Payroll Structure
Payroll interfaces with the Tips application. This interface lets you create tips history from the time record entry forms in Payroll.
You can define the following items to interface with the Tips application.
Pay Class
If you want to include only certain kinds of pay and hours in the tip and tax credit calculations, you can define pay classes. You can define pay classes that represent the kinds of pay you want to include and associate them with pay summary groups. Pay classes Defining Pay Classes
Pay Summary Groups
Pay summary groups provide unique calculations for direct and indirect tips and let you define a common payment description for multiple pay codes. Pay summary groups let you determine whether the associated hours and amounts are eligible to be included in the calculation of the regular rate of pay for the employee. Pay summary groups Defining pay summary groups
Pay Summary Group Relationships
A pay summary group relationship provides the association between pay summary groups and the pay class. You can tie a pay summary group to more than one pay class.
In the Tips application you can:
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Associate tip pay summary groups with the Tips pay class to provide the proper edits and calculations.
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Associate pay summary groups with a unique pay class. Pay summary groups represent specific kinds of pay you want to include in the tip and tax credit calculations.
To calculate and report pay class totals you can include, exclude, or subtract the hours or wages associated with the pay summary group.
Pay Codes
You can define pay codes for adding tip records or for paying tip pay through Payroll.
To add tip records:
You can define a pay code for adding direct and indirect tips by assigning a Non-cash Income calculation type to the pay code. Payroll adds the amounts from non-cash tips pay codes to regular pay to calculate taxes, then subtracts the non-cash amount before calculating net pay. Pay codes Pay rates calculation Defining pay codes
Indirect tips are not used in the calculation of shortfall allocation but are included in allocation level reports and inquiries.
To pay tips through Payroll
You can pay tips through Payroll by defining a tip pay code with a calculation type of Normal Rate. Use this type of pay code to pay directly tipped employees through payroll; for example, for charged tips. Associate the pay code with the direct tip pay summary group and the tips pay class to include it in calculating the shortfall allocation for direct tips. Pay codes Pay rates calculation Defining pay codes
Minimum Wage
You must define a U.S. federal minimum wage and a state minimum wage, if applicable, to use in the calculation of tip credit. When you calculate tips, the Tips application compares the federal and state minimum wages and uses the higher rate in the calculation. Tip credits allow an employer to include tip income as part of the hourly wage paid to an employee to meet the minimum wage rate.