tip. 

In the previous agent provided by Tori, that method was for adding tips only while ReymondO is for paychecks, that's why you add pay type as paycheck tips to withhold the taxes. If you want to withhold the taxes disregard the 1st method and go for the 2nd one. If you want to connect to a tips liability account via payroll. Here's how: 

1. Go to Account and Settings. 
2. Select Advanced. 
3. Choose Chart of Accounts, and then tips account to Undistributed tips(other current liabilities).
4. Hit Save and Done. 

To help determine what type of type you've provided to your employee, check out this article: 

•  Cash tips Vs. Paycheck tips. 
• About tips and paychecks.

Please let me know if you have any additional questions or concerns in the comment below. I'm more than willing to help. Have a great day!

Tips are usually "in and an out" on a typical payroll summary, but with cash tips on here, it is added to gross wages but not deducted back out. How do I solve this?

Hello there, @jmpugliese.

Thank you for reaching out to us here in the Community. I can share some information that will help you with tracking tips in QuickBooks Online.

This type of tip is given to an employee directly, not through a paycheck. Cash tips appear on the pay stub but are not part of the gross or net of your payroll.

You can use the Cash Tips pay type to add the information when running payroll. You'll need to make changes to the employee's profile and include the specific item.

Here's how:

1. On the left navigation bar, click Payroll.
2. Go to the Employees tab.
3. Select the employee name.
4. Press the Pencil icon next to Pay. 
5. Go to section 4, then click Add additional pay types.
6. Choose Cash Tips below Common pay types. 
7. Make the necessary changes.
8. Hit Save.

Additionally, I recommend visiting the following article to learn more about tips and how to handle special situations for tips in QuickBooks: About tips and paychecks.

Please remember I'm just a post away if you need more assistance solving payroll cash tips. Take care.

I am paying my employees their tips in their paychecks. Our point-of-sale system automatically updates a tip liability account with each day's close. I have two issues:

1) These tips are basically an "in and out" transaction, but the show up under Employee Wages and since their is no matching income on the other side they distort our P&L.

2) After payroll is run the liability account is not debited by the amount of tips I pay out in payroll. I noted the suggestion above about specifying the tip liability account in an Advanced Setting, but it doesn't seem to work for me.

What am I missing?

Hi there, @KRWehmeyer.

A tips section for employees to enter when they pay their invoices online would benefit your business. I'd recommend reaching out to our QuickBooks Payments support. They can verify if this feature is already available.

You can contact them through your QuickBooks Online (QBO) account. Here's how:
 

1. Hit the (?) Help icon in the upper right-hand corner of the Dashboard.
2. Select Talk to a Human.
3. Enter a short description of your concern and press Enter.
4. Click I still need a human.
5. Select Contact Us to connect with our live support.
6. Choose Get a callback.

To reach us on time, our Live Help is available from 6:00 AM to 6:00 PM on weekdays and 6:00 AM until 3:00 PM on Saturdays. For more details, refer to this link: Contact Payments.

Also, feel free to read about tips and paychecks to learn more about managing them in QuickBooks Online

Additionally, you can check this Community site for references: Commonly used articles to get started with Payroll. It covers the breakdown of articles about setting up Online Payroll, such as employee pay, paying & filing of tax forms, direct deposit FAQs, etc.

You can always visit us here in the Community if you have further questions about adding tips. I'll be around to help you.

I transfer the employees tips each day to them and it is showing up in my bank feeds. How do I enter them so that it will balance to what I have paid them on their paychecks? Also, when I run payroll I use the paycheck tips, so they can get taxed. 

I'll show you how to enter the tips for your employees so it would balance with their paycheck, SBWC93.

In QuickBooks, you're required to track and withhold taxes once your employees received tips from customers. To enter tips correctly, you'll have to set them up as payroll items. To do so, follow the steps below: 

1. Go to Payroll, then Employees.
2. Select your employee.
3. From Personal Info, select Edit.
4. In Additional pay types, select Cash Tips or Paycheck Tips.
5. Select Save.

After you've run your scheduled payroll, you can now enter the amount for tips. For more information, check this article for more information and detailed steps: Pay And Report Tips.

Furthermore, QuickBooks Online (QBO) offers different kinds of payroll reports that will show useful information for your business and employees. To see the lists, I've got this article for your reference: Run Payroll Reports In QuickBooks Online Payroll.

Please get back to us if you have any other questions when recording tips or anything with payroll. The Community is always right here to help you anytime. 

I am attempting to go from desktop to online. In desktop there is "reported cash tips" and "reported cash tips offset". How do we get the online version to add the offset function?

Thanks for joining the Community and getting involved with this thread, whyshouldnti.
 

I can certainly understand how an ability to use a reported cash tips offset function could be useful and have submitted a suggestion about it as of today.
 

You can also submit your own feature requests while using QuickBooks.
 

Here's how:

1. Use the Gear icon, then go to Feedback.
2. Enter your suggestion(s) in the Have feedback? window.
3. If necessary, attach a file with your Camera icon.
4. Select Next.
   
   

Your feedback's definitely valuable to Intuit. It will be reviewed by our Product Development team and considered in future updates. You can stay up-to-date with the latest news about your product by reviewing Intuit's Product Updates webpage.
 

I've included a detailed resource about working with tips in QuickBooks Online Payroll which may come in handy moving forward: Pay & report tips
 

If there's any additional questions, I'm just a post away. Have a wonderful Friday!

Did you ever figure out how to offset tips?

I'm here to assist you in addressing the tip offset concern, @Bargainbabelv.

To manage this issue, I recommend creating a Journal Entry (JE) to record the necessary adjustments. It would be best to ask for an accountant's advice.

Currently, the reported cash tips offset function is unavailable in QuickBooks Online (QBO). I recommend sending feedback to our product engineers. They're tasked with evaluating product suggestions and determining which features to incorporate into future updates.

1. Go to the Gear icon.
2. Under the Profile column, select Feedback.
3. Enter your feedback or suggestions.
4. Click Next.
5. Choose Feedback for the category.
6. Click Send.

Additionally, you can run payroll reports to get a comprehensive overview of your business's payroll activities.

Let us know if you have other questions about tips in QBO. We're here to help in any way we can.