Report Tips in & out On Employee Paychecks QuickBooks Desktop Payroll

QuickBooks Desktop Payroll enables the users to report tips in and out on employee paychecks. So, here learn the steps to report tips in and out on employee paychecks in Quickbooks Desktop Payroll. If your employees get tips from customers, then these tips are directed to payroll taxes.

  • Cash Tips – The employee gets tips in cash, keep that amount, and also lists the amount to you. As the employee receive the cash tips, then you should list it on the paycheck, then withdraw the amount, so that they do not have to pay again for the cash tips. You have to design both of the below payroll items.
  • Credit Card Tips – Turns into employee tips, or customers take tips on credit cards that will be calculated to the employee paycheck. You have to create the first payroll item below.

Steps to report tips in and out on employee paychecks in Quickbooks Desktop Payroll

Go with the steps below how your employees get their tips.

Steps to create a payroll item for the taxable tip amount

Use this payroll item to report all tips the employee receives.

  • Open your QuickBooks Desktop and go to the Lists and later click on the Payroll Item List.
  • Now, click on the Payroll Item and click on  New.
  • Select Custom Set-Up and click on Next.
  • Now, click on Addition and later go to the Next.
  • Give a name to the item (for instance, Tips In) and click on Next.
  • Select the Expense account and click on Next.
  • Now go to the Tax tracking type window, and click on Reported Tips. Click on Next and later click on Next.
  • On the Calculate based on quantity window, click on Neither and choose to Next.
  • Click on Finish in the Limit Type window.

Steps to create a payroll item for tips retained by the employee

Use this payroll item to remove the tips the employee has received physically.

  • Open QuickBooks Desktop, and go to the Lists and click on the Payroll Item List.
  • Click on Payroll Item and select New.
  • Go to the Custom Set-Up and click on Next.
  • Click on Deduction and choose to Next.
  • Give a name to the item (for example, Tips Out) and click on Next.
  • Select the Liability Account and Click on Next.
  • Note: It is compulsory to choose the same account that is recorded in the expense account field of the payroll item in addition to the taxable tips).
  • Now, go to the Tax tracking type window, and click on None. choose to Next and click on  Next.
  • Later, on the Calculate based on quantity window, click on Neither and choose to Next.
  • Click on Net Pay and click on Next.
  • Click on Finish in the Limit Type window.

Hope, this article will be helpful for you to report tips in and out on employee paychecks. For any further assistance and query, dial our toll-free +1-855-441-4417 and get connected with our Intuit Certified ProAdvisors and get instant help for your query.

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