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

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