We are updating Patriot Payroll to support the new federal tax rules for tipped pay and overtime under the One Big Beautiful Bill Act. If you have employees who earn tips or work overtime, you’ll notice a few changes in your account so we can capture the right details now and report the right amounts on Form W-2 later.
If you have tipped employees
1) Add a Treasury Tipped Occupation Code (TTOC) to tipped roles
In Patriot, you’ll assign a TTOC to each employee role that receives voluntary tips. This helps ensure the right info can appear on W-2s for tax years 2026–2028.
2) Use the right pay types for auto-gratuities (service charges)
The IRS treats automatic gratuities as service charges, not tips. So we’re helping you keep those amounts separate from true tips for cleaner reporting.
- We’re also adding a new pay type (planned for late January) to make it easier to track auto-gratuities distinctly from “Tips paid” and “Tips owed.”
If you pay overtime
Step 1A: Tell us which overtime hours are FLSA overtime
When an employee works more than 40 hours and you enter time in the Overtime or Double Time boxes, Patriot will automatically prompt a new “Step 1A.” There, you’ll identify which of those hours are FLSA overtime hours. This is for reporting purposes for the W-2, not the pay calculation. Patriot already handles the math.
We’ve also added a One Big Beautiful Bill Payroll Resource Center for handy links to important information.