How to Record Tips and Gratuities in QuickBooks

by Greg DePersio

0 min read

If you run a service business, your employees may receive tips and gratuities from customers for good services provided. To record the tips and gratuities in QuickBooks Online, you have to create a Gratuity/Tips liability account first. Take the following steps to create the liability account:

  1. Click the Gear icon in QuickBooks and select Chart of Accounts.
  2. Click New at the top right.
  3. Choose Other Current Liabilities in the drop-down list.
  4. Select Other Current Liabilities under Detail Type and enter “Gratuity/Tips” in the Name field.
  5. Click Save to save the information.

To record the tips received by employees in QuickBooks, take the following steps:

  1. Click the plus sign at the top and click Check/Cheque.
  2. Select the back account to pay the tips from.
  3. Select the employee to pay the tips to.
  4. Enter amount and select Gratuity/Tips in Account field.
  5. Click Save.

References & Resources

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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