Not all payroll software will offer the same tax management tools, though, so think carefully about what’s right for you and your business. Another significant advantage of ADP Run is its built-in tax compliance feature. It uses payroll for restaurants an AI-powered error detection method to identify and flag tax errors before submission. The tax compliance tool also has an excellent feature for managing and tracking overtime hours, overtime scheduling, and overtime pay.

The Square for Restaurants software provides a Free plan, which includes basic restaurant service features. In addition, it offers access to basic employee training programs and many other features that other payroll systems don’t provide. OnPay is excellent for human resource payroll with HR-focused tools, including tools for employee offer letters, Social Security and Medicare, and benefits administration. SurePayroll pricing is relatively cheap; however, if your restaurant is located in Ohio or Pennsylvania, SurePayroll will charge extra for local tax filings. The monthly fees for add-ons may grow pricey depending on the add-ons you choose.

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Meanwhile, the all-in-one restaurant POS system can provide capabilities for ticketing, mobile payments, and features to streamline communication among restaurant staff. The Full-Service Payroll option is priced at $29.99/month, plus $5/month per employee. Choosing the best payroll software for your restaurant business is essential, but assessing the different options on the market can take time. To remove this hassle, we’ve compiled a list of the top payroll software solutions for restaurant businesses in 2023. The software products featured in this article can help you optimize your payroll processing, save time and improve accuracy for your business.

For example, you’ll be able to cherry-pick the services you need and bolster your package with add-ons. Gusto is a restaurant payroll software that covers everything you need, and that’s why we like it so much. Thanks to tip calculation and payroll taxes, running payroll probably won’t ever be a breeze at your restaurant. If you already use Square Point of Sale, Square Payroll is the perfect add-on. When you use the two together, you can easily import credit card tip amounts and employee hours worked to process payroll quickly and accurately.

Restaurant Payroll: The Ultimate Guide For Business Owners

RUN Powered by ADP is provided in four packages, and the price is based on the number of employees. Businesses should contact the RUN by ADP sales team for a free quote. 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 https://www.bookstime.com/ by included advertisers. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team. Since Brad lives in Texas, the tip credit his employer can take is $5.12. Once these items are complete, you can move on to setting up your payroll system.

For example, if you’re leaning toward using payroll software for restaurants, do your research to determine how to choose a restaurant payroll provider. 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.

How do I treat benefits and deductions at my restaurant?

Processing payroll is a complicated but essential task for restaurant owners, operators, and managers. Calculating, distributing, and managing restaurant payroll for your employees is complex, and any errors and non-compliance with government mandates can result in costly fines or taxes for your business. Errors with reporting tipped wages are also a common way that restaurants get into tax trouble.

That fee isn’t bad, but if you’re a franchisee with restaurants in multiple states, Gusto’s free multi-state payroll could save you a bit of cash. And since SurePayroll has just two plans, it’s not as scalable for rapidly growing businesses as, say, ADP or Paychex. SurePayroll is an affordable and straightforward payroll software that offers automatic payroll runs, tax filing, and exceptional customer service. Your restaurant business needs to prove you are following minimum wage laws through calculating employee tips as a part of their hourly wage, through applying a server tip credit. Did you know that payroll/labor makes up almost one-third of a restaurant’s operating costs?

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If you start using Patriot Payroll software in the middle of the month or quarter, you’ll receive help recording your employees’ payroll history, whether they are tipped employees or management staff. However, if you’re looking for restaurant payroll services with inventory and fixed asset management, FreshBooks is not for you. When researching the best payroll software for restaurants, we considered 20 payroll software options.

• If so, a reliable method of tracking your tips will be required to apply for the credit.
• However, it might not be a good fit if you need more straightforward and cheaper payroll software.
• Unfortunately, a one-size-fits-all solution isn’t in the books here.
• Some restaurant payroll services can accommodate employees with multiple rates, but be sure to ask your potential payroll provider if their system is compatible with multiple pay rates beforehand.
• In order to calculate payroll properly, you will need to institute a proper tip reporting system.
• This is preferable to writing checks because you can’t predict when an employee will cash their check, and this could cause cash-flow complications for the restaurant.
• Note that state minimum cash wage and maximum tip credits may differ and certain states prohibit tip credits.

Not to worry; there are plenty of restaurant payroll services available that can help ease your mind. To learn more, check out our in-depth reviews of payroll software, but here are a few that we wanted to call out in particular. All other tipped employees can report tips to you on a monthly basis, which will ensure accurate tax payments.