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Run the Payroll Fee Auditor →Blog · Payroll Management · Restaurant
Restaurants & Hospitality: Payroll Software vs. Managed Payroll Service (2026)
Payroll software gives a restaurant the fields; managed payroll gives it someone accountable for filling them correctly, which for restaurants means tip credit and tip pooling, high turnover and multiple pay rates configured against the rules cited here rather than left at defaults. BEG runs restaurant payroll for $45 per employee per month inside the payroll software you already use, all-inclusive, live in 3 to 5 business days.
What software leaves to a restaurant to get right
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.
An employer that takes a tip credit may require a tip pool only among employees who customarily and regularly receive tips, such as servers, bussers and service bartenders. An employer that pays a full cash wage of at least $7.25 may include cooks and dishwashers in a mandatory pool, but managers and supervisors may not receive tips from any pool.
The honest comparison
Software at roughly $40 to $150 a month plus $5 to $12 per employee handles a single-state, all-W-2, hourly-and-salary payroll well, and the customer owns every configuration decision, every deposit and every notice. Managed payroll at $45 per employee per month, with no monthly minimum, owns the configuration, the deposits, the filings and the corrections. For restaurants the deciding question is who documents the exemption status of servers and line cooks and who rebuilds the pay codes when the rule changes.
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]
- An employer that takes a tip credit may require a tip pool only among employees who customarily and regularly receive tips, such as servers, bussers and service bartenders. An employer that pays a full cash wage of at least $7.25 may include cooks and dishwashers in a mandatory pool, but managers and supervisors may not receive tips from any pool. [DOL Fact Sheet #15]
Read the full guide to fully managed versus self-service payroll, 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
What does payroll software get wrong 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.
When is software the right answer for a restaurant?
A single state, all W-2, hourly and salary pay, no tip credit and tip pooling, and under about 20 employees, where software's lower per-employee cost outweighs what a managed service adds.
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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