We have a scenario where employees receive tips that are paid on the day the employee works so the amount of tips received does not need to be paid with the normal payroll but they do need to report the amount for withholding taxes. I did not see a way to use Tips as an earning code that would not increase the amount of the net pay. Has anyone else had a similar scenario or have a recommendation on how to handle the tips?
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Setting up Tips for income already received to deduct taxes
Best answer by SoniaEchols90
Hi cbittle,
- Enter the tips in as earnings, so that they are added to Gross and Taxable Wages.
- Enter the same amount in tips offset as a deduction so that they are excluded from Net Pay.
Sonia
+1Hi cbittle,
- Enter the tips in as earnings, so that they are added to Gross and Taxable Wages.
- Enter the same amount in tips offset as a deduction so that they are excluded from Net Pay.
Sonia
Best,
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