Solved: Questions about paying employees tipped wages

sweetartist · ‎01-24-2019

The title of this thread has been edited from the original: tip

I own a small coffee shop/bakery in upstate NY. Since Cuomo has increased the minimum wage again, I have decided to try to pay my employees tipped wages so I dont have to continue to raise my prices.

1. Can employees record cash tips when they clock out, or do I need to collect it and include it in their paycheck?

2. I have been dividing credit card tips by the hours they work. Is there a more fair way to do that?

3. If they dont make the difference to minimum wage in tips, do I add to their tips, or their wage?

Any other information would be appreciated!

Twistedhornmead · ‎02-13-2019

I can help you with the first two! No, Square doesn't have a way to record cash tips. You will need to figure out a way that makes sense for you so you can include that information on the payroll. Typically they keep their cash tips and report to you what their take is that day. Unless you have a communal tip jar and you split it evenly. This is what we do. We collect the cash and divide it evenly among the employees every week. That total is included in the Square Payroll for tax purposes, but doesn't get deducted from your bank because they've already been paid those tips.

You will have to decide how to divide the credit card tips. There are 101 ways to do it. The internet is replete with options for you! Good luck!

I am out in California, and we don't have the tipped wages here, so I can't help you with #3. Sorry!

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Twistedhornmead · ‎02-13-2019

I can help you with the first two! No, Square doesn't have a way to record cash tips. You will need to figure out a way that makes sense for you so you can include that information on the payroll. Typically they keep their cash tips and report to you what their take is that day. Unless you have a communal tip jar and you split it evenly. This is what we do. We collect the cash and divide it evenly among the employees every week. That total is included in the Square Payroll for tax purposes, but doesn't get deducted from your bank because they've already been paid those tips.

You will have to decide how to divide the credit card tips. There are 101 ways to do it. The internet is replete with options for you! Good luck!

I am out in California, and we don't have the tipped wages here, so I can't help you with #3. Sorry!

wgater · ‎06-25-2020

Hi @sweetartist, if you are still looking for a transparent way to keep track of credit card tips & cash tips to fairly pay your staff a tipped minimum wage at the end of the pay period...then feel free check out tipmetric.com. (they integrate w/ Square)