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The History Of Restaurant Employee Tip Handling
No one knows when tipping began. But we do know that in the 1980's the IRS levied new regulations on restaurant owners to track the tips received by the employees of the restaurant.
The magic number of 8% became the benchmark for servers and waiters to declare as their tipped earned. Not because it was accurate. Rather, because it was the minimum amount allowed by the IRS.
The trick is this. Tipped employees in restaurants are generally not paid minimum wage. The amount varies from state to state but it runs between $2.15 to $3.15 per hour. The IRS assumes that the tips received will make up the difference between this low hourly amount and the true minimum wage that is currently $5.15 per hour. If this is not the case, then it is up to the restaurant owner to make up the difference between what the tipped employee earned + declared tips and minimum wage. This makes accurate tip declaration, tracking and reporting a vital aspect of running a restaurant.
The Need For Restaurant Employee Tip Handling
You need a employee time clock system that recognizes tipped employees, tracks their individual sales, any charge tips collected and requires them to declare cash tips at the end of their shift.
You also need a employee time clock system that can handle tip sharing, tip pooling and tip out to bus help, bartenders and other servers.
You need a employee time clock system that will track the hours worked and tips collected and recognize problems with employees not declaring enough tips to meet the minimum wage requirements.
The Solution Of Restaurant Employee Tip Handling
Some point of sale software products have tip tracking built into their time in attendance module. Once you set an employee as a tipped employee the system will require tip declaration prior to clock out.
Servers and waiters who ring sales will have their total sales tracked. Tips collected through credit card sales are tracked and shown on the server closeout report. Prior to clock out the server/waiter will be shown their total sales, the charge tips collected and then asked to declare their cash tips.
Some point of sale products do allow for programming flexibility with this feature:
* You may change the minimum declaration from the default of 8%.
* You may change the requirement to declare tips at clock out.
* You may opt to have the system print a chit with their tips shown.
* You may opt to not show charge tips on the declaration screen.
The Benefit Of Restaurant Employee Tip Handling To You
How do you measure the amount of relief a person can have knowing that your point of sale system is enforcing tip regulations levied by the IRS? Not to mention the mass amount of time savings in tracking declared tips, charge tips and hour worked for every tipped employee.
This is one headache you don't want to have to deal with. If you have tipped employees you need a good point of sale system with tip tracking and time and attendance.
Point of Sale (POS) Systems have now become the business management choice for most retailers when managing their day-to-day business activities. The point of sale system is a computer replacement for the traditional cash register which can perform a variety of innovative functions such as recording and tracking customer orders, processing transactions, managing loyalty programs, credit and debit card transactions, and managing store inventory. The features found in point of sale equipment are designed to improve and enhance business operations. One major benefit of a point of sale system is that it eases the shopping experience for consumers.
The following outlines how point of sale systems improves the shopping experience:
1. One of the shopping features that most consumers dislike is long waiting lines at the checkout. Point of sale equipment allows faster payment service thereby reducing the amount of time a shopper has to wait to pay for their items.
2. Point of sale systems allows businesses to offer loyalty reward programs. Research has shown that consumers love these programs and are encouraged to return to a business where they are a member of loyalty program. Point of sale equipment allows for effective management of these programs. The more often shoppers return to a store, the more likely they are to buy other products or services. An example of this type of program is the ‘Points” card program.
3. POS systems allow a business to manage their inventory to accommodate their customers' purchase preferences. The POS system allows you to view sales reports in real-time so you can track which products are selling. You can stock your business with the most popular products.
4. Shoppers often become quite frustrated when they see an error on their purchase receipt. Point of sale systems allow for more effective and accurate transactions thereby decreasing the instances of customers' complaints about incorrect transactions. This also decreases hold up at the check out line.
5. Point of sale systems allow you to track what customers purchase so that you can learn more about your customers, their buying habits, and personal preferences. This will allow you to better cater to their shopping needs.
6. Because POS systems cut down on the amount of time that business staff has to spend performing business operations, they can spend more time helping customers. Customers will be pleased about the personal attention.
7. The most advanced technology that is used with POS systems allows for the processing of a variety of credit cards, bank debit cards, gift cards, as well as the ability to process discount coupons. Customers prefer shopping at a store where there is more of a choice about how they pay for their items.
Keeping customers satisfied is an essential part of developing and maintaining a successful business. As well, improved and enhanced business management will result in a more profitable company. When choosing a point sale system, one should consider how the system will improve their customers' shopping experience. Point of sale systems are a proven method of easing the shopping experience for consumers.