Got a new client - small limousine business. Question is regarding gratuities. If the company charges, let's say $300 for a job and in addition, collects a 15% in the form of a gratuity ($45) for the driver, how is the gratuity booked? For example, is the total sale $345? If so, is the gratuity when paid to the driver an expense to the company? Is the gratuity subject to payroll taxes and reported on the driver's W2? I'm looking for an IRS publication or other information that goes into some detail on how to handle payroll for this type of situation. Thanks for any thoughts or suggestions.
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Originally posted by Hoosier View PostGot a new client - small limousine business. Question is regarding gratuities. If the company charges, let's say $300 for a job and in addition, collects a 15% in the form of a gratuity ($45) for the driver, how is the gratuity booked? For example, is the total sale $345? If so, is the gratuity when paid to the driver an expense to the company? Is the gratuity subject to payroll taxes and reported on the driver's W2? I'm looking for an IRS publication or other information that goes into some detail on how to handle payroll for this type of situation. Thanks for any thoughts or suggestions.ChEAr$,
Harlan Lunsford, EA n LA
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