Worker role
Which jobs are tipped, which duties were performed, where work happened, and which state or local rule applies.
The Margin
Tip credit and tipped payroll: what employers need to prove.
Tipped payroll is not just a lower hourly rate. The record has to show notices, cash wages, reported tips, tip pools, minimum wage support, and state-law differences.
The proof record.
A tipped worker record needs facts that ordinary payroll can miss.
Notice
The employer should be able to show the worker received tip-credit information before taking the credit.
Cash wage
The payroll record needs the cash wage rate, hours, overtime treatment, and any minimum wage true-up.
Tips
Reported tips, allocated tips, service charges, pooled tips, and who kept or distributed each amount.
State differences
Some state or local rules are more protective than federal rules, so the payroll record cannot stop at federal minimums.
Manager boundary
Employers, managers, and supervisors need guardrails around retaining tips or participating in pools.
Runbook product implication.
Tip-credit compliance is a required full-service payroll capability, not a nice-to-have.
FeatureNeededStatus
Tip declarationWorker or employer-entered tips with source, period, and approval.Planned
Tip-credit noticeEvidence that required notice was provided and effective.Planned
Minimum wage checkCash wage plus tips compared to applicable wage rules.Planned
Tip pool evidencePool rules, eligible roles, amounts, distribution, and manager exclusions.Planned
Tipped payroll needs evidence at the edge.
Runbook has to support this before tipped employers can be fully served.
Explore payroll setup