Discussion:Tip income
From TaxAlmanac
| Revision as of 05:42, 20 August 2007 TheTinCook (Talk | contribs) (There are two wa) ← Previous diff |
Revision as of 10:38, 20 August 2007 MsTwizz (Talk | contribs) (Great! That's j) Next diff → |
||
| Line 49: | Line 49: | ||
| I wonder what kind of account retained tips would be.}} | I wonder what kind of account retained tips would be.}} | ||
| + | |||
| + | {{ForumReplyPost|UserID=MsTwizz|Date=20 August 2007|Text=Great! That's just what I was looking for. I would think retained tips would be a payable account??? current liability. | ||
| + | |||
| + | Thanks for your help!}} | ||
Revision as of 10:38, 20 August 2007
Discussion Forum Index --> Accounting Questions --> Tip income
| 20 August 2007 | |
| How would a salon owner book tip income? It is income to the employee and not the salon, right?
I realize the salon owner needs to pay FICA on the tip income, but what would the entry be? Is there somekind of retained tip account? Thanks, | |
Actionbsns (talk|edits) said: | 20 August 2007 |
| Seems that it would run through payroll just like with a restaurant. You have to book tips paid in, and tips paid out, so that you get the FICA/MC calculation and you get it on the W-2, but it's not an income or expense item to the salon, only to the employee. | |
TheTinCook (talk|edits) said: | 20 August 2007 |
| There are two ways to do tips 1) where the employee keeps the tip and 2)Where the employee doesn't cash out their tips. (Usually from credit card tips, tip pools, employee had to leave before customer cashed out)
The exact mechanics of it depends on the accounting system you are using. You should have a report of cash tips and cc tips cashed out from each employee. In QuickBooks I make a payroll addition item called Tips (you can do one for reported cash tips and one for tips paid out by paycheck), and an after tax payroll deduction item called Retained Tips. If I had to use a manual accounting system I would do something like... dr cash dr retained tips . cr sales . cr tips/P Recorded summary of daily sales and tips retained by employees.
dr tips/p . cr wages/P . cr payroll tax/P . cr retained tips Recored payroll.
. cr cash Paid employees. I wonder what kind of account retained tips would be. | |
| 20 August 2007 | |
| Great! That's just what I was looking for. I would think retained tips would be a payable account??? current liability.
Thanks for your help! | |
