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Restaurants & Hospitality: Managed Payroll for Small Businesses (Under 25 Employees) (2026)
Managed payroll for a small restaurant is a complexity decision, not a headcount one: at $45 per employee with no monthly minimum a 10-person restaurant pays $450 a month, and the case for it is strongest once tip credit and tip pooling or a second state is in the picture. BEG: $45 per employee per month inside the payroll software you already use, live in 3 to 5 days.
What managed payroll costs a small restaurant
At $45 per employee per month with no monthly minimum and no setup fee, a 5-person restaurant pays $225 a month, a 10-person one $450 and a 20-person one $900, all-inclusive. The cost grows one employee at a time, so there is no headcount to wait for. Payroll software at roughly $40 to $150 a month plus $5 to $12 per employee is cheaper in raw dollars for a single-state, all-W-2, hourly-and-salary payroll. The question is whether this restaurant is that payroll.
The complications that decide it for restaurants
A tipped employee is one who customarily and regularly receives more than $30 a month in tips. An employer taking a tip credit must pay a direct cash wage of at least $2.13 per hour and may claim a tip credit of up to $5.12 per hour against the $7.25 federal minimum wage, and overtime for tipped employees must be calculated on the full $7.25 minimum wage, not the cash wage.
Tip credit and tip pooling, high turnover, multiple pay rates and split shift premiums: each is a pay code that self-service software ships blank, and each is a place a small restaurant with no payroll specialist gets it wrong for years before an audit or a wage claim finds it. One of these, or an employee in a second state, or a first garnishment order, is the point where the managed price stops being a premium.
What a small restaurant is already subject to
Restaurants and fast food businesses with annual gross sales of at least $500,000 across one or more establishments are covered by the FLSA, and employees who handle goods moving in interstate commerce, such as a server processing a credit card transaction, are individually covered.
Below 50 employees the federal lines already crossed are e-filing at 10 information returns, OSHA logs at 11 unless the industry is on the exempt list, Title VII and the ADA at 15, and the ADEA and COBRA at 20. None of them wait for a payroll department to exist.
The rules behind this page, with sources
General information, not legal advice. Every rule below was read on the agency page linked next to it.
- A tipped employee is one who customarily and regularly receives more than $30 a month in tips. An employer taking a tip credit must pay a direct cash wage of at least $2.13 per hour and may claim a tip credit of up to $5.12 per hour against the $7.25 federal minimum wage, and overtime for tipped employees must be calculated on the full $7.25 minimum wage, not the cash wage. [DOL Fact Sheet #15]
- Restaurants and fast food businesses with annual gross sales of at least $500,000 across one or more establishments are covered by the FLSA, and employees who handle goods moving in interstate commerce, such as a server processing a credit card transaction, are individually covered. [DOL Fact Sheet #2]
Read the full guide to managed payroll by company size, and the rest of the restaurant payroll library.
Managed Payroll, Handled.
BEG manages payroll at $45 per employee per month, all-inclusive. Get an instant cost comparison for your business.
Frequently Asked Questions
Is managed payroll worth it for a restaurant under 20 employees?
When there is a complication: tip credit and tip pooling, a second state, a garnishment, or a classification question about servers and line cooks. Without one, software is the cheaper price for a simple payroll and this page says so.
What does a 10-person restaurant pay?
$450 a month: 10 employees at $45 per employee, all-inclusive, with no monthly minimum and no setup fee.
Which restaurant rule most often breaks a self-service setup?
A tipped employee is one who customarily and regularly receives more than $30 a month in tips. An employer taking a tip credit must pay a direct cash wage of at least $2.13 per hour and may claim a tip credit of up to $5.12 per hour against the $7.25 federal minimum wage, and overtime for tipped employees must be calculated on the full $7.25 minimum wage, not the cash wage.
What does managed payroll cost for a restaurant?
$45 per employee per month, all-inclusive, inside the payroll software you already use, with no monthly minimum. Tip credit and tip pooling, high turnover and multiple pay rates are configured at setup, not billed as add-ons.
Related Resources
Anthony leads payroll solutions at Business Executive Group, a national managed payroll firm serving businesses across industries including Restaurants & Hospitality. BEG manages payroll at $45 PEPM, all-inclusive, with deep expertise in compliance, multi-state filing, and industry-specific payroll requirements. Get instant pricing at beghr.com.
Authoritative source: U.S. Department of Labor: Wage and Hour Division
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