Taxing Cash tips in Sage 50 payroll

Question

We have servers that get cash tips that are not paid on their check but they want us to take out taxes for them on these tips. How do I get the program to tax these tips. Currently they are only shown in the memo tips. 
 HELP PLEASE!

StephenC · Accepted Answer

If you already have the tips field set up, then you just need to add them to "Adjusted Gross" for each tax. Here are the steps you need to follow. 
 Adjust the employee taxes 
 
 Select Maintain , Payroll , and then Employee Defaults . 
 Select the Employee Fields tab. 
 Select the Adjust button at the end of the Fed_Income line.
 
 Note: Selecting the Adjust button for Fed_Income makes sure the amounts reported for Meals and/or Tips are included in the totals for FIT when W-2s are created. The same is the case for all other fields Meals and/or Tips should affect.

In the Employee Field Names field, check the Use column for tips (could be Tips or CashTips, or whatever you named it). 
 Select OK to close the Adjust screen.
 
 Repeat steps 3-5 to modify the Adjust button for Soc_Sec , Medicare , and State .

If there are other local taxes that need to include these wages, modify the adjust button on that line. 
 
 Adjust the company taxes 
 
 Select the Company Fields tab, and then on the Soc_Sec_C line modify the Adjust button to include tips. Repeat that process for on each of the following lines: , Medicare_C, Fed_Unemp_C, and St_Unemp_C. 
 If you have additional employer-paid taxes that need to include these wages, modify the Adjust button on that line. 
 Select OK to save those changes and close the Employee Defaults window. 
 Select Maintain , Payroll , Payroll Settings . 
 Select Taxes , Assign TaxFields , W-2 Fields . 
 Select the arrow next to Social Security Tips , and then select CashTips (or whatever your tips field is named) . 
 Select OK . 
 Select Finish to close the screen.

Sage 50 US

Taxing Cash tips in Sage 50 payroll

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