8 Best Restaurant Payroll Software for Small Businesses in 2023

Payroll for restaurants

It may be more common for a payroll system to integrate with other apps. One thing to note is that an online payroll service may help you store employee hours and payroll records. To run payroll for your restaurant, you need to keep accurate records for your employees. You should have general information like their name, address, SSN, and direct deposit information stored securely in your payroll software. Other records needed to run restaurant payroll include tax withholding forms, Form W-4, time and attendance records, total hours worked per day and per week, pay rate, and onboarding forms.

Running your payroll with ADP RUN can take several steps, but overall, the software is straightforward to use. If you have a lot of data to migrate into ADP, the system will assist you. However, it might not be a good fit if you need more straightforward and cheaper payroll software. Having employee portals as a feature is more than a bonus, and we recommend looking for payroll software with them.

Tax filings are complex and payroll software can help sort through them, as well as automatic, electronic tax payments, which can free up a manager’s time. Paychex offers a wide range of subscription levels, with specific features added at an individual cost. Features that come at an additional cost include tax management tools, wage garnishment services, and state unemployment insurance. Some features, like paycards for your employees, can be added without additional cost. In some cases, employers in the restaurant industry can apply tips to satisfy a portion of their minimum wage obligation. This is known as a tip credit and it’s calculated by subtracting the minimum cash wage from the federal minimum wage.

OnPay’s feature set is impressive and contains everything you would expect from strong payroll software. A few users reported that, with so much going on in OnPay’s dashboard, it could be difficult to find what you’re looking for at times. As an add-on, Toast Payroll is affordable and is tailor-made to handle anything that might come up when running your restaurant’s payroll. If you’re signing up with Toast long-term, just make sure you’ve read the fine print as there are processing contracts and early termination fees.

We don’t guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services. But Inova Payroll’s most standout feature is its dedicated customer service structure. When you sign up with Inova, you’ll be assigned a dedicated customer service representative—or even a customer service team—who will get to know your business about as well as you do. When you need help, you can turn to your dedicated representative instead of waiting in an anonymous phone queue.

These prices are not displayed on the Paycor website, and are subject to change since the time of research. Also important to note, there are additional setup fees for all but the Basic plan. Paycor’s employee onboarding experience engages employees from day one.

Step 2: Calculate payroll payments for employees

Similar to Square, if you’re happy with Toast’s point of sale product, Toast Payroll should definitely be high on your list. In our evaluation, SurePayroll earned an overall score of 3.81 out of 5. The software earned high scores (4 and up) for pricing, HR tools, and reporting capabilities. It would have ranked higher on our list if it had pay-on-demand and built-in time tracking functionalities. Its low popularity scores—primarily because of having less than 1,000 user reviews in G2 and Capterra—also pulled its overall rating down. Plus, if you already have an accounting system and don’t plan to switch to QuickBooks, you’ll find more reasonably priced options for paying employees with SurePayroll, Square Payroll, and Homebase Payroll.

  • Generally, you’re better off going with payroll software that also comes with plenty of user support.
  • Another significant advantage of ADP Run is its built-in tax compliance feature.
  • Intuit has been around for decades and many people are familiar with its accounting or tax software platforms.
  • The best restaurant payroll software can handle fluctuating staffing levels, tips and time tracking in addition to basic payroll runs and taxes.

Legally, you are required to pay income taxes on your income, tipped or not. The IRS does have the right to review employer sales receipts in an audit. Eligibility for Payroll for restaurants Social Security and Medicare benefits are dependent on how much employees paid into those systems during their working career and also how much employers contribute.

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.

The Top Restaurant Payroll Software in Summary

Gusto has recently added employee time tracking and geolocation capabilities to the Gusto mobile app. With it, your employees who are handling meal deliveries can track time just as easily as your in-house servers. With affordable pricing, excellent employee benefits administration, and comprehensive payroll features, Gusto has truly earned its spot as one of the best payroll software options for restaurants.

