How to Run Payroll for Restaurants

It’s also your unique identifier for any paperwork involving the IRS, Social Security Administration (SSA), and Department of Labor (DOL). Instead, go back to doing what you love and let a payroll service or payroll software application do the heavy lifting for you. Keep in mind that if your policy allows sharing of tips among all employees, you are required to pay all of your employees full minimum wage, not the reduced wage. If you choose not to institute a tip policy, your employees will simply retain their own tips.

SurePayroll’s basic feature set before add-ons is somewhat limited, but likely functional for a smaller food-service establishment. And if you’re happy with the product’s ease of use and find yourself needing additional features, the product is highly scaleable (although the fees can add up). If you’re a business owner or manager in charge of payroll, you’ve probably … By law, you must distribute Form W-2 to every employee who worked for you during the year. You also submit W-2s to the state and federal government so they can verify wage and tax amounts.

How to Run Payroll for Your Restaurant

Check to see what your state, city, or municipality requires and be sure to adhere to any and all laws to ensure compliant scheduling. Here are a few simple steps to make sure you do in order to prevent any tax issues when it comes to doing your payroll. See why 1 million restaurant pros choose 7shifts for scheduling and team management. The problem with this is that employees cannot legally claim a right to their earned bonus money. Make it clear in your employee handbook and business operations manual how you pay each type of employee.

And (logically enough), Square Payroll syncs with the Square Cash App so you can easily pay mobile-first employees. SurePayroll is one of our favorite payroll providers for all types of small businesses, and it’s particularly good for restaurants. 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. The Premium plan is the most advanced option, with features that scale to the needs of growing restaurant businesses.

Which Payroll Software Is Right For Your Restaurant?

Make sure that you’re paying taxes for all levels of government that affect you and your employees—including federal, state, and any local tax. Hiring a payroll specialist or using payroll software can help you avoid common mistakes. If you use the tip credit, make sure tipped employees’ wages meet the state minimum wage after tips. Otherwise your business will have to make up the difference out of pocket.

The most popular payroll software is Gusto, and while we don’t pick this as our favorite for restaurants, we can understand why it’s so well-liked. After all, it’s our top pick for the best payroll software for small business. Some of the many reasons we chose it as our favorite general top pick include its fair pricing, scalable plans, comprehensive features, automatic payroll tax administration, and affordable insurance options. Starting at $40 a month, Gusto is pretty reasonably priced, especially considering its automated payroll processing, new hire reporting, and even child support wage garnishments. Even its most basic plan includes health benefits and workers comp support, which we think justifies the $6 charge per employee.

Best for Local Businesses

Wave software is designed for individuals and small businesses that need flexibility and ease managing their finances. It facilitates a fluctuating roster of employees and contractors easily, so it’s an affordable and flexible solution for restaurants with seasonal workers or fluctuating staffing needs. Many software programs can help restaurants, including point of sale software, payroll software, and payment processing software. SurePayroll is a solid option tax exemption definition for smaller to mid-sized restaurants, featuring a simple, easy-to-use feature set and strong customer service. If you have a limited number of employees and don’t need to pay extra for advanced features, SurePayroll could be a perfectly functional and affordable piece of software. ADP is a giant in the payroll industry and, as you might expect, it has everything you could possibly need to handle your restaurant’s payroll needs, benefits, and much more.

• The goal of the FICA tip credit is to ensure that restaurants are reporting staff tip earnings.
• Many software programs can help restaurants, including point of sale software, payroll software, and payment processing software.
• Training the employees on the intricacies of payroll will give them a sense of responsibility in this important part of the operation allowing you to trust that the work is completed as needed.
• Download our Payroll for Restaurants Guide for a detailed (but simple) list of everything you and your employees should know and do when it comes to recording tips, filing taxes and staying compliant.
• Businesses can contact the Square sales team for more pricing information.

We ranked the most food-obsessed cities by the number of restaurants per 100K residents. Census Bureau1, the number of restaurants in each city from Trip Advisor2, and the most “recommended” restaurant within 20 miles of each city’s center from Yelp3. We weighted all five categories equally, along with our expert’s informed opinion, to calculate our star ratings.

The Top 8 Open Source Payroll Software Choices for 2023

In addition to payroll tax reports, some states require restaurants and other businesses that operate within their borders to submit unemployment tax reports as well. Payroll software is an invaluable tool that helps automate payroll processing to save time and make sure you never miss a payday. When your staff scheduling tool integrates with your payroll software, doing payroll is a breeze. Restaurant payroll is a system for calculating and managing the salaries of employees in a restaurant. Employers need to track hours, calculate wages, manage shift schedules, and maintain employee records.

For example, you might get a $100 bonus for every 100 hours of work you log at your restaurant. Despite the employee, there’s a lot to consider when talking about payroll. Menus and napkins aren’t the only paper products on which a restaurant is built. Before an owner even gets to picking font types, they need to complete several steps and forms to ensure the entire establishment is legally aboveboard. The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters. We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.