--- title: Restaurant Payroll and Tip Reporting Guide | FIXE description: "How to handle restaurant payroll and tip reporting in 2026: tips vs service charges, the new W-2 tip codes, Form 8027, and choosing a payroll provider." image: https://hub.getmyfixe.com/hubfs/bar%20issi%20restaurant.jpg --- [Skip to content](https://hub.getmyfixe.com/communal-table/restaurant-payroll-and-tips#main-content) [![FIXE Logo](https://hub.getmyfixe.com/hs-fs/hubfs/FIXE-2@2x.png?width=333&height=200&name=FIXE-2@2x.png)Homepage](https://www.getmyfixe.com/) - [How FIXE Works](https://www.getmyfixe.com/how-fixe-works/) - [Restaurant Types](https://www.getmyfixe.com/restaurant-types/) - [Pricing](https://www.getmyfixe.com/pricing/) - [FAQs](https://www.getmyfixe.com/faqs/) - [Communal Table](https://hub.getmyfixe.com/communal-table) [Book a demo](https://www.getmyfixe.com/book-a-demo/) - [How FIXE Works](https://www.getmyfixe.com/how-fixe-works/) - [Restaurant Types](https://www.getmyfixe.com/restaurant-types/) - [Pricing](https://www.getmyfixe.com/pricing/) - [FAQs](https://www.getmyfixe.com/faqs/) - [Communal Table](https://hub.getmyfixe.com/communal-table) [Book a demo](https://www.getmyfixe.com/book-a-demo/) ![Payroll and Tips](https://hub.getmyfixe.com/hs-fs/hubfs/bar%20issi%20restaurant.jpg?width=1200&height=675&name=bar%20issi%20restaurant.jpg) Tipping Bookkeeping FIXE # Payroll and Tips ![FIXE](https://hub.getmyfixe.com/hubfs/FIXE-mark-trees-icon.svg) FIXE October 1, 2026 Run every tip through payroll, withhold payroll taxes on reported tips, and keep tips on your balance sheet as a liability, not revenue. Code mandatory service charges separately: they're your revenue and become wages when paid out. Starting with 2026 earnings, your W-2s also show total cash tips and each tipped employee's occupation code. Start with the 2026 tip rules and payroll taxes, then pick a payroll setup. ## Start here - [Restaurant tip reporting compliance guide for 2026](https://hub.getmyfixe.com/communal-table/restaurant-tip-reporting-compliance-guide-2026): What restaurants must do for tip reporting in 2026: the new W-2 Box 12 code TP and occupation code, Form 8027 and allocated tips, service charges, and the FICA tip credit. - [Independent Restaurant Payroll Tax Guide for 2026](https://hub.getmyfixe.com/communal-table/restaurant-payroll-tax-guide-2026): What an independent restaurant owes in payroll tax for 2026: FICA and FUTA rates, deposit schedules, 941 and W-2 deadlines, tips, and costly mistakes. - [Best restaurant payroll and tip reporting options compared](https://hub.getmyfixe.com/communal-table/best-restaurant-payroll-and-tip-reporting-options): How restaurant payroll systems compare on the thing that matters in 2026: separating qualified tips from service charges and getting occupation codes onto the W-2. ## Everything else in this guide - [Restaurant tipping best practices and accounting](https://hub.getmyfixe.com/communal-table/restaurant-tipping-best-practices-and-accounting): Record tips on every paycheck, keep them on the balance sheet, and know the difference between a tip and a service fee. The service fee mistake is what gets restaurants audited. - [Restaurant payroll companies pros and cons](https://hub.getmyfixe.com/communal-table/restaurant-payroll-companies-pros-and-cons): Gusto, ADP, Paychex, Toast, Square, 7shifts and Paylocity compared for restaurants, plus who actually handles payroll and tip reporting for independent operators. ## Frequently asked questions ### Is an automatic gratuity a tip or a service charge? A service charge. It's only a tip if the guest decides whether to pay and how much. Automatic gratuities, banquet fees and kitchen appreciation fees are your revenue, usually subject to sales tax (check your state), and they're wages when you pay them out. ### Do I still withhold payroll taxes on tips in 2026? Yes. Social Security and Medicare still apply to every reported tip. The new qualified tip deduction lowers an eligible employee's federal income tax when they file, but it doesn't change what you withhold, deposit or pay as the employer. ### Which payroll company is best for a restaurant? It depends on your setup. POS-native payroll is strongest on tip data, general payroll companies handle multi-state compliance and benefits, and full-service bureaus fit union rules or garnishments. Whatever you pick, it has to separate tips from service charges and carry an occupation code for each tipped employee. ### What tax forms does a restaurant file for tips? Reported tips go on your quarterly Form 941 with the rest of payroll. Large food and beverage establishments also file Form 8027 each year, and you can claim the FICA tip credit on Form 8846. Have your CPA confirm what applies to you. ## Your next step Want a quick read on your own books? [Get your Restaurant Financial Health Score](https://hub.getmyfixe.com/health-score?src=blog). Ready to talk it through? [Book a demo](https://www.getmyfixe.com/book-a-demo/). ## Related