How does Square Payroll calculate restaurant minimum wage and employers "tip credits"?

deballen · ‎01-09-2022

How does Square Payroll calculate restaurant minimum wage and employer "tip credits"? For instance, If waitress Jane's min wage is $5.13/hr and an additional $7.87 must be allocated from collected tips to reach the required min wage of $13/hr, how does Square account/calculate this and adjust earned tips? Is it automatic?

If the tips collected do not bridge the gap between min wage and tips collected, is employer notified by Square to adjust it manually?

Thank you!!

Ellie_ · ‎01-13-2022

Hi there @deballen,

These are currently two feature requests, so I have moved your post to our Feature Request board for other Sellers to view and vote!

In regards to tip credits, Square Payroll does not currently provide a FICA tip credit report to fill out Form 8846. The FICA tip credit applies to tips received by employees serving food and beverage and it is not applicable to other tipped employees. You can learn more about the tip income on the IRS’ website.We recommend working with your accountant or tax professional for assistance filing this form. You can find payroll reports and timecard labor cost reports in Square Dashboard.