Employee claiming too much tips.

I have an employee that has been increasingly claiming entirely too much for his tips. It’s starting to get out of control (pushing $40 an hour). I know this isn’t possible. I’ve been doing this a long time. They don’t make that much.

How the hell do you go about handling that? It’s hard to say, “What did you make on that run??” or, call the customer and ask what they tipped…

The system just asks them at checkout and they essentially enter whatever they want. Worked fine for me for a long time this way, but now all the sudden, this?

Are you able to track it to the price of the products the employee delivered/sold and see if that ratio makes sense.

What is work flow at your business ? Pizza delivery, sit in restaurant?

If you file for the IRS tip credit when you file your business taxes you will get back the employers share of the Social Security and Medicare tax on tips above minimum wage. In Florida, tips are not subject to workers comp, I’m not sure if that’s universal or not. With these factors, who cares what he claims? Once you file taxes, you’re back to where you would be if he claimed the bare minimum he had to claim. If I had to guess, he is claiming more so that he can show income to help him qualify for a mortgage or auto loan. I don’t see why else he would overstate his tips.

I have had drivers in the past intentionally report high tips. They where all trying to prove credit worthiness to buy a house/car etc. As long as it doesn’t impact you, who cares ?

I had a guy doing that a couple of years ago. We just told him it wasn’t allowed and he stopped.
We were not interested in paying the taxes on his inflated income.

Yup… same here.
But, if I remember correctly, there was a tax hit on us.