  • Additionally, when filing taxes, local, state and federal authorities set their own schedule for when payments are due.
  • Managing payroll and benefits for employees can be a daunting task for a small business owner, but online payroll services take much of the work off your plate.
  • Similar to Homebase Payroll and Paychex, Square Payroll has an “On-Demand Pay” functionality that lets your staff access a portion of their salaries before payday.
  • Look at factors like cost, ease of use, and how much time it will take when doing your research.
  • The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters.

Based on the quote request and expanded HR services, we assume RUN Powered by ADP is one of the more expensive payroll service providers. Gusto’s mid-tier plan bundles payroll basics with timekeeping software, employee self-service onboarding, time-off requests, and PTO features. Its most expensive plan gives you access to a dedicated HR consultant and a host of HR resources. With the Square Team app, your chefs and waitstaff can update their tax info, check pay stubs, clock in and out, and specify their preferred payment method.

ADP Review: Pros & Cons of the Payroll Software for Your Small Business

Running payroll for a restaurant can be somewhat tricky compared to other businesses. 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. 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.

Payroll for restaurants

The Time & Attendance module is $5 per month, with a $1 fee for each employee. Sign up to receive more well-researched small business articles and topics in your inbox, personalized for you. Square Payroll has increased its per-employee fees, from $5 to $6 per month.

They are usually calculated as a percentage of the salaries that you pay your staff. These taxes are used to finance social insurance programs, such as Social Security and Medicare. The largest of these social insurance taxes are the two federal payroll taxes, which show up as FICA and MEDFICA on your employees’ pay stubs. The first is a 12.4% tax to fund Social Security, and the second is a 2.9% tax to fund Medicare, for a combined rate of 15.3%. Half of payroll taxes (7.65%) are remitted directly by employers, while the other half (7.65%) are taken out of workers’ paychecks.

The 411 on How to Run Restaurant Payroll

Hospitality-specific payroll software such as Back Office will save you time, increase accuracy, and keep you in compliance with complex local, state, and federal law. Back Office integrates with your POS system to make data entry a thing of the past. Additionally, it connects with your insurance, benefits, and 401k systems to eliminate manual data transfers.

Tipped workers must make at least the state minimum wage after tips, or else you, the employer, have to supplement their earnings to make up the difference. Check out the guide from the IRS for all the rules and regulations surrounding employee tips. After choosing a payroll schedule, set up direct deposits into your employees’ bank accounts.

Tax Filing and Payment

These include FICA tax, which covers social security and Medicare, and FUTA tax which covers unemployment insurance. According to the IRS, the current FICA tax rate is 15.3% of the employee’s gross pay, of which the employer and employee each pay 7.65%. The current FUTA tax rate is 6% of the first $7,000 of wages, although many businesses qualify for state tax credits that bring it down to only 0.6%. This means that it’s essential to familiarize yourself with the basic payroll concepts and regulations in order to avoid costly errors. In most states, though, Wave Payroll costs just $20 because you have to file your own payroll taxes. While Wave Payroll can calculate the tax amounts for you and even withhold them from your employees’ paychecks, you’ll have to go through the trouble of submitting the forms on your own.

To ensure tips are properly reported, make sure you have a solid tip reporting system and process in place ahead of time. Restaurant owners should make sure there is a detailed reporting system available to track how many hours each employee worked in their various positions. Running payroll for a restaurant can be a daunting process, but it doesn’t have to be. Whether you’ve just opened your first location or reached your first dozen, here is a quick reference to make sure you’ve got everything covered from being legally compliant to financially profitable.

How Katie Button redesigned their wage model to adapt post-pandemic

And when it comes to restaurants, you need to pay close attention to the dos and don’ts of labor laws. It can help you manage your employees’ benefits, as well helping you hire new employees. Gusto can also help you distribute and evaluate satisfaction surveys.

Make sure you’re familiar with the equations that apply to the various pay structures within your restaurant payroll. For more information on how these payroll platforms integrate with Clover restaurant POS systems, contact a Clover Business Consultant. Track hours worked, manage time-off requests and seamlessly integrate with payroll. If you need a total human capital management solution, Paycor has your back—which makes it a great system for larger companies, specifically franchisors.