It will sometimes happen that the amount you pay in tax is more or less than what you owe. If more, the IRS will issue you a refund, and typically no action on your part is required. If less, then you may be assessed a penalty amount for underpayment of taxes. The software stays up to date with the latest tax laws, and if mistakes happen, SurePayroll will cover the costs at no extra charge. Merchant Maverick’s ratings are editorial in nature, and are not aggregated from user reviews.

Watch this video, or continue reading below, for three things you must know when it comes to restaurant payroll. You didn’t get into the restaurant business so you could Running Law Firm Bookkeeping: Consider the Industry Specifics in the Detailed Guide run payroll. And if you don’t do it right and don’t pay attention, you could held liable. Other states have a minimum wage payment that is equal to FLSA at $2.13.

How to Run Payroll for Restaurants

The best way to manage payroll for your business is to choose a payroll system. You have the option to do payroll manually, hire an accountant, or use payroll software for your payroll scheduling requirements. Payroll apps generate electronic payroll records, online pay stubs, tip credit, and other features. SurePayroll offers inexpensive online payroll software, including year-end reporting, automatic tax filing and payments, and the option to handle tax filings yourself. It provides access to employee subsidies, HR forms, and an HR advisor.

Homebase Payroll starts at $39/month plus an additional $6/month per active employee. However, clients using Homebase Payroll must also sign up for one of Homebase’s core scheduling and time-tracking packages. Those plans start at $0/month for a basic account with one location and unlimited employees. Extras such as live chats with HR Pro advisors and job posting boosts cost extra. You may also be subject to local Department of Labor rules that require a higher minimum wage than your state rate. ADP RUN is a cloud-based payroll and HR system to support restaurant managers in processing payroll, taxes, basic hiring and onboarding, job postings, and more.

Choosing a Restaurant Payroll Software

In this article, we’ll outline the basics for setting up payroll at your restaurant and give you a checklist for running that payroll. And the Sling allows you to do all that and more as you build the schedule in real time so there’s less back-and-forth trying to keep your restaurant payroll under control. For example, ABC Restaurant will likely have to pay a lower workers’ compensation rate for the new hires on its staff than for the employees who have been there for several years. Being consistent with your state-mandated payroll reports can save you significant time, headaches, and fines down the road. Whether your restaurant is in a reporting or non-reporting state, it’s always a good idea to check your state’s website for details. Every state has slightly different rules, and you want to make sure you’re compliant.

• It’s crucial to be aware of the deadlines for depositing income taxes and payroll taxes – as you don’t want late penalties, interest charges or jail time for violating the IRS tax law.
• Running a restaurant involves many expenses which may quickly deplete your business bank account funds.
• However, clients using Homebase Payroll must also sign up for one of Homebase’s core scheduling and time-tracking packages.
• One factor that can particularly impact this setup is the fact it will only apply to base wages the employer provides directly to the employee.

If the employee doesn’t make at least $7.37 an hour in tips, you’re responsible for making up the difference. The Tax Equity and Fiscal Responsibility Act (TERFA) and Tip Reporting and Alternative Commitment (TRAC) laws govern taxable income. Under those laws, employees must earn more than $20 in a calendar month to have their tips taxed.

OnPay: Best Affordable Payroll Software For Restaurants

In this event, you’ll want to work with a team of professionals dedicated to resolving your tax dispute. Rely on your accountant, restaurant manager and your attorney to carefully review your tax liability and work with your assigned auditor. You need to verify that you’re paying the right person in the right way. That means you need accurate identifying information such as name, address, and bank information for direct deposit.

Restaurant payroll is easy to figure when you’re dealing with an hourly calculation. Finding the best payroll option for you highly depends on the specific needs of your restaurant business. Unfortunately, a one-size-fits-all solution isn’t in the books here. Keep in mind that Payroll4Free can only run on a Windows operating system. Moreover, Payroll4Free caps its services at 25 or fewer employees. Any more than that and you’ll have to onboard another payroll system.

We’ll even tell you the weather forecast so you can determine how many employees need to be on staff for the day. QuickBooks is generally user-friendly, but you’ll need basic knowledge of running payroll. The payroll pricing is suitable for small businesses as you can process unlimited payroll runs without paying extra. With FreshBooks, you’ll have the option to create and send unlimited invoices, accept online payments, and manage your restaurant employees and clients.

To determine what percentage payroll should be in your restaurant, you’ll need to keep track of your employees’ tasks and hours worked. An employer is responsible for paying a portion of payroll tax, which includes Social Security tax, Medicare tax, and FUTA. Ensure compliance and accurate employee data with automated payroll software. Request a demo today to learn more about how we can help make running restaurant payroll as easy as taking someone’s reservation.