topics - [Cleanup and Tax Season](https://hub.getmyfixe.com/communal-table/restaurant-cleanup-and-tax-season) - [Choosing a Restaurant Bookkeeper](https://hub.getmyfixe.com/communal-table/choosing-a-restaurant-bookkeeper) - [Restaurant Bookkeeping Glossary](https://hub.getmyfixe.com/communal-table/fixe-restaurant-bookkeeping-glossary) ## Share this post [mailto:https%3A%2F%2Fhub.getmyfixe.com%2Fcommunal-table%2Frestaurant-payroll-and-tips](mailto:https%3A%2F%2Fhub.getmyfixe.com%2Fcommunal-table%2Frestaurant-payroll-and-tips) ## Keep reading ### [![Tech Stack and AP Software](https://hub.getmyfixe.com/hs-fs/hubfs/Imported_Blog_Media/FIXE-Communal-Table-FIXE-Core-Tech-Stack-1000x667-1.png?width=1000&height=667&name=FIXE-Communal-Table-FIXE-Core-Tech-Stack-1000x667-1.png) Comparison FIXE Accounts Payable Restaurant Tech Stack and AP Software Guide | FIXE](https://hub.getmyfixe.com/communal-table/restaurant-tech-stack) ### [![Cleanup and Tax Season](https://hub.getmyfixe.com/hs-fs/hubfs/gertrudes%20nyc.png?width=4000&height=2668&name=gertrudes%20nyc.png) Bookkeeping FIXE Best Practices Restaurant Book Cleanup Before Tax Season | FIXE](https://hub.getmyfixe.com/communal-table/restaurant-cleanup-and-tax-season) [![FIXE-2@2x-1](https://hub.getmyfixe.com/hs-fs/hubfs/FIXE-2@2x-1.png?width=150&height=90&name=FIXE-2@2x-1.png "FIXE-2@2x-1")](https://www.getmyfixe.com/) - SOLUTIONS - [How FIXE Works](https://www.getmyfixe.com/how-fixe-works/) - [Fresh Financial Reports](https://www.getmyfixe.com/how-fixe-works/#reports) - [A/P Automation](https://www.getmyfixe.com/how-fixe-works/#automation) - [3rd Party App Intelligence](https://www.getmyfixe.com/how-fixe-works/#3rd-party-intelligence) - RESOURCES - [Restaurant Types](https://www.getmyfixe.com/restaurant-types/) - [Pricing](https://www.getmyfixe.com/pricing/) - [Book a demo](https://www.getmyfixe.com/book-a-demo/) - [Glossary](https://www.getmyfixe.com/fixe-restaurant-bookkeeping-glossary/) - COMPANY - [FAQs](https://www.getmyfixe.com/faqs/) - [Communal Table](https://www.getmyfixe.com/communal-table/) - [Sign in](https://www.fixebookkeeping.com/) - [Contact us](https://www.getmyfixe.com/contact-us/) © 2026 FIXE. All rights reserved.   [Privacy policy](https://www.getmyfixe.com/privacy-policy/) --- ```json { "@context" : "https://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "FIXE", "url" : "https://hub.getmyfixe.com/communal-table/author/fixe" }, "dateModified" : "2026-10-01T18:27:15.256Z", "datePublished" : "2026-10-01T18:27:15.000Z", "headline" : "Restaurant Payroll and Tip Reporting Guide | FIXE", "image" : [ "https://hub.getmyfixe.com/hubfs/bar%20issi%20restaurant.jpg" ], "mainEntityOfPage" : { "@id" : "https://hub.getmyfixe.com/communal-table/restaurant-payroll-and-tips", "@type" : "WebPage" }, "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "https://hub.getmyfixe.com/hubfs/FIXE-2@2x.png" }, "name" : "Fixe Inc." } } ``` ```json { "@context" : "https://schema.org", "@type" : "CollectionPage", "description" : "How to handle restaurant payroll and tip reporting in 2026: tips vs service charges, the new W-2 tip codes, Form 8027, and choosing a payroll provider.", "hasPart" : [ { "@type" : "BlogPosting", "headline" : "Restaurant tip reporting compliance guide for 2026", "url" : "https://hub.getmyfixe.com/communal-table/restaurant-tip-reporting-compliance-guide-2026" }, { "@type" : "BlogPosting", "headline" : "Independent Restaurant Payroll Tax Guide for 2026", "url" : "https://hub.getmyfixe.com/communal-table/restaurant-payroll-tax-guide-2026" }, { "@type" : "BlogPosting", "headline" : "Best restaurant payroll and tip reporting options compared", "url" : "https://hub.getmyfixe.com/communal-table/best-restaurant-payroll-and-tip-reporting-options" }, { "@type" : "BlogPosting", "headline" : "Restaurant tipping best practices and accounting", "url" : "https://hub.getmyfixe.com/communal-table/restaurant-tipping-best-practices-and-accounting" }, { "@type" : "BlogPosting", "headline" : "Restaurant payroll companies pros and cons", "url" : "https://hub.getmyfixe.com/communal-table/restaurant-payroll-companies-pros-and-cons" } ], "name" : "Payroll and Tips", "publisher" : { "@type" : "Organization", "name" : "FIXE", "url" : "https://www.getmyfixe.com/" }, "url" : "https://hub.getmyfixe.com/communal-table/restaurant-payroll-and-tips" } ``` ```json { "@context" : "https://schema.org", "@type" : "BreadcrumbList", "itemListElement" : [ { "@type" : "ListItem", "item" : "https://hub.getmyfixe.com/communal-table", "name" : "Communal Table", "position" : 1 }, { "@type" : "ListItem", "item" : "https://hub.getmyfixe.com/communal-table/restaurant-payroll-and-tips", "name" : "Payroll and Tips", "position" : 2 } ] } ``` ```json { "@context" : "https://schema.org", "@type" : "FAQPage", "mainEntity" : [ { "@type" : "Question", "acceptedAnswer" : { "@type" : "Answer", "text" : "A service charge. 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