A quality designed online Payroll system, like Heartland, knows that the IRS allows businesses to take a tax credit based on the FICA taxes paid on tipped income. Restaurants, in particular, can see hundreds or even thousands of dollars in tax credits per tipped employee per year. It’s estimated 70 to 75 percent of restaurants don’t take advantage of the FICA Tip Credit program. FICA Tip Credits would far exceed payroll service fees on an annual basis in many cases. Is your tipped business utilizing the FICA tip credit?
As an example, if your employee’s are averaging $7 an hour in tips, at a salary of $2.75/hour, your FICA tip credit is $0.35/hour, with 10 such employees, you could save $5000 a year, if you are not now utilizing the FICA tip credit. Contact Dan here at this website to obtain a free one page flyer that describes this in more detail, along with an example Heartland tip report that simplifies taking advantage of this FICA tip credit.[WD_Button id=157]