How to Run Payroll for Your Restaurant + Best Software

Restaurants, especially ones that operate seasonally, can have a high turnover rate, which means owners spend a lot of time filling out required state new-hire paperwork. Many payroll services automate this process, making sure all the appropriate forms for the state you do business in are filed promptly. An online and mobile employee portal allows your staff to keep track of the hours they’ve worked and access year-end tax forms. Some can even let employees check in and out of work and request time off.

• SurePayroll’s full-service plan allows restaurants to quickly and easily automate payroll runs, including payroll tax calculations and filing.
• An EIN will serve as your business’s tax identification number during the process of filing taxes for your business.
• If you want to spend less time managing benefits and more time expanding your restaurant’s locations, a PEO like Justworks can help.
• By automating tasks that come with restaurant management and payroll administration, Gusto lets business owners spend more time and energy on taking their restaurant to the next level.
• It’s a good fit for a small business that expects or hopes to grow into a large enterprise because you can easily migrate to its enterprise solutions.
• Running payroll for the first time is always challenging, but running restaurant payroll can be particularly challenging.

All other tipped employees can report tips to you on a monthly basis to ensure tax payments are accurate. Keep a record of all reported tips to present during an IRS audit or employee complaint. Depending on the state in which your business is located, employees who receive tips can earn a different minimum wage than other staff. The FICA tip credit attempts to ameliorate the financial burden of paying these taxes on the employer. It allows employers to take a credit against their federal income based on the amount of FICA and Medicare taxes paid on tips reported to the employer. One of the reasons that running payroll for restaurants can become complicated is because of the complex rules around paying tipped employees.

Other Restaurant Resources

Many of the best features, such as HR and support only come with premium plans. We don’t like that only the most expensive plan offers tax penalty protection limited to $25,000 as most competitors offer to cover any penalty for all customers. The software calculates and submits taxes automatically, which is especially useful when you have a large staff. Plus, ADP’s stellar customer service representatives can answer any tax-related questions. While we appreciate the flexible plans, we wish pricing were transparent. There’s a one-time setup fee and you’ll be charged per employee and per payroll cycle, which could end up costing you if you pay staff frequently.

The best options for restaurant payroll include Gusto, ADP, Toast Payroll, and more. Restaurants need to have cash on hand, which is why we love that QuickBooks Payroll payroll for restaurants lets you hang on to money longer with same-day direct deposit. Your front and back of house staff will appreciate knowing exactly when payments will arrive.

What Is Restaurant Payroll?

Using payroll software is a great alternative to hiring a payroll specialist or agency to manage your restaurant's payroll, or doing it the old-school pen-and-paper way. When you automate your payroll process, you can pay employees accurately and on time, without issue. Integrate with your time clock and scheduling software to calculate wages, overtime pay, tax and benefit withholdings, and even employee payment.

You must also ensure you classify them as either exempt or non-exempt employees to accurately account for overtime pay. Paychex offers several payroll tools that run the gamut from small business solutions to enterprise platforms. In addition to payroll software, Paychex also provides employee benefits, time clock, HR, and business insurance solutions, but these are all sold separately.

The best payroll software options for restaurants

That price is worth it if you need the added HR support of a PEO and access to low-cost insurance for employees. Wave software is designed for individuals and small businesses that need flexibility and ease managing their finances. It facilitates a fluctuating roster of employees and contractors easily, so it’s an affordable and flexible solution for restaurants with seasonal workers or fluctuating staffing needs.

If an employee has worked more than 40 hours in a single week, you must compensate them for overtime at a rate of at least 1.5 times their normal hourly pay. It depends on the company as to whether the HR department manages payroll. While some do, other businesses may have a separate finance department that handles such matters. Still, others outsource payroll administration processes to a payroll service provider. Once you’ve withheld payments to cover employees’ taxes, unemployment insurance, health insurance and other benefits programs, you must remit those payments to the appropriate agencies. In addition, if your state requires individuals to pay state taxes, ask your employees to fill out any relevant state tax withholding forms.

We appreciate that most features can be added to to any plan and pricing for premium plans is based on your needs, so you’ll get everything you want without paying extra. The Flex Essentials plan has basic payroll functions and an easy-to-use platform for restaurants with less than 20 employees. Select and Pro plans include HR tools and useful add-on features like time management and benefits administration.

However, not all solutions offer this feature and those that do usually include it as a paid add-on or part of a premium package. If your restaurant needs time and attendance software, look for a provider that goes beyond syncing hours worked with payroll. The best solutions also send overtime notifications, allow for paid time off (PTO) management and track regulatory compliance. You may incur other costs, such as setup fees or tax preparation charges.

Paycor also offers tools to help expedite the recruiting and hiring processes, too. What makes Deel special is its ability to handle the intricacies of international payroll, taking the pressure off your team. You don’t have to grapple with confusing local laws and tax systems when hiring international staff for your global restaurant chain. Navigating the intricacies of payroll and HR can be time-consuming for restaurant managers, especially if you’re managing a global workforce. It goes beyond merely processing paychecks—it delves deep into HR essentials, streamlining the entire process. If you need more advanced, scalable features, Gusto or ADP might be the right choice.

• Ensure your team’s pay is always accurate – Lean on the experts who understand the complexities of local, state, and federal legislation surrounding restaurant payroll.
• Both plans’ prices drop by $10 for your 50th employee onward, bringing your per-employee fee down to either $49 or $89 a month.
• As an employer, setting up tip-tracking systems like daily tip reports in your restaurant management software can help ensure your payroll and tip reporting is accurate.
• Payroll software is also incredibly useful for keeping records (which we'll cover later).
• It bundles paycheck processing and payroll tax filing with shift scheduling, onboarding, employee benefits administration and hiring tools.
• You can then make informed decisions about table turnover, price, and capacity to boost sales.

Since each state has their own wage and tax filing regulations, Delker emphasizes that sound payroll management ensures your business stays on the right side of the law by meeting all regulatory obligations. Payroll management is the process by which an employer renders payment for services performed by their employees. You must also deduct pre- and post-tax withholdings, garnishments and insurance premiums and ensure those bills are paid on time and accurately. Gusto is a popular restaurant payroll software, benefits, and HR software. It’s currently used by over 100,000 businesses and can help businesses make every part of the employee experience from onboarding to offboarding more pleasant and more efficient. Payroll costs typically include the cost of both hourly and salaried employees, plus employee benefits.

Many providers offer restaurants flexibility with unlimited payroll runs while others only allow certain pay schedules, such as biweekly or monthly. Consider how often you need to pay employees and if you might need to run irregular payroll like paying contracted staff for a party or catering event. Most restaurants will need a solution that automatically calculates multiple pay rates for their floor staff, kitchen workers and managers.