Restaurants have a particularly challenging time managing payroll compared to other businesses. With higher employee turnover rates, unique tax situations, and staggering amounts of checks to be processed, it’s easy to see how daunting the managing of a restaurants payroll can be.
Checks Per Period and a Plan to Fit
One of the more common issues we come across with restaurant owners is the unsatisfactory pricing structures offered by a majority of payroll companies out there. With so many different employees, pay periods, and other factors, a simple and easy to manage payroll plan is a breath of fresh air. This is why we offer a simple price per check payroll plan for our clients. No hidden fees, no increase in price, just simple and reliable payroll.
Forms, Forms, and More Forms
One of the biggest burdens on restaurant owners is the sheer amount of paperwork required by managing your own payroll. Bringing on new employees, managing accounting, and of course the IRS. The complex laws that govern employee wages and tips are best left to be managed by payroll and tax professionals. With different types of wages and employees, keeping the IRS happy can be a challenge.
FICA Tip Credits
Under the Federal Insurance Contribution Act (FICA), restaurant owners can apply what their workers earn in tips towards their minimum wage requirements. This gives you the opportunity to reduce your labor costs, but you will need to ensure that you adhere to the minimum wage and cash wage requirements. You are responsible to make up the difference if the employee’s tips do not meet the minimum wage requirement.
when using the tip credit, restaurant owners must calculate overtime based on the full minimum wage, not the lower direct wage, and cannot take a larger tip credit for an overtime hour than for a straight time hour.
Accounting For Meals
Restaurant employees typically eat meals provided by their employers. This is regarded as a fringe benefit by the IRS. Restaurant Owners have the ability to exclude these meals from their employees wages. This results in a nontaxable claim so long as the meals are provided on the premises of the business and the employees didn’t have to leave their jobs to find food.
Managing a restaurant is already an extremely tedious task. With so many other aspects of the business to run, outsourcing your payroll is not only a huge time saver but helps you avoid any liabilities or issues with the IRS come tax season. Check out our payroll services today and see how we can help you.