How do I add tips to a sales receipt, which are charged and then taken by the server in cash?

Adding tips to your sales receipts in QuickBooks Online (QBO) is a breeze, and I'm here to show you how, @larry-laskatarin.

When activating the Tips (Gratuity) feature, there'll be a Tip field that'll automatically display on your sales receipt. Tips can be found by the totals/subtotals and are not affected by tax or discounts.

When your customers are charged and then taken by your servers as cash, you can create a tip service item then manually add it to your sales receipt every time you make a sale. In case you want a separate income account to track your tips, you can set up a new one in QBO.

Once you're ready, follow these steps to create a tip service item:

1. Go to the Sales menu.
2. Select the Products and Services tab.
3. Click New.
4. Choose Service in the Product/Service information window.
5. Enter the necessary information (i.e., Name, Class, and Income account).
6. Click Save and close.

Then, add the tip item on the second line or right after all your customer charges of the sales receipt. 

Also, you can add tips on employees' paychecks in QBO. If you wish to know more about this process, you can refer to this article: Share tips with your team. It also includes details about paying out tips before depositing the final amount to employees' bank accounts.

Please don't hesitate to let me know if you have other concerns about tips, sales receipts, and managing sales transactions in QBO. You can drop a comment below, and I'll gladly help. Keep safe always, @larry-laskatarin.

Hi Rea_M,

Not sure if I mentioned that I'm using QB online payroll; I didn't see an option to add a non paid tip.

One last, I hope, question for you:

When I add "cash tips" to my employee's payroll record, does quickbooks automatically remove the cash from an account, or do I need to manually do it?  If quickbooks does take care of this, which account does it remove it from?

Thanks!

Larry...

I've got the answers you're looking for, @larry-laskatarin.

Tips are subject to payroll taxes. When you create paychecks, you enter the reported cash amount. This way, we can withhold the taxes for these tips. These appear on the pay stub but are not part of the gross or net on the paycheck. 

After adding them to the sales receipt, it will automatically add to Undistributed Tips (Other Current Liabilities). You'll have to add them to the employee check to pay out the undistributed tips.

Here's how:

1. Select + New.
2. Under Vendors, select Check.
3. From the Choose a payee drop-down, select the employee to whom you are paying the tip distribution.
4. From the Bank Account drop-down, choose the account from where you are making the liability payment.
5. Under Category, select Undistributed Tips, then enter the tip amount in the Amount column.
6. Fill in the rest of the check, then select Save and Close.

You can also refer to this article and proceed to Step 3: Share tips with your team.

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

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

Feel free to message here again if you have any additional questions about employee tips. I'm more than willing to help. Have a great day.