The Payroll Blog

News, tips, and advice for small business owners

How to Talk to Restaurant Employees About Payroll

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Stephanie Davis

Several waiters setting up tables in an empty restaurant.

When staffing your restaurant, it’s important to have a smooth onboarding process for your employees. Because the restaurant industry operates differently, it’s safe to assume that your new employees are going to have questions about how, and when, they are going to get paid. Answering these questions at the start of employment will help avoid payroll mistakes, and complicated (and awkward) questions, down the road.

Payroll Forms

To process payroll, you will need every employee to fill out Form W-4. Form W-4 documents your employee’s information, including name, address, Social Security Number, marital status, the total number of allowances, along with other items. With this form, as an employer, you can withhold federal income tax from each paycheck accurately.

Another necessary form for employees is Form I-9 for employment eligibility. Form I-9 is used to show that your employee is a U.S. citizen. Paperwork included often includes passports, drivers license’s, and Social Security cards for proof.

Once you have these forms filed for your employee, you’ll be able to talk about the other items regarding your restaurant payroll. Wages for Restaurant Employees

Every employee wants to know how much money they will be making while they work. With restaurant employees, the rules can become a bit more confusing depending on whether or not your employee is tipped. For your employee to be considered a tipped employee, they must earn more than $30 per month in tips at your restaurant. In that case, the hourly wage earned is typically less than the federal minimum wage, as employees are expected to make up their wages in the tips they receive.

If your restaurant does not have tipped employees, you are required to pay at least the federal minimum wage. Minimum wage rates do vary by state, so it’s important to know what the rate is for your state.

Payroll Schedules

After how much money they will make, employees want to know when they will get paid. There are four types of payroll schedules: weekly, bi-weekly, semi-monthly, and monthly. While there are pros and cons to all of the options, both for you and your employees, choosing a payroll schedule isn’t always in your control as a small business owner. Some states have specific rules for when employees need to be paid, or they could give business owners several options to choose from. For example, in Illinois, employees must be paid at least semi-monthly and not more than 13 days following the close of a pay period, while in Idaho, wages must be paid at least once in a calendar month and not more than 15 days following the close of a pay period.

Direct Deposit vs. Physical Check

The final common restaurant payroll question you’ll run into with employees is how they will be paid. Today, direct deposit is the norm. Some business owners even require that employees use direct deposit since it tends to be the easiest option for all parties involved.  However, you may choose to distribute paper checks or even cards with their paycheck loaded onto them. Whatever the rule is for your restaurant, have the plan and paperwork ready to discuss with your new employee. 

Bottom Line

While you may receive additional questions from employees about payroll, by discussing these points upfront, you’ll be honest and transparent with your employees and avoid a majority of awkward payroll conversations. While you are ultimately in control of the payroll, you will need some cooperation and understanding from employees to minimize the chance for mistakes. If you have an employee handbook, it would be the perfect place to store some of this payroll information so your employees can refer to it.

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This website contains articles posted for informational and educational value. SurePayroll is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, SurePayroll. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant. If you require legal or accounting advice or need other professional assistance, you should always consult your licensed attorney, accountant or other tax professional to discuss your particular facts, circumstances and business needs.