It works essentially the same way because the cash flow part of it doesn't change. The only difference is when you run Payroll you add the tips in as additional income without adding to the net check since they've already gotten paid. Fair warning, in some cases this can result in a "negative paycheck" because the taxes they owe on the tips exceeds the net pay from their hourly wage.
Map a Payroll item for Tips to the liability account, so it offsets that account when you record the payout. If your payroll system doesn't allow you to do that, then determine where that money does go, and record a journal entry to move it to the liability account.
Why is it that I learn sooo much more from your videos than my professors?? Thank you sooo much.
LOL Thank you so much! Please share my videos with others 🤓
Do you have a video that goes further into Gift Cards sold and redeemed?
Sorry I don't!
Do you have a video on how to handle tips collected and paid out to employees - then reported on payroll through an external payroll service provider?
It works essentially the same way because the cash flow part of it doesn't change.
The only difference is when you run Payroll you add the tips in as additional income without adding to the net check since they've already gotten paid. Fair warning, in some cases this can result in a "negative paycheck" because the taxes they owe on the tips exceeds the net pay from their hourly wage.
If tips are paid out on their payroll, how do you properly record taking it from the liability account?
Map a Payroll item for Tips to the liability account, so it offsets that account when you record the payout.
If your payroll system doesn't allow you to do that, then determine where that money does go, and record a journal entry to move it to the liability account.
Do you have a restaurant bookkeeping course?
Sorry I don't. Not yet anyway 😉.
Thank you
What’s next can’t wait !! Do not get left behind - P R O M O S M!!
I'm not sure I understand what any of this means, but thank you for the comment 😁