Cash out tips from CC transactions to owners of the business

[blhelm610]

We are a nano-brewery/taproom located in a small community. There are three of us co-owners that primarily serve customers. We have no regular employees.

My question is, do we as owners need to "cash out" the tips paid on Credit Card transactions at the end of each day? What if we as owners choose to keep the tips in the business cash flow?

I certainly see the necessity and legal requirements to pay employees the tips they earn. Certainly, paying employees from the till for the tips from the CC transactions makes perfect sense. It sure makes it easy when there is only one person behind the bar in the taproom. However, I see it getting complicated when there would be a mix of employee and owner doing the serving. The only way to determine which transactions the employee earns tips on is to force a login to the POS system (square). I'm sure we'll address this when we hire on employees.

In the meantime, do we need to treat ourselves as employees? Are we forced to "Cash-out" the CC tips and pay ourselves out of the till? What if there are more CC transactions than cash and the tip totals exceed the available cash on hand? (Likely not feasible but potentially possible).

[Thirsty_Monk]

Tips are considered your personal earnings (that you have to report) and such can not be kept as a cash flow.

[AmbrosiaOrchard]

We are a nano-brewery/taproom located in a small community. There are three of us co-owners that primarily serve customers. We have no regular employees.

My question is, do we as owners need to "cash out" the tips paid on Credit Card transactions at the end of each day? What if we as owners choose to keep the tips in the business cash flow?

I certainly see the necessity and legal requirements to pay employees the tips they earn. Certainly, paying employees from the till for the tips from the CC transactions makes perfect sense. It sure makes it easy when there is only one person behind the bar in the taproom. However, I see it getting complicated when there would be a mix of employee and owner doing the serving. The only way to determine which transactions the employee earns tips on is to force a login to the POS system (square). I'm sure we'll address this when we hire on employees.

In the meantime, do we need to treat ourselves as employees? Are we forced to "Cash-out" the CC tips and pay ourselves out of the till? What if there are more CC transactions than cash and the tip totals exceed the available cash on hand? (Likely not feasible but potentially possible).

We are in a similar situation. My wife and I are owners and sometimes bar-tend. Anytime we have an employee serving as well the employee gets all tips. As owners, we cash out credit card tips if we are the only ones serving. Either way, always cash out your tips. You can also use quick books to convert those tips to owner investment if you choose to keep that in your cash flow. We just write the business a check from our personal account.

[TiminOz]

A very simple solution is to divide the hours worked into the tip pool for both CC and cash tips. If you have a part time person serving pull all tips earned prior to their start time and again at the finish. I will say that in most cases any manager/owner on a salary should not be earning tips. You will never be able to hold onto any staff.

[GlacierBrewing]

We are a nano-brewery/taproom located in a small community. There are three of us co-owners that primarily serve customers. We have no regular employees.

My question is, do we as owners need to "cash out" the tips paid on Credit Card transactions at the end of each day? What if we as owners choose to keep the tips in the business cash flow?

I certainly see the necessity and legal requirements to pay employees the tips they earn. Certainly, paying employees from the till for the tips from the CC transactions makes perfect sense. It sure makes it easy when there is only one person behind the bar in the taproom. However, I see it getting complicated when there would be a mix of employee and owner doing the serving. The only way to determine which transactions the employee earns tips on is to force a login to the POS system (square). I'm sure we'll address this when we hire on employees.

In the meantime, do we need to treat ourselves as employees? Are we forced to "Cash-out" the CC tips and pay ourselves out of the till? What if there are more CC transactions than cash and the tip totals exceed the available cash on hand? (Likely not feasible but potentially possible).

Howdy blhelm610,
Yes, cash out the tips at the end of each shift. It will establish good practice for when you do have employees. What you do with those tips (reinvest them into the biz, start a doughnut fund, go to the dog track) after that is you’re business.
When the CC tips exceed the cash on hand in the till, we tip out our employees from the surplus change bag we keep on hand.
Check with your state’s labor department regarding “tip pooling” as many states view that as illegal. If I’m working in the tasting room with an employee, I let the employee have all the tips, as this breeds good morale and happy employees. When I have multiple employees working, they just use their sign in code to separate CC tips: easy-peasey. We use TouchBistro POS which makes this very easy and efficient.

Prost!
Dave