How to Run Payroll for Your Restaurant + Best Software

If you would like to learn more about the importance of systems and how to run a restaurant, read our free special report, Is Your Food Distributor Screwing You? Be sure to visit my YouTube channel for more helpful restaurant management video tips. About Managing Restaurant PayrollNormally I like to talk about making money, but in this case I want to talk about payroll. The last thing you want is an audit, but the truth of the matter is as a restaurant owner, you’re probably going to get audited for labor at some point. In the end, you want employees to be happy and to make sure you are staying compliant. Running a restaurant isn’t easy and getting dinged by the IRS or Department of Labor doesn’t help.

• However, clients using Homebase Payroll must also sign up for one of Homebase’s core scheduling and time-tracking packages.
• It takes into account all of the different variables mentioned above in order to help you meet your obligation as an employer.
• Give your restaurant the team management tools they need to be successful.
• If so, rates, amounts, hours worked, etc. for all the employee’s roles need to be included when calculating gross pay.
• And with restaurant-specific features and near total automation, OnPay simplifies payroll better than just about any software provider.
• Restaurant operators may find it burdensome to perform their duties in the business while simultaneously tracking changes to the tax and regulation environment.
• When researching the best payroll software for restaurants, we considered 20 payroll software options.

Although employers should keep records of non-cash tips received, like sporting-event tickets or gifts, there’s no withholding for non-cash tips. Employees, however, must pay income taxes on all tips, whether received in cash, credit card or non-cash. To set up with a payroll service or independent contractor, some will ask for a fee for every deposit you partake in, while some may offer it for free. You should compare options and choose one that best suits your needs. Ask questions about the different types of direct deposit management offered, fees, taxes and many other services before making a decision. Employees should be scheduled based on their availability, with each shift assigned at least one employee so it doesn’t leave shifts unfilled.

How to choose a restaurant payroll provider

Make sure that you’re paying taxes for all levels of government that affect you and your employees—including federal, state, and any local tax. Hiring a payroll specialist or using payroll software can help you avoid common mistakes. Payroll software is an invaluable tool that helps automate payroll processing to save time and make sure you never miss a payday.

As you can see, managing payroll on your own is a lengthy, confusing process. It’s easy to make mistakes if you’re not a payroll professional, which can get your restaurant into trouble and create headaches for your employees. If you offer your employees benefits, you’ll need to deduct some of their earnings to pay into the benefits they’ve elected. Refer to the payroll forms you collected in step one to figure out how much they want deducted. A salary calculator can help you figure out how much to withhold in payroll taxes. As an add-on, Toast Payroll is affordable and is tailor-made to handle anything that might come up when running your restaurant’s payroll.

SurePayroll: Best Mobile App For Restaurant Paryoll

Gusto’s mid-tier plan bundles payroll basics with timekeeping software, employee self-service onboarding, time-off requests, and PTO features. Its most expensive plan gives you access to a dedicated HR consultant and a host of HR resources. While Wave Payroll has fairly standard features at a fairly standard price, its completely free accounting software makes it a good pick for restaurant owners who want to save money wherever possible. With the Square Team app, your chefs and waitstaff can update their tax info, check pay stubs, clock in and out, and specify their preferred payment method. And (logically enough), Square Payroll syncs with the Square Cash App so you can easily pay mobile-first employees.

The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters. We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team. Unlike an office or administrative role, restaurant employees often have more than one role to fill. Here are a few other things to consider when setting up payroll for your restaurant.

How much does it cost to hire someone to do payroll?

You have the option to do payroll manually, hire an accountant, or use payroll software for your payroll scheduling requirements. Payroll apps generate electronic payroll payroll for restaurants records, online pay stubs, tip credit, and other features. Patriot Payroll software is an online system ideal for an inexpensive way to process payroll quickly.