Your Tip Structure Has Payroll Risks You Haven't Thought About
About this episode
The episode discusses the compliance risks associated with tip policies for business owners and how they can lead to payroll issues.
Most business owners set up their tip policy once and never think about it again. That's usually when the problems start. In this episode, Matt and Mike get into the compliance side of tipped employees that most owners don't hear about until they're already in trouble. They cover why overtime math gets ugly when tipped and non-tipped hours land in the same week, what happens when nightly cash-outs create paychecks with zero withholding, and how the One Big Beautiful Bill just expanded FICA tip credit beyond restaurants for the first time. Highlights include: Why tipped overtime isn't calculated the way most owners think What net zero paychecks are and why your employees blame you at tax time The 80/20 rule and how it changed who can do what during a shift How FICA tip credit just expanded to salons, spas, and other tipped industries Why "we've always done it this way" is the most expensive sentence in your business If you have tipped employees and nobody has explained how all of this actually works, this episode will show you where the risks are before they find you. Subscribe so you don't miss Part 2, where Matt and Mike flip to the customer side of tipping and why the…
Topics covered
- tip policy
- compliance
- tipped employees
- overtime rules
- FICA tip credit
- payroll risks
More episodes of One Step Better Podcast
- One Step Better: A Podcast for Accounting Firm Owners
- Has Tipping Gone Too Far? A Business Owner's Perspective
- How to Raise Prices Without Losing Your Regulars
- What Your POS System Isn’t Telling You About Profitability
- Why Your Restaurant Is Busy But Not Profitable
- Why You Can't Understand Your Accountant: Part 2
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