How to Enter Tips in QuickBooks

by Anthony Smith; Updated September 26, 2017

QuickBooks small business accounting software by Intuit has had a major impact in the way that many businesses operate. The easy-to-use program has made it possible for owners and employees to handle many data entry and accounting tasks themselves, rather than hiring a professional accountant. A complicated job like entering allocated tips as a payroll item is just a matter of a few clicks of your mouse with QuickBooks.

Step 1

Open QuickBooks and click on the "Lists" menu. Select "Payroll Item List."

Step 2

Click on "Payroll," select "Setup and Maintain," and then click on "View/Edit Payroll Items."

Step 3

Click on "Related Activities," and then select "Add a payroll item." Select "New."

Step 4

Choose "Custom Setup," and click on "Next." Pick "Company Contribution," and then again click "Next." Type in the words "Allocated Tips," or just "Tips" as you prefer, and click on "Next."

Step 5

Skip the "Enter a payroll liability" portion of the setup in the next window, and instead enter an expense account in both the liability and expense account fields, and then click "Next." Select "Yes" when you are asked if you want to leave the accounts the same.

Step 6

Go to the "Tax Tracking Type" window, and click on "Allocated Tips" from the choices that appear on the drop down menu. Select "Next."

Step 7

Choose to keep default tax tracking, and click on "Next." When the next window opens, click to make sure that "Based on quantity" is not selected, and click on "Next."

Step 8

Enter a default rate and an annual limit for the allocated tips if you choose to, and then click on "Finish" to complete the job.


About the Author

Anthony Smith began writing for Demand Studios in May of 2009 and has since written over 1400 articles for them. He also writes for "The College Baseball Newsletter." He attended the University of New Mexico, and has more than 25 years of experience in the business world.