While every employee receives a paycheck or salary, there are certain workers whose primary source of income is based on the tips they receive. Businesses such as restaurants employ individuals who receive tips from satisfied and appreciative customers as part of their salary which are generally subject to withholding. This is an excellent motivator for hard work employees, but it can be a burden for you as the business owner to calculate these tips into your company’s payroll.
ASC Payrollhas three generations of experience helping small to medium-sized businesses throughout New York handle payroll, tax preparation, processing and direct deposit needs, enabling you to focus on your business.
Under federal law all employers are required to ensure that their employees are receiving at least the equivalent of the state’s minimum wage, which is derived from a combination of their tips and salary. If this does not happen, and the state/federal minimum wage has not been reached, the employer must pay the difference in wages to the employee. Employers can receive a “tip credit” from tips received from employees towards their obligation of a minimum age salary. When reporting tips in a tipped business, tip calculations must equal at least 8% of total sales.
ASC Payrollis an IRS registered and accredited company, up-to-date on all Federal, state and city regulations, with the knowledge, expertise and experience of working in this tipped environment and is available to answer any of your questions.
If you need assistance calculating tips into your payroll, visit the company online or call(212) 684-0800for more information.