Restaurant & Tavern TEFRA & FICA Tip Tour
Learn more about our Reasturant & Tavern TEFRA & FICA services by viewing the presentation below.
Restaurant TEFRA Service Overview
Services included:
- Track declared tips
- Track credit card tips
- Perform allocations to satisfy TEFRA using the Share of Sales method or Share of Hours Worked method
- Preparation of Form 8027
- Provide information for Form 8846
- Properly calculate all taxes related to tips
- Provide information to employees regarding all aspects of tip income via their pay stub
Tip Tracking and Reporting
Our service includes comprehensive tracking and reporting of tip information.
Example FICA Tip Income Tax Credit
| Example FICA Tip Income Tax Credit: | |
| An Employee receives $4.85 an hour, works 30 hours a week, and reports $125.00 in tips. State law follows federal law. Fed minimum wage is $5.85 an hour. | |
| Step 1. Calculate Total Reported Weekly Compensation | |
| $4.85/hr X 30 hours worked | =$145.50 |
| Reported tips $125.00/wk | +$125.00 |
| Total Reported Weekly Compensation | =$270.00 |
| Step 2. Calculate wages paid at minimum wage. | |
| $5.85/hr X 30 hours worked | =$175.50 |
| Step 3. Determine tips that exceed minimum wage. | |
| $270.00 - $175.50 | =$94.50 |
| Step 4. Determine your tax credit. | |
| $115.50 X 7.65% | =$7.23/wk |
| Your Potential Annual FICA Tip Credit per Employee (working 50 weeks)* | = $361.50 |
| *Not all businesses are eligible for the FICA Tip Credit | |
Form 8027 Filing
Helpful Tip Guides
| Helpful Tip Guides | |
| The Payroll Company TEFRA Overview | IRS Tips on Tips Guide |
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More Information
