How to implement tips on payroll

In this article you will learn how to utilize Merchant Manager Teams and Roles product too properly distribute and manage tips to your employees. Within the coffee industry it is commons is implement tips on employee payroll or paycheck

With our Point of Sale and Merchant Manager tools we've given our coffee shop partners the ability to handle both scenarios listed above.

Scenario: Implementing a Tip Reporting System in a Coffee Shop

Background: Mario owns a coffee shop in Seattle, Washington. The shop has a team of 15 employees, including baristas, cashiers, and managers. As the business grows, Mario decides to implement a tip reporting system to ensure compliance with federal and state regulations and to streamline payroll processes.

How to use your Teams & Roles feature

It all starts with the point of sale automated calculations feature : The joe Operating system can automatically calculate total earnings by combining hourly wages with reported tips. It also calculates the required withholdings for federal and state taxes.

Merchant Manager Tools:

1. Barista's clock in at the register. Full details here
2. Employee Tip Allocation Report
3. Barista Clock in and Clock Out Shift Report
4. How to create and edit Employees

With the joe operating system you are able to track, edit and update the tip allocation to employees working at that moment. So the employees working at that hour that have completed the order the tip will be split between several employees.

Example Scenario: Tip Allocation Among Three Employees

Background:

• Employees: Alex, Casey, and Jordan.
• Total Tips Earned: $100
• Shift Duration: 4 hours
• Tip Allocation Method: Tips are split among employees working during the hour the tip was earned, and employees must have completed an order to receive their share.

Step-by-Step Allocation:

1. Shift Breakdown:
   • Alex, Casey, and Jordan each work the full 4-hour shift.
   • During the shift, multiple orders are completed, and tips are accumulated

Tip Allocation Table

Conclusion:

Using the Joe Operating Software System, the tip allocation for a 4-hour shift with $100 in tips ensures that each employee—Alex, Casey, and Jordan—receives approximately $33.32. The table illustrates the hour-by-hour distribution, making it clear and easy to track how tips are divided based on employee participation in completing orders. This method ensures a fair and transparent tip allocation process.

Tracking, Editing and Creating Shifts

The Joe Operating System provides a comprehensive time-tracking feature that allows employees to clock in and out using a secure and user-friendly interface. When employees clock in and out, their hours are automatically logged into the system, creating a detailed time report.

Managers can view this report in real-time to monitor attendance and ensure that employees are adhering to their scheduled shifts. If discrepancies occur—such as an employee forgetting to clock in or out—the system allows managers to edit these entries. This ensures that all hours worked are accurately recorded and reflected in payroll calculations.

Merchant Manager: https://manage.joe.coffee/teams-and-roles/shift`

Full Tip Report

You will also see a tip report available and allow you to download and export to your respective payroll system. Here is an example for a two week report scenario and how you would import a report for two weeks of store operations using the Merchant Manager Teams and Roles Tip Report:

1. Generate Report:
   • Log in to the Joe Operating System, navigate to the "Reports" section, select "Time and Attendance," and set the date range for the desired two-week period
2. Review and Export:
   • Review the generated report for accuracy and completeness, then export it to a preferred format (e.g., Excel or PDF)
3. Import to Payroll Software:
   • Open the payroll software, use the "Import Data" feature, and upload the exported report file from your computer
4. Verify and Finalize:
   • Review the imported data within the payroll software, make any necessary edits, and finalize payroll to ensure accurate employee compensation.

Cash Out from Till

Another industry practice is the ability to take their tips earned for their shift directly from cash out from the drawer. You can find full details here: https://support.joe.coffee/article/243-how-to-track-record-barista-tips

If you have any questions about Merchant Manager and would like to connect with our team, email us at success@joe.coffee.