How do I set up a field in AMS Payroll for Taxable Tips?

At the AMS Payroll Menu, select Payer>Payer Edit>Preferences >Check Entry, Select2. Need SS Taxable Tips and click OK. When you add a check, enter the taxable tips amount in the field called Tips.

This option is especially important for businesses and individuals who collect tips as part of routine business operations. This often includes restaurants, whose employees typically have lower hourly wages in anticipation of gathering tips. While added taxable tips to forms is pretty simple, doing so within a payroll software product depends on the elasticity of that tool. This is compounded when those tips are subject to withholding, which the employer must calculate and indicate on employee paychecks.

Dealing with employee tips as an employer can be complicated, but it doesn’t have to be. All tips are subject to federal income taxes, and all tips totaling $20 or more in a month are also subject to FICA tax. The easiest way to track employee tips is to keep a daily record, which includes information about both cash tips and those included as part of a credit or debit transaction. Then, depending on how you want to disperse tips, you can include relevant payments on individual employee paychecks.

Luckily, AMS Payroll provides a great payroll software for the variety of businesses that may need to incorporate taxable tips into their everyday payroll processes. These special payroll considerations include processing direct deposit payments and more than 30 different types of checks and after-the-fact payroll management and data reporting, which is useful when tips are calculated at the end of a day or week. Our restaurant payroll software guide points out a few more of these additions.

Software Solutions from AMS

Our W-2 and 1099 Forms Filer is our only required platform. From there, users pick the services they need. Choose from the tools below to build out your customized accounting software.