Payroll for Restaurants: Top 8 Payroll Software Programs for Restaurant Owners

This differs from the federal minimum wage for untipped employees, which is $7.25 per hour. This is because federal law allows employers to take a tip credit from their tipped employees. A tip credit is the maximum portion of the minimum wage that an employer isn’t required to pay a tipped employee. Restaurant payroll is the system a restaurant uses to calculate and manage employee pay.

Training and Educating Staff on Tip Reporting and Payroll

• When selecting a payroll provider, consider factors such as their experience in the restaurant industry, pricing structure, customer support, and reputation.
• It includes basic payroll services for small businesses and is easy to learn and use, although it’s far less robust than many competitors.
• The software boasts a mobile app with time tracking and geolocation capabilities.
• 46 of the top 50 quick-service restaurant brands—including Burger King, Jimmy John’s, Taco Bell—rely on Workstream to hire, retain, and pay their teams.
• He said servers at one of his restaurants, the Copper Door in Bedford, consistently earn $20-$30 per hour.
• You only want to go through the process of choosing a payroll platform once, so it’s smart to choose a platform that can scale up as your business grows.

Here are three methods you can use to calculate the allocated tips you owe for the period. Insights on business strategy and culture, right to your inbox.Part of the business.com network. Patriot Payroll is currently available for $30 per month, plus a $4 per-employee charge. The Time & Attendance module is $5 per month, with a $1 fee for each employee.

Payroll for Restaurants: Top 8 Payroll Software Programs for Restaurant Owners

For restaurant owners and operators, the first step in understanding your payroll is to familiarize yourself with the basic concepts, regulations, and responsibilities. Provide employees with detailed pay stubs that outline their gross pay, deductions, net pay, hours worked, and any tips received. Payroll software can create and distribute paystubs automatically each pay cycle, saving you time and paperwork.

Payroll software or service

• You will also use it to pay your portion of Social Security and Medicare taxes.
• Conduct regular training sessions to review tips reporting, time tracking, and paystub interpretation.
• You can also share data with accounting and time tracking software but OnPay only integrates with a few solutions.
• While Wave Payroll has fairly standard features at a fairly standard price, its completely free accounting software makes it a good pick for restaurant owners who want to save money wherever possible.
• Payroll providers offer access to a team of experts who can provide guidance and support when navigating complex payroll issues.
• To add to the confusion, there are states like Nevada and California, where restaurant owners are required to pay full minimum wage to their tipped employees.

We also gathered customer feedback from real-life restaurateurs to see how their experiences stacked up against our testing. The amount your restaurant will shell out for payroll services varies quite a bit. Some solutions, such as OnPay, charge one rate while others offer tiers of service with custom pricing based on your staff size, pay schedule and specific needs. You can expect to pay monthly between $30 to $150, plus $2 to $15 per employee, but if you have multiple locations or complex needs the prices may be higher. While most providers include unlimited payroll runs, some like ADP also charge every time you process payroll, which can increase costs quickly.

Understanding restaurant payroll taxes

In addition, you will need to track your own deductions that you can take as an employer. For example, as an employer, you may be able to deduct the cost of providing meals to employees at your restaurant as the cost of food or as a separate expense. Using the right payroll system and process can dramatically reduce the amount of time you spend every day paying your employees. Payroll costs typically range from 25% to 35% of a restaurant’s total sales, depending on the type of restaurant and its service model.

Options in this price range typically include a limited number of payroll runs each month and may not include benefits management or state tax filing. Most payroll software for restaurants lets you pay employees through direct deposit into their bank accounts. Some offer additional payment methods, such as paper checks or prepaid debit cards, which can be more convenient for employees. Payroll software helps you track how much your employees earn and how much money should go to employees versus benefit plan payments and payroll taxes. It also facilitates payments to your employees and ensures you remain in compliance with all applicable labor laws. For instance, if your employees use Square Point of Sale to clock in and out, the data seamlessly syncs with the payroll software for easy paycheck calculation.

Which payroll schedule should my restaurant use?

Consider a phased return, where employees slowly ramp up over a period of time with flexible or remote work so they can get back up to speed. Helping employees prepare for pregnancy may feel very transactional, so it’s important to not forget the human element. This is one of the most exciting times in an employee’s life, so don’t be afraid to celebrate. Consider simple and respectful gestures like hosting a baby shower, a send-off before leave, or even small gift contributions for their newborn. Something as simple as a card or a team-wide email can go a long way in creating recognition and showing positive support.

SurePayroll: Best Mobile App For Restaurant Payroll

• We don’t like that only the most expensive plan offers tax penalty protection limited to $25,000 as most competitors offer to cover any penalty for all customers.
• To understand how payroll works for a restaurant, look at the following calculation for a tipped employee working in a state that allows a reduction in minimum wage.
• WBRC visited ten businesses in the area where some workers said they noticed a decline in customers since the shooting while others are still pretty busy.
• Luckily, once it’s up and running, the recurring tasks are fairly consistent—and can even be automated.
• Its basic and full-service payroll options make it a reasonably priced restaurant payroll software solution.
• You should also verify that each employee’s social security number is valid to prevent errors while reporting employee information to entities like the IRS.

If you’re signing up with Toast long-term, just make sure you’ve read the fine print as there are processing contracts and early termination fees. And it was upheld by the Supreme Court, which ruled that the IRS was entitled by tax law to use this method. Employers and/or employees can apply to the IRS for a lesser percentage, but it will never be reduced below 2%. payroll for restaurants They count as income, so they’re subject to income tax, withholding, and FICA tax (Social Security and Medicare). Welcome to our comprehensive – yet growing – library of instructional how-to videos that focus on a variety of functions across our software platforms. Scroll down and filter by category or use the search bar to find exactly what you’re looking for.

An Employee Identification Number (EIN)

• Many payroll services automate this process, making sure all the appropriate forms for the state you do business in are filed promptly.
• That price is worth it if you need the added HR support of a PEO and access to low-cost insurance for employees.
• Restaurants tend to run on thin margins, so using Square for restaurants can help to reduce payroll costs.
• You can run unlimited payrolls and create specific rates and schedules easily for different staff like managers, servers and kitchen workers.
• It should be noted that all tips earned by a tipped employee totaling $20 or more per month are subject to federal income tax and FICA tax.