If you are a large food and beverage establishment, and you do not have a good faith agreement in place for allocating tips to your employees, you will need to follow a specific process to figure out the allocations.
The following case study takes you step-by-step through this process.
Sydney's Seafood is a large food and beverage establishment that has chosen to make tip allocations using its actual payroll period and gross receipts attributable to employees.
The establishment had gross receipts of $200,000 for a payroll period and reported tips of $12,400. Directly tipped employees reported $11,400 of the total, and indirectly tipped employees reported the remaining $1,000.