Payroll Blog

Payroll Training, Tips, and News

Accounting Blog

Accounting Training, Tips, and News

Press Blog

  • Use Form 941-X to correct errors on your quarterly payroll report.

    Use Form 941-X to Correct Payroll Tax Errors

    posted by Mike Kappel
    Recent Article
  • Tip Credit and Pooling, Reported and Allocated Tips, and Taxes on Tips

    Do you run a small business in a service industry? Do your employees earn tips? The way you handle tip income is different than how you handle regular wages. There are unique ways to report and withhold taxes on tips. Here is a brief summary of things you should know about tip income.

    Use Form 941-X to Correct Payroll Tax Errors

    You submitted the Form 941 quarterly report for employee wages and payroll tax withholding. Then you realized you made an error. What can you do? You should file Form 941-X.

    How to Withhold Taxes on Tips

    If your employees receive tips, it is important to remember that tip income is taxable. Employees must report all tips they receive, and you must withhold payroll taxes on tips.

    What Is Form 941?

    Employers are required to withhold and remit federal income tax, Social Security tax, and Medicare tax from employee wages. You must report tax withholdings every quarter. You will need to get familiar with Form 941 to do so.

    What Is Tip Pooling?

    In many service industries, employees receive tips for their work. If your employees regularly receive tips, you could install a tip pooling agreement. Tip pooling encourages teamwork and equal pay at your small business.

    What Are Reported Tips and the Related Reporting Requirements?

    Tips account for a considerable portion of employee wages in service-based businesses, such as restaurants. But when employees earn tips, what happens to the tip income? Do employees tell you how much they earn in tips? Or, do employees take their tips home only for you never to hear about the tips again?

    What Is a Tip Credit?

    If you have tipped employees, you want to make sure you pay them correctly. You might be able to take a tip credit, which lowers the minimum wage you have to pay tipped employees. But, it’s important to use the tip credit correctly to avoid potential lawsuits or penalties.

    What Are Allocated Tips?

    In the foodservice industry, tips are an important part of employee compensation. Tips are added to employee wages so they can earn at least minimum wage. But, what happens when a tipped employee earns few tips?

    6 Ways Small Businesses Can Survive a Minimum Wage Increase

    Across the country, people are seeing a minimum wage increase. While the current federal minimum wage remains at $7.25 per hour, many states are pushing their wages upward.

    For example, both California and New York have plans that gradually increase their minimum wages to $15 per hour. And, Oregon is not too far behind. Its minimum wage plan will gradually increase wages to $14.75 per hour within Portland’s urban growth area.

    So, as a small business owner, how do you keep up with the rising minimum wage?

    How to Calculate a Full-time Equivalent Employee

    If you have tried to navigate the Affordable Care Act (ACA), you may have come across some unfamiliar terms. One of these strange terms is “full-time equivalent employee.” How can an employee who is not full time be equal to an employee who is full time? And why does any of that matter?

    Tip Credit and Pooling, Reported and Allocated Tips, and Taxes on Tips

    Do you run a small business in a service industry? Do your employees earn tips? The way you handle tip income is different than how you handle regular wages. There are unique ways to report and withhold taxes on tips. Here is a brief summary of things you should know about tip income.

    Use Form 941-X to Correct Payroll Tax Errors

    You submitted the Form 941 quarterly report for employee wages and payroll tax withholding. Then you realized you made an error. What can you do? You should file Form 941-X.

    How to Withhold Taxes on Tips

    If your employees receive tips, it is important to remember that tip income is taxable. Employees must report all tips they receive, and you must withhold payroll taxes on tips.

    What Is Form 941?

    Employers are required to withhold and remit federal income tax, Social Security tax, and Medicare tax from employee wages. You must report tax withholdings every quarter. You will need to get familiar with Form 941 to do so.

    What Is Tip Pooling?

    In many service industries, employees receive tips for their work. If your employees regularly receive tips, you could install a tip pooling agreement. Tip pooling encourages teamwork and equal pay at your small business.

    What Are Reported Tips and the Related Reporting Requirements?

    Tips account for a considerable portion of employee wages in service-based businesses, such as restaurants. But when employees earn tips, what happens to the tip income? Do employees tell you how much they earn in tips? Or, do employees take their tips home only for you never to hear about the tips again?

    What Is a Tip Credit?

    If you have tipped employees, you want to make sure you pay them correctly. You might be able to take a tip credit, which lowers the minimum wage you have to pay tipped employees. But, it’s important to use the tip credit correctly to avoid potential lawsuits or penalties.

    What Are Allocated Tips?

    In the foodservice industry, tips are an important part of employee compensation. Tips are added to employee wages so they can earn at least minimum wage. But, what happens when a tipped employee earns few tips?

    6 Ways Small Businesses Can Survive a Minimum Wage Increase

    Across the country, people are seeing a minimum wage increase. While the current federal minimum wage remains at $7.25 per hour, many states are pushing their wages upward.

    For example, both California and New York have plans that gradually increase their minimum wages to $15 per hour. And, Oregon is not too far behind. Its minimum wage plan will gradually increase wages to $14.75 per hour within Portland’s urban growth area.

    So, as a small business owner, how do you keep up with the rising minimum wage?

    How to Calculate a Full-time Equivalent Employee

    If you have tried to navigate the Affordable Care Act (ACA), you may have come across some unfamiliar terms. One of these strange terms is “full-time equivalent employee.” How can an employee who is not full time be equal to an employee who is full time? And why does any of that matter?