Steps: Set Up Payroll for Tip Wages and Taxes (USA)

Set up Workday to:

Pay tips employees receive through pooled tips or tips added to credit card payments.

Report taxes paid on tips.

Employer-controlled tips must be paid as well as reported for taxation. To add tip earnings to the Gross pay accumulation:

Access the

Edit Pay Accumulation

task and select

Gross

Select Employer Controlled Tips [USA]
in the

Adds to Pay Accumulation > Pay Component Groups

field.

Security: Set Up: Payroll (Calculations - Payroll Specific)
domain in the Core Payroll functional area.

(Optional) Configure payslips for tips to have OASDI taxable wages displayed separately.

Access the

Maintain Payroll Payslip Configuration

task.

Add the Workday-owned OASDI Tip Tax [USA] - Taxable Wages
pay component related calculation to the Subject or Taxable Wages

Payslip Group

Security: Set Up: Payroll (Reporting)
in the Core Payroll functional area.

When you run a pay calculation for an employee, the administrative payroll results display:

The employer-controlled tip wages and associated taxes on the

Gross to Net

tab in the

Others

section.

The employee-reported tip wages and associated deductions on the

Additional Pay Components

tab in the

Others

section.

The employee payslip displays:

Employee-reported wages as OASDI Tip Tax [USA] - Taxable Wages
, when configured.

Employer-controlled wages and taxes aggregated with other compensation, such as Base Pay.

If there’s insufficient Net, Workday reports uncollected taxes in boxes 12A and 12B on the worker's W-2.

Run payroll.

View payroll results, payslips, and tax filing reports and correct any discrepancies before completing a payroll.