Tip Declaration & Reporting Questions


Can my employees be forced to declare?
Yes, they can be required to declare their tips by enabling the setting that exists in the Employee Module -> Manage Security Rights
 
Can my employees be forced what they are declaring?
No, we can set the percentage of sales suggestions, but ultimately the tip declaration as per the employee's discretion. Talking about tip declaration amounts is a grey area for us as the point of sale, as the industry standard is under-declaring. With that being said, there are many incentives to why an employee would choose to accurately report their tip amounts. The first is if they are trying to maintain a consistent amount of income. This will come in handy if they are trying to purchase a home or car. Accurate tax reporting means they are less likely to owe back on their taxes at the end of the tax season and may experience a tax return.
 
You are responsible to report Credit Card Tips to the IRS*
 
Why are my ToGo tips not represented in my declared tip figure?
This was done intentionally based on the popularity of the request. The reason behind this is because ToGo orders are typically shared tip-outs, as the server might be the person who creates the order, then the kitchen bags it up, and then the bartender cashes them out, etc. How do we determine who receives the tip and therefore claims it to the IRS? 
 
For those that do want the ToGo tips to be a part of their suggested tip-outs, I suggest that you create a TOGO table in the seating chart. This will still read as TOGO to the kitchen but will show in your suggested tip-out amounts since Sapphire is treating it as if it were a Dine-In Table. 
 
Why are some of the tip amounts in the "Other" column of the Advanced Payroll Report negative?
The "Other" column is showing the difference between the DECLARED TIPS and the CREDIT TIPS capture for each employee. In an ideal setup, the "Other" tips would represent CASH TIPS and show as a positive figure. 
 
How do I report my tips to the IRS?
The tips reported to the IRS should be their credit card tips - their tip pool contributions. In the ideal scenario of "Other" tips being a positive number. It would be Other Tips + Credit Tips - Tip Pooling. *
 
 
* Note that these claims are not that of an accountant. Khamu Solutions is not providing legal advice. The IRS states that all tips should be reported as income. 
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