Learn the difference between cash tips and paycheck tips.
Not sure if something should be a cash tip or a paycheck tip? We explain the difference between the two.
- Given to an employee directly, not through a paycheck
- Cash your customers give your employees
- Charges your customers add to credit cards, if you settle up by giving your employee cash
- Are included in the gross or net of the employee's paycheck
- Charges your customers add to credit cards that you then pass on to employees in their paychecks
Your employees report cash tips to you once a month. The paycheck is the way that we track all taxes, so we ask you to enter the amount of cash tips when you create a paycheck. Cash tips appear on the pay stub but are not part of the gross or net on the paycheck. (The employee has already received the money as cash.)