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Intuit

Cash tips vs paycheck tips

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.

 

Cash tips

  • 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

Paycheck tips

  • 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.)

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