If you need to set up all of your payroll (compensation, benefits, employees, taxes, and payroll history), run the Payroll Setup interview.
If your food and beverage employees receive tips from customers, these tips
are subject to payroll taxes.
If employees turn in tips, or customers charge tips on credit cards, and you
add these tips to employee paychecks, you need the first payroll item
If employees keep the tips and report the amount to you, you need
both payroll items below. Use them together on paychecks,
making the deduction amount the same as the amount of reported tips. The net
effect is to increase the payroll taxes on the paycheck.
Create an addition payroll item for
the taxable tips. For the tax tracking type, choose Reported Tips.
Create a deduction payroll item for
the tips retained by the employee. For the tax tracking type, choose None.
Important: In the Liability Account field, choose the
same account as the one you entered in the Expense Account
field of the addition payroll item for taxable tips.