Paycheck tips are gratuities that are paid to the employee on their paycheck, rather than in cash.
Use the Paycheck tips pay type if the patron included the tip on a credit card charge and you pay the tip to the employee through their paycheck when you run payroll. We withhold taxes and include Paycheck tips in wages.
QuickBooks Online Payroll doesn’t support allocated tips as a pay type. However, if your employees receive allocated tips during the year, we can enter an adjustment on their W-2 forms to show the total amount of allocated tips.
To add paycheck tips (not cash tips) to the payday page:
The next time you create a paycheck for the employee, the Paycheck tips column appears. Remember to select this pay type for other employees who also receive. paycheck tips.
After you set up a pay type for one employee, it shows up in the list, so it's easy to assign to other employees.
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