Division

Go to Setup/Division/Division

• Enter the basic information for your division. Click "New Division" to save your data. Click “Update” to save any changes to existing divisions. Add more divisions if applicable.

• Est. Number/Region/Alaska Geo Code: Further identification of your division for state reporting purposes.

• State Minimum Wage and State Tip Credit: In processing payroll, PayMaster  uses the state minimum wage and tip credit. Generally, it should take which ever is highest, the Federal or State.  

• You must allocate tips among employees who receive them if the total tips reported to you during any payroll period are less than 8% (or the approved lower rate) of this establishment's gross receipts for that period.

• Generally, the amount allocated is the difference between the total tips reported by employees and 8% (or the lower rate) of the gross receipts, other than non-allocable receipts.

• Lower rate. You (or a majority of the employees) may request a lower rate (but not lower than 2%) by submitting an application to:

Internal Revenue Service

National Tip Reporting Compliance

678 Front Avenue NW, Suite 200

Grand Rapids, MI 49504-5335

or visit

http://www.irs.gov/instructions/i8027/ch01.html

• The burden of supplying sufficient information to allow the IRS to estimate with reasonable accuracy the actual tip rate of the establishment rests with the petitioner. Your petition for a lower rate must clearly demonstrate that a rate less than 8% should apply.

• A majority of all the directly tipped employees must consent to any petition written by an employee. A “majority of employees” means more than half of all directly tipped employees employed by the establishment at the time the petition is filed. Employee groups must follow the procedures in Regulations section 31.6053-3(h); Pub. 531, Reporting Tip Income; and Rev. Proc. 86-21.   The IRS will notify you when and for how long the reduced rate is effective.

• OT Multiplier 1, 2:  Used to calculate over time rates. Default 1.5 and 2.

• Charge Back Percentage: Where tips are charged on a credit card and the employer must pay the credit card company a percentage on each sale, then the employer may pay the employee the tip, less that percentage. This charge on the tip may not reduce the employee's wage below the required minimum wage.

Related Topics

Division