Reporting tips for employees

[1chuck2chuck]

We are using Square Employee Management as well as Square Payroll for our team members.  Each team member logs into the Square POS Ipad for each transaction that they perform, thus recording their individual tips that they have made for the day.  

At the end of the day and after their shift, the team members will run a report to see what their individual tips are for that day and then do a "Pay Out" from the drawer to collect their drawer tips.  

Square files tax forms and W2's for our team members at the appropriate times of the year on our companies behalf. 

Our question is:  Does Square include the tips for the individual team members on their W2? 

On the "Payroll Settings", we did not have the "Enable Tip Importing" icon selected for neither the "Pool Tips" or "Pay Tips Directly".    

[#2]

@christinam Your staff can keep cash tips, but you will need to do a "pay out" from the cash drawer report each night. 

[#3]

Hi @1chuck2chuck! 

Square Payroll reports tips on the W-2. Tips are reported on multiple boxes on the W-2. 

The tips Square Payroll reports are based on the tips that are entered or imported when processing payroll. You can enter tips into Square Payroll by either using the tip importing feature or by manually entering the tips. See this Support Article for more info. 

In your case, if you are already tracking the tips per employee in Square, you may be interested in using the tip importing feature and select the option to Pay Tips Directly (vs. Pool and Split Tips). You'll be prompted to select the tip payout method - Cash or Paycheck Tips: 

• Cash Tips: This amount should already have been paid to your employee and will not be sent in your pay run. If your employees are taking home their tips in cash at the end of the day, you'll want to select this option. Declaring cash tips ensures accurate tax reporting and documentation. Employee taxes will be calculated for these amounts and withheld from the employee’s pay.
• Paycheck Tips: Tips paid out to your employee(s) for the pay period. This amount will be paid to your employee(s) through Square Payroll, along with their paycheck. 

[LaurenSQ · Accepted solution]

Hi @1chuck2chuck! 

Square Payroll reports tips on the W-2. Tips are reported on multiple boxes on the W-2. 

The tips Square Payroll reports are based on the tips that are entered or imported when processing payroll. You can enter tips into Square Payroll by either using the tip importing feature or by manually entering the tips. See this Support Article for more info. 

In your case, if you are already tracking the tips per employee in Square, you may be interested in using the tip importing feature and select the option to Pay Tips Directly (vs. Pool and Split Tips). You'll be prompted to select the tip payout method - Cash or Paycheck Tips: 

• Cash Tips: This amount should already have been paid to your employee and will not be sent in your pay run. If your employees are taking home their tips in cash at the end of the day, you'll want to select this option. Declaring cash tips ensures accurate tax reporting and documentation. Employee taxes will be calculated for these amounts and withheld from the employee’s pay.
• Paycheck Tips: Tips paid out to your employee(s) for the pay period. This amount will be paid to your employee(s) through Square Payroll, along with their paycheck. 

[christinam]

Does this mean that my staff cant keep their cash tips at the end of the night while also getting their cc tips in their paycheck? 

[AshleyK]

@christinam Your staff can keep cash tips, but you will need to do a "pay out" from the cash drawer report each night.