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    How to report tips in and out on employee paychecks

    Article ID: 1000793

    Overview

    This article describes how to report tips on employee paychecks.

    Details

    To add reports tips to a paycheck you must first create two payroll items. To create the reported tips in and reported tips out payroll items:

    To set up a payroll item for reported tips in:

    1. In QuickBooks, choose Lists > Payroll Item List.
    2. Click Payroll Item > New.
    3. Select Custom Set Up and click Next.
    4. Select Addition and click Next.
    5. Name the item (for example, Tips In) and click Next.
    6. Select the Expense Account and click Next.
    7. Click Tax Tracking Type and select REPORTED TIPS. Click Next > Next.
    8. In the Calculate Based on Quantity window, select Neither and click Next.
    9. In the Default Rate and Limit window, click Finish.

    To set up a payroll item for reported tips out:

    1. In QuickBooks, choose Lists > Payroll Item List.
    2. Click Payroll Item > New.
    3. Select Custom Set Up and click Next.
    4. Select Deduction and click Next.
    5. Name the item (for example, Tips Out) and click Next.
    6. Select the Liability Account and click Next.
      Note: You must choose the same account as the one entered in the Expense Account field of the addition payroll item for taxable tips).
    7. Click Tax Tracking Type and select None. Click Next > Next.
    8. In the Calculate Based on Quantity window, select Neither and click Next.
    9. Select Net Pay and click Next.
    10. In the Default Rate and Limit window, click Finish.

    After you set up these items, you can add them to employee paychecks under Other Payroll Items. Enter the amount for each item in the Rate column.

    2 comments

    Deb2/25/2013

    Awesome. Got my question answered.

    Reply

    Terri6/3/2013

    Thank you. I couldn't figure out why the taxes and wages were no calculating correctly.

    Reply

    Comments can not be added at this time.

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