Create an Other Pay for allocated tips

1. Select PR, Utilities, Maintain Other Pays.
2. Click New.
3. Enter an ID, such as TIPS.
4. For Method, select Variable, entered on time card.
5. For Category, select Individual.
6. Clear all Taxable checkboxes and Add to Gross.
7. In Active, clear Always.
8. Enter 12/31 of the current year for the From and To dates.
   
9. Click W-2.
10. Enter Box 8 in Box number to use.
11. Click Save.

Assign the Other Pay to employees

1. Select PR, Employees, Maintain Employees.
2. Select the employee.
3. Click Other Pays.
4. Add the allocated tips Other Pay.
5. Repeat for each employee receiving allocated tips.

Process the allocated tips

1. Select PR, Processing, Time Card Entry.
2. Select the allocated tips Other Pay in Earnings.
3. Enter the allocated tips in Gross Pay.
4. Click Save.
5. Select PR, Processing, Automatic Payroll Calculation.
6. Calculate the timecard.
7. Print the Payroll Register and verify the amounts.
8. Select PR, Processing, Print Payroll Checks.
9. Use 12/31 as the check date to match the Other Pay active date.
10. Print the checks.

Understand allocated and Social Security tips

• Social Security tips represent tips employees report to their employer.
• Allocated tips represent amounts allocated to tipped employees beyond their reported tips.
• Review Tips, Frequently Asked Questions on the IRS website for additional information.