Restaurant Payroll

Payroll & Taxes

Sophisticated, comprehensive restaurant payroll systems

We understand the difficulties restaurant owners face in managing their employees and their business’ wages and tips. It can be a daunting task to avoid making mistakes. To help you over these hurdles and to help manage your restaurant business more effectively, Associated HCM offers a sophisticated, comprehensive restaurant payroll system that’s powerful enough to handle the payroll needs of any size establishment.


Our payroll system is updated with the latest Federal and State Minimum wage amounts including any tip credits for each state. Regional minimum wage can be applied as needed for employees where the minimum wage is defined by the municipality, county, or region.


Associated HCM offers many types of overtime earning codes to fit your needs:

  • The Wait Staff Overtime earning code will automatically calculate the proper amount of overtime and applies the Wait Staff Overtime Rate to specified hours.
  • The Associated HCM payroll system offers Weighted Overtime codes to allow for overtime calculation for employees with multiple rates where the rate must be weighted based on the multiple hourly rates.
  • Average Overtime is also available for employees who have multiple rates where the Average Wage should be used to calculate the Overtime Rate.

The Overtime earning code can automatically apply the specified Overtime Rate to the employee based on their hourly wage.


Our payroll system allows for the use of the Employee Meal Credit to be applied during payroll. Using a calculation of the employee’s hours and the meal credit hourly rate, our payroll system calculates the appropriate meal credit for the employee during that payroll period.


Tip Credit Makeup ensures that tipped employees earn at least minimum wage and that accurate taxes are withheld. Our payroll system offers different methods for the employer to ensure that proper taxes are taken, though only one is used in each company. The sum of Earning and Tip Earning codes are used to ensure that the payroll system calculates this correctly.

Tipped Credit Makeup is a taxable memo that allows our payroll system to calculate the proper taxation. This will display on the check for the employee as well.

Minimum Wage Makeup adds funds to the employee’s check to cover the shortfall that the employee may have on their check and bring their wages up to minimum wage.


Our payroll system has many different Earning and Memo Codes that can be used to add and show the taxation of tips on the employee’s pay stub.

  • Cash tips can be shown as memo items that are taxable on the check stub, eliminating confusing scenarios where the tips are added and then subtracted from the earnings. On the 941, this shows as 0.
  • Credit Card tips can be displayed as earnings when they are paid out as part of the check, or displayed as a memo when they are payed out of the till as cash instead. Since charge sales may be needed for Tip Allocation Reporting, this allows for easier tracking.
  • Supplemental Wage Charge tips can be used when the employee receives the charge tips in their paycheck, but the charge tips must be shown as OASDI Taxable Wages instead of OASDI Taxable Tips on the W-2 and 941.
  • Banquet Tips and Service Charge earnings are setup using a special code to ensure that they are listed as Wages and not as Tips on the W-2 and 941.


Associated HCM can accumulate the tax shortfall amounts and display them on the check stubs for the employees’ reference. These shortfalls can automatically be recaptured when funds become available in future payrolls. Any uncollected FICA is reported on the 941.


Our payroll system can help to calculate the Section 45B Credit for the IRS form 8846. By producing the Excess Tips FICA Credit Report, employers can easily determine their credit, even in years where the minimum wage has increased.


Tips your employees receive from customers are generally subject to withholding and employees are required to claim all tip income received. This includes both charge tips you paid to the employee and cash tips the employee received directly from customers. As an employer, you must ensure that the total tip income reported to you during any pay period is, at a minimum, equal to 8% of your total receipts for that period (not including nonallocable receipts, such as receipts from carry out sales or receipts with a service charge added of 10% or more). When the total reported to you is less than 8%, you must allocate the difference between the actual tip income reported and 8% of gross receipts.

Our payroll system can help to track and report on Tip Allocation, both on the employee’s W-2 and on the IRS Form 8027.

Employee Tip Allocation can be displayed on the employee’s W-2 by allowing our payroll system to calculate the amounts or by entering the specific amount to be displayed on the W-2 directly into payroll.

Our system will also automatically allocate tips by direct and indirectly tipped employees.


  • Pre-tax deductions, such as Medical Insurance, can be set up to calculate and subtract before tax deductions so employees are covered consistently.
  • Ability to import hours into payroll for easier processing.

Contact Associated HCM

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