A table-service restaurant lives inside tipped-server math: the six-top’s auto-gratuity that is a wage, not a tip, the server who also hosts, the FICA credit nobody claims. WageTime is payroll built to get all of it right.
None of these is a back-office edge case. They’re the standing conditions of paying tipped servers in a table-service house, and each one is either a manager’s clipboard math or a credit you’re owed and never take.
A server tips out the busser, the bartender, and the food runner off one night’s tips, at a different percentage for each. Do it on paper and the pool is a shoebox of index cards; do it wrong and you’ve put a manager in a credit-taking pool, which the FLSA flatly bars.
An automatic gratuity added to a large party is a service charge, not a tip. That flips the payroll treatment: it’s a wage, it rides in the overtime regular rate, and it’s off both the FICA tip credit and “no tax on tips.” Book it as a tip and the overtime math is wrong.
The 80/20/30 side-work rule was struck down in 2024, so there’s no federal stopwatch on rolling silverware anymore. But a server who also hosts or preps is a separate occupation for the tip credit, some states kept their own limits, and payroll still has to split the hours.
The §45B credit hands back the 7.65% FICA you paid on servers’ tips above a floor frozen at $5.15 an hour. It scales with how heavily your servers are tipped, which makes it real money in a table-service house, and it goes unclaimed every year because the per-employee tip records aren’t clean.
Tipped overtime is figured on the full minimum wage, never the $2.13 cash wage, and a slow week that leaves tips plus cash under minimum owes a top-up. Both are easy to get wrong by hand, and food service is one of the DOL’s most-investigated industries.
Starting with 2026 W-2s, qualified tips get reported separately with a Treasury occupation code, and your servers can deduct up to $25,000 of them. A table-service house carries a heavy tipped-W-2 count, so the new form lands here first.
WageTime runs the tip-out as a pool structure inside payroll: one server’s tips split to the busser, bartender, and runner at the percentages your house sets, and every share lands on the right check with the right taxes.
Replaces the shoebox of tip-out cards and the pool math a closing manager does at midnight.
A large-party automatic gratuity is a service charge, not a tip, and WageTime carries it as a wage pay code rather than a tip earning code: exactly the treatment the IRS requires.
Replaces the auto-gratuity someone booked as a tip, and the overtime rate that came out low because of it.
Side work stays part of the tipped occupation in WageTime’s hour tracking: rolling silverware doesn’t reset the clock, but a server who also hosts or preps is working a second job, so the tip credit rides only the tipped hours.
| Day | Hours | Tip credit |
|---|---|---|
| Mon dinnerServer | 6.0 | Yes, tipped |
| Tue dinnerServer | 6.5 | Yes, tipped |
| Wed setup & silverwareServer side work | 2.0 | Yes, same job |
| Thu lunchHost | 8.0 | No, separate |
| Fri dinnerServer | 6.5 | Yes, tipped |
Replaces the guess about which server hours the tip credit covers, and the flat overtime rate that ignores the second role.
The §45B FICA tip credit runs on per-employee tip records, which WageTime keeps clean and pulls into one worksheet for your accountant: the credit returns your 7.65% FICA on tips above the $5.15 floor, claimed on Form 8846.
Replaces the FICA tip credit left unclaimed every year because the tip records lived on paper.
Starting with 2026 W-2s, qualified tips are reported separately with a Treasury tipped-occupation code, and a table-service house carries a heavy tipped-W-2 count, so WageTime’s included year-end W-2s carry the new reporting.
| Employee | Qualified tips | W-2 status |
|---|---|---|
| Maya R.Occupation code · Waitstaff | $31,240 | Reported |
| Rob K.Occupation code · Waitstaff | $27,600 | Reported |
| Sara L.Occupation code · Bartender | $22,180 | Reported |
| Diego M.Occupation code · Busser | $9,420 | Reported |
Replaces the year-end scramble to reconstruct which dollars were tips, on a form that now asks the question directly.
Full-service payroll is $10 a month per person paid that month, plus $50 a month per company, with unlimited runs. No long-term contracts, no per-run charges.
Off-cycle runs and bonuses cost nothing extra. No long-term contracts; cancel anytime.
Example: 50 people paid × $10 + $50 company = $550 for the month
HR & hiring, onboarding, PTO, time tracking, benefits, and workers’ comp are optional add-ons, priced separately when you’re ready.
See a demoA tip-out runs as a pool structure inside payroll: one server’s tips split to the busser, bartender, and food runner at the percentages you set, and each share posts on the right check. Tip earning codes carry reported tips into the run. When you take a tip credit, only customarily tipped roles can be in a mandatory pool, and managers and owners never can. Bring your split to the demo.
A large-party automatic gratuity is a service charge, not a tip, so it’s taxed as regular wages: income and FICA withheld, and it folds into the overtime regular rate. That keeps it out of the FICA tip credit and the no-tax-on-tips deduction, which apply only to actual tips. WageTime carries a service charge as a wage pay code, separate from tip earning codes, so the run is right.
The 80/20/30 rule was struck down in 2024 and the DOL restored the older dual-jobs rule, so there’s no federal minute cap on a server’s side work, which is part of the tipped occupation. A genuinely separate role, such as hosting or prep, is a second job where the tip credit doesn’t apply. Some states keep their own limits, so WageTime tracks hours by role.
When someone works two or more roles at different rates in one week, WageTime computes overtime on the weighted-average regular rate automatically. The tip credit applies only to the tipped-occupation hours, and the separate role is paid at its own rate. Bring a real two-role week to the demo and we’ll walk the math on your numbers.
WageTime keeps the per-employee tip records the §45B credit is built from and pulls them into one worksheet showing creditable tips above the $5.15 food-service floor. You or your accountant file Form 8846 from that worksheet. Distributed service charges are excluded, since they’re wages, not tips. WageTime keeps the records and the report; it does not file the credit for you.
One login covers both companies. Each LLC files its own returns under its own EIN, deposits and all, and you pull labor cost for the restaurant and the attached bar separately or rolled together. The tipped dining room, the non-tipped kitchen, and a weekend 1099 sommelier all run in the same place. A second concept is another company in the same login, not another payroll vendor.
$50 per month per company, plus $10 per month per person paid that month. No long-term contracts, cancel anytime. A single restaurant paying 45 people comes to $500 for the month: $50 for the company base plus $450 in per-person fees. Runs are unlimited, so off-cycle final checks and bonuses cost nothing extra. Switching is full-service and paid; we’ll scope it on the demo.
Last Friday’s tip-out sheet, a banquet with an auto-gratuity, and a server who hosted twice last week. Twenty minutes with a payroll specialist on a live demo restaurant: you’ll watch a tip-out pool split, a service charge land in the overtime rate, and the FICA tip-credit records total up.
Book a 20-minute demo