Tip reporting compliance, the FICA tip credit, and food cost tracking for restaurants and cafes.
Restaurants and cafes run on thin margins, cash and card transactions that need to reconcile perfectly, and a payroll structure built around tipped employees that most bookkeeping systems handle poorly by default. Hasco Tax Advisors works with restaurant and cafe owners on tip reporting compliance, food cost tracking, and the specific payroll rules tipped employees create.
Employers can generally take a "tip credit," paying tipped employees a lower direct cash wage as long as tips bring them up to at least the standard minimum wage. This requires accurate tip reporting from staff and specific recordkeeping that, if incomplete, exposes the business to back-wage liability during a Department of Labor audit.
Restaurants can claim a federal income tax credit for the employer-paid FICA taxes on tips that exceed the amount needed to bring an employee's wage up to the federal minimum. This credit is frequently missed by restaurants that do not have payroll systems specifically configured to track it.
Food cost as a percentage of sales is one of the most important numbers in restaurant management, and it requires tracking inventory of perishable goods accurately, not just entering vendor invoices as they arrive. Waste, theft, and portioning issues all show up as an inflated food cost percentage if inventory is not tracked closely.
Whether prepared food, alcohol, and to-go orders are taxed, and at what rate, varies meaningfully by state and sometimes by locality. Getting this wrong on a POS system's tax configuration compounds into a real liability over a full year of sales.
Daily POS sales reconciled against actual bank deposits, separating card fees, tips, and refunds correctly rather than treating deposits as revenue.
Payroll configured correctly for tip credit compliance, with the FICA tip credit captured rather than missed.
Inventory and food cost percentage tracked closely, so you can spot waste, theft, or pricing issues before they erode your margin.
POS sales tax settings reviewed against your state's specific rules for prepared food, alcohol, and to-go orders.
Tip compliance, food cost tracking, and POS reconciliation, built specifically for how restaurants actually run.