Restaurant Payroll Software: 360-Degree Guide For Pros

Modern payroll software platforms for restaurants include features that do the math for you, file your taxes, manage benefits, and even help with hiring new workers. Check out our list and see which of the best restaurant payroll software can help you save money in 2023. However, doing payroll on your own is a tedious and time-consuming task. It’s also more prone to human error, which is a problem for something as important as restaurant payroll. Miscalculating payroll taxes can lead to fines, penalties, and compliance issues.

Getting paid daily means workers are never stuck waiting for money that they’ve already earned, and helps to lower turnover rates—a huge issue in the restaurant industry. Doing payroll is a vital part of running a business because your restaurant is nothing without its team. If you pay employees accurately and on time, they’ll keep showing up to work. We published a resource specifically for restaurant managers and employers. Download our Payroll for Restaurants Guide for a detailed (but simple) list of everything you and your employees should know and do when it comes to recording tips, filing taxes and staying compliant.

Trust the Professionals to Develop Your Restaurant Payroll System

Deductions can be programmed to be processed pre, or post-tax according to regulations. When employees get sick or go on vacation, their contract terms need to be applied. Time-off policies need to be configured by company, role, and department. Schedule transparency and flexibility is the second most critical need of shift workers, preceded by increased and accurate pay and followed by recognition and support.

Let’s say you’re running a small food truck, with just yourself and maybe one or two part-time employees. You could probably save yourself some money and skip the software, as long as you’re willing to put in the extra time and effort to ensure your manual calculations Payroll for restaurants are being done properly. While payroll software is worth it for the vast majority of restaurants, there are a few small exceptions to this. You also might be a restaurant owner that’s having trouble sorting out employee benefits for your staff.

As the name suggests, this restaurant payroll report provides information to your state’s reporting agency about the amount of tax your business withheld from employee paychecks. Gross pay for your restaurant payroll simply means the total amount of wages before you take out any taxes or deductions. One of the first steps in setting up restaurant payroll is to get your federal, state, and local paperwork in order.

Further Insights on Top Restaurant Management Software Solutions

You need to accurately collect all of your employees’ data and hours along with their tip report sheets and accurately factor in your state’s taxes. SurePayroll is a solid option for smaller to mid-sized restaurants, featuring a simple, easy-to-use feature set and strong customer service. If you have a limited number of employees and don’t need to pay extra for advanced features, SurePayroll could be a perfectly functional and affordable piece of software.

Confusing tax codes are the root of many preventable payroll tax issues. Make sure that you’re paying taxes for all levels of government that affect you and your employees—including federal, state, and any local tax. Hiring a payroll specialist or using payroll software can help you avoid common mistakes. After choosing a payroll schedule, set up direct deposits into your employees’ bank accounts. ACH bank transfers are a convenient, low-cost alternative to writing checks. Collect bank information from employees during the onboarding process and deposit payments directly into their accounts on payday.

Create a Payroll Schedule

There’s support for W-2 employees and 1099 contractors, and the software takes care of 401(k) deductions with ease. Not to mention there’s complete management of flexible spending and health savings accounts. From the slick employee self-service portal to the powerful reports and dedicated HR resources, Paycor is a mighty piece of software for large operations. If you’re growing your restaurant franchise and need some help, you won’t find much better than this.

We chose Homebase as one of the best options for restaurant payroll because it boasts strong scheduling features, time clocks, and payroll all on its lowest plan tier. As a scheduling and time clock solution, Homebase can handle everything from employees swapping shifts to managing employee timesheets. Gusto has multiple pricing levels for whatever your restaurant might need. Plans range from $40/month + $6 per employee to $80/month + $12 per employee. The software’s Premium plan offers custom pricing for growing businesses. And if you only have contractors, you can use the service for $6/month per contractor.

And did we mention it’s free?

It scored the lowest in user popularity primarily because this software has fewer than 1,000 average reviews on G2 and Capterra. All of the restaurant payroll services we reviewed offer new hire onboarding, tip payment processing, tax filing services, year-end tax reports, and full-service payroll for employees and contractors. Of course, an effective payroll solution must come equipped with robust payroll features. For example, Square Payroll provides full-service multistate payroll, tax filings and payments, timecards, an employee app, and other helpful features for supporting staff members.

• We also like the automatic salary adjustments and helpful integrations with Xero, UpServe, QuickBooks, Trainual, Clover, and more.
• Paycor has four plans to accommodate for every budget, company size, and business need.
• The software earned high scores (4 and up) for pricing, HR tools, and reporting capabilities.
• Of course, an effective payroll solution must come equipped with robust payroll features.
• It can help you manage your employees’ benefits, as well helping you hire new employees.

