You should be aware that the general rule in Canada is that 'controlled gratuities', which is Canada Revenue Agency's term for any gratuity that passes through the boss's hands, are subject to deductions and must be included in the T4. This means you have to look on CRA's website to see which deductions apply, and assign an income code in payroll to handle the gratuities. As for clearing your 'gratuities owing' account, if the account is in the expense part of the chart of accounts, then the income code can be linked to that account and will clear it out.