Once you add up all these pre-tax deductions, subtract them from the employee’s gross pay before moving on to the next step. When it comes to restaurant payroll, pre-tax deductions are those that your employee chooses to withhold from their paycheck. For more information on the process, see the section How To Run Restaurant Payroll With Overtime below. If any of your employees work overtime, you figure the numbers as part of your gross pay calculations. Gross pay is the basis for all the other calculations you’ll perform before you reach the net amount that you’ll write on each employee’s check. Gross pay for your restaurant payroll simply means the total amount of wages before you take out any taxes or deductions. The easiest of those to use is the digital timesheet because the numbers often transfer directly into the software you’ll use to run the calculations to determine the final paycheck. Your timesheets may be of the paper variety, the more modern punch-card type, or the cutting-edge digital style. The first step is to collect timesheets so you know how many hours each of your employees worked. Once you’ve got your restaurant payroll process set up and ready to go, it’s time to start crunching the numbers. We’ll discuss this in a bit more detail later on in this article. That part is fairly straightforward, but it gets complicated very quickly when you factor in tipped wages and other pay structures.īe sure you know how to calculate overtime properly so your business doesn’t find itself in legal trouble later on. Overtime pay has its own set of equations that you’ll need to know to calculate restaurant payroll.įor any hours worked over forty, you’re required to pay the employee time-and-a-half (or 1.5 times their normal hourly wage). Make sure you’re familiar with the equations that apply to the various pay structures within your restaurant payroll. The formula is just hours worked multiplied by the wage for that position (35 hours in a week X $10/hour = $350).īut things can get more complicated when you factor in the multiple pay rates mentioned in the previous section, tips, and even salary vs. Restaurant payroll is easy to figure when you’re dealing with an hourly calculation. Or a food runner ($9.50/hour) may fill in for a busser ($8/hour) if you run into a no-call, no-show situation.įor those eventualities - and for accurate restaurant payroll - you’ll need to establish multiple pay rates and keep track of who worked what position and for how much. And your business will usually pay those jobs at different rates.įor example, a host or hostess ($12/hour) may fill in for a server ($8/hour + tips). Restaurant payroll is unique in that employees often fill more than one position during a pay period. 3) Set Up Multiple Pay Rates If Necessary Regardless of the process you choose, you’ll need to keep a record of tips received so you can produce an accurate restaurant payroll. You may choose to set a creative tip jar on the counter or institute a tip pooling policy. Setting up restaurant payroll also requires that you implement some sort of tip reporting process. It doesn’t matter if you decide to do payroll yourself or hire a payroll service to do it for you, you need all of this information on file before you cut your first check. A separate bank account from which to pay wages and taxes.A plan for when you will pay employees (also known as a payroll schedule).Completed employment forms (e.g., W-4 and I-9).Federal Employee Identification Number (EIN).One of the first steps in setting up restaurant payroll is to get your federal, state, and local paperwork in order.
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