If you prefer check payments, both ADP Run and Paychex can help you prepare employee paychecks. The Full-Service Payroll option is priced at $29.99/month, plus $5/month per employee. The plan includes employee paycheck calculations, state-required new hire reporting, a four-day payroll processing window and is covered by the SurePayroll Tax Calculation Guarantee. ADP may be familiar to restaurant owners, as well as other business people, as a well-known provider of financial tech. They offer a slate of payroll features, with a menu of add-ons that can be matched to your specific budget. For example, time tracking isn’t included with the basic payroll software, but is available with the Workforce Management add-on.

Using payroll software is a great alternative to hiring a payroll specialist or agency to manage your restaurant’s payroll, or doing it the old-school pen-and-paper way. When you automate your payroll process, you can pay employees accurately and on time, without issue. Integrate with your time clock and scheduling software to calculate wages, overtime pay, tax and benefit withholdings, and even employee payment. Payroll software is also incredibly useful for keeping records (which we’ll cover later). Payroll software costs a fraction of what hiring a payroll professional costs. The best restaurant payroll software should be able to help you manage crucial back-end tasks, such as time tracking, taxes, and employee benefits.

While the cost of the steak will be high, it doesn’t take much labor to grill a steak and throw a potato in the oven for an hour. Ahad is a cybersecurity, blockchain, and business writer who often takes on art, politics, and economics too. He’s written for various tech publications and has reviewed quite a lot of software over his career. When he’s not writing, he’s probably on horseback, caring for his houseplants, or training Bonsai trees. Along with getting to know labor laws like the back of your hand, also know which labor law posters to display at your business.

This illustrates why it’s imperative to check your state’s website for details on what reports are mandatory and when they’re due. In this case, Kim works as a hostess for $15 an hour (the standard rate for a host/hostess in your restaurant) and accrues 40 hours during a single week. However, another hostess calls in sick, so Kim covers her shifts and works a total of 50 hours in one week. If you visualize gross pay as a big pile of money, this step (and the previous two) is you removing expenses a few dollars at a time as required by law.

Get up and running with free payroll setup, and enjoy free expert support. Your restaurant’s payroll may look a little different than another restaurant’s or business’s payroll depending on if you allow tips, have multiple pay rates for different jobs, etc. If you plan on allowing your workers to receive tips, familiarize yourself with tip reporting requirements. Each and every employer has labor laws they need to follow to protect their employees. And when it comes to restaurants, you need to pay close attention to the dos and don’ts of labor laws. Request a demo today to learn more about how we can help make running restaurant payroll as easy as taking someone’s reservation.

The combination of labor and food costs for a restaurant should be designed not to exceed a certain total percentage. To illustrate this principle, consider the difference in labor cost between a fine-dining restaurant and a steakhouse. Each restaurant is unique and has its own particular set of operating costs and expenses. A labor percentage that might work for one restaurant and allow it to make a profit could drive another operation out of business. Other options that are available, but not standard, include things like an employee self-service portal, where employees can fill out paperwork, see online pay stubs, and more.

When your staff scheduling tool integrates with your payroll software, doing payroll is a breeze. Some payroll software will even go as far as automatically filing your taxes for you. This is an extremely useful feature if your restaurant is in its early stages and can’t quite afford an in-house accountant. It can also be a way to avoid paying additional service fees for outside accounting services. Simple comes with access to full-service payroll in one state, along with health benefits administration, accounting, time tracking, and employee self-service. One of the most important features of payroll software for the restaurant industry is the tip management module.

This solution takes care of payroll with tax and compliance capabilities built in. Additionally, features are included for HR-related tasks like expert hiring and HR support, meaning workforce leaders have the resources necessary to provide a positive employee experience. Square’s restaurant POS system includes everything food industry companies need to support their teams and grow their business. The platform also provides features and capabilities that are specific to the needs of restaurant businesses. Restaurant businesses are constantly seeking ways to get ahead of the competition.

Read on for more about this excellent restaurant payroll software and our other top picks. To learn more about how minimum wages range for tipped employees by state, check the U.S. Department of Labor’s Wage and Hour Division resource on minimum wages for tipped employees. In addition, the Economic Policy Institute logs historical minimum and subminimum wages by state with its minimum wage tracker and tipped minimum wage tracker.