2025 Guide
Restaurant Payroll & Compliance Software
Paying people accurately and on time is non-negotiable — but restaurants face unique rules:
tips and tip credit, split shifts, minors’ hours, breaks, overtime, and multi-location taxes.
The right software automates calculations, filings, and record-keeping so you stay compliant without drowning in admin.
Common Payroll Pain Points in Restaurants
- Manual time cards: missing breaks, rounding errors, buddy punching.
- Tip handling: distributing tips fairly; tip credit compliance.
- Overtime & shift premiums: misclassifications create liabilities.
- Multi-location taxes: different rates, filings, and deadlines.
- Record retention: audits require clean, accessible histories.
Core Features You Need
- Time & attendance: photo/geo clock-ins, break attestation, OT rules.
- Tip management: tip pooling/service charge allocation with audit trail.
- Automated tax filings: federal/state/local registrations and returns.
- Pay options: direct deposit, earned-wage access, paper checks.
- Integrations: import approved hours from scheduling; sync changes in rates/roles.
- Self-service portal: employees get pay stubs, W-2/1099 or local equivalents.
- Multi-entity support: franchises or multiple LLCs from one dashboard.
Weekly Payroll Workflow (End-to-End)
- Approve time: managers resolve exceptions (missed breaks, OT alerts).
- Import to payroll: approved hours + tips + differentials sync from scheduling.
- Run preview: check labor % vs sales, OT totals, and tax withholdings.
- Finalize & pay: direct deposits scheduled; checks printed if needed.
- File taxes: software prepares and files returns automatically.
- Archive records: pay stubs and reports stored for audits.
Handling Tips, Service Charges & Overtime
- Tip pooling rules: define eligibility (FOH/BOH) per local laws; keep audit trails.
- Tip credit: ensure base wage + tips ≥ minimum; make-up pay if short.
- Service charges: treat consistently; separate from gratuities where required.
- Overtime & double time: set rules by jurisdiction; flag split-shift premiums.
Compliance & Record-Keeping
- Right-to-work & age docs: store securely; track expirations.
- Break attestation: capture confirmations to reduce disputes.
- Policy acknowledgments: handbook receipts, tip-pool agreements.
- Audit reports: who edited hours, when, and why.
- Retention schedules: keep payroll/tax docs for required periods.
Recommended Payroll Platforms for Restaurants
| Platform | Best For | Key Features | Pricing | Try |
|---|---|---|---|---|
| Toast Payroll & Team Management | Restaurants on Toast POS | Tip pooling, OT, POS-native reporting, time tracking | Add-on to Toast | See Toast Payroll |
| Gusto | SMB restaurants needing simplicity | Automated filings, benefits, contractor + W-2, integrations | Per-employee pricing | Try Gusto |
| ADP RUN | Growing teams needing compliance depth | Robust payroll, time, compliance add-ons, multi-state | Quote-based | Learn More |
| 7shifts + Payroll add-ons | Teams already on 7shifts scheduling | Time clock, labor % control, push to partner payrolls | Tiers + add-ons | Explore 7shifts |
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Roll-Out Checklist (30–60 Minutes)
- Connect time & scheduling system (import approved hours).
- Set OT, break, minor, and tip rules per jurisdiction.
- Add pay schedules, pay methods, and bank accounts.
- Bulk import staff; invite to self-service portal.
- Run a test payroll preview; verify totals vs. prior cycle.
- Enable automatic tax filings and archive old reports.