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ezPaycheck: How to Handle Paycheck with Tips in Restaurants, Spas and Hotels

ezPaycheck payroll software makes it easy to pay the employees in restaurants, spas, hotels and other service companies. Here is guide about how to create a paycheck with Cash Tip payment. (Cash tip is the payment that one employee already received in cash from clients, rather than through his paycheck.)

For example: Employee ABC has already received $100 in cash tips. He will be paid another $100 for the tips that clients added to the credit card. As an employer, you need to report total $200 in tip payment to the IRS. Simply, add $100 tip payment in the paycheck

Step 1: Enable Tips payment type

ezPaycheck payroll software comes with Tips wage type by default. You can open the Wage Setup screen to make sure this field is checked.

tips payment setup

Step 2: Add a new deduction "Paid Tips"

2.1 You can click the left menu "Company Settings" then "Deductions" to view deduction setup.

2.2 Check one Customized deduction item, and then clicked the button behind it to open the Deduction Details screen.

2.3 Enter the description (ie: "Paid tips" or another name you like)

2.4 Click the "Save" button on the Deduction Details screen

2.5 Click the "Save" button on the Company Deduction Setup screen to update the database.

paid tips deduction
(Click image to enlarge)

Step 3: Generate a paycheck, add the total tips payment amount and deduct the paid cash tips from net pay

paycheck with tips

Step 4 Print the paycheck

paycheck printing
(Click image to enlarge)

payroll software
ezPaycheck payroll software has been trusted by thousands of successful businesses for more than one decade. It helps you process payroll taxes, print paychecks and file tax forms easily and smoothly.

If you have not installed this software, you can download and try it free for 30 days with no obligation and no credit card needed. ezPaycheck is available for both Windows and Mac computers.

**$109/calendar year - Unlimited check printing. No monthly fee. No hidden cost**

No monthly fee. No hidden cost.


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