Technicians & TIPS

[bensurdi]

So obviously technicians get tips - but now that we're growing as a company things are becoming a bit more complicated than they used to!

Here is my question:

lets say you have a $500 job. The client decides to tip the tech $150. But adds the tip into the total invoice making the invoice $150 higher than it really is. The tech adjusts the invoice and creates a line item called "tip" and than lets the office manager know about the tip.

Now.... times that scenerio by 10+ technicians and you've got yourself a bookkeeping nightmare!

What is your policy for accepting tips? How do you pay the technician the tip? Just write them a personal check?

Thanks

 

[Becker]

The topic should not be that hard to figure out.

Tips in carpet cleaning are not rare. But not an every job occurrence.

Consider wait staff. Nearly every ticker.
Or look at a poker dealer.
You'll need to track the tips and withhold taxes.

But really if you are using good accounting software. And a proper payroll system what's the big deal?

 

[bensurdi]

So what you're saying is that they should be paid that tip in their paycheck through payroll and be taxed on that tip amount?

The issue is that when you are running your books, and your system is telling you that $780 came in on a job but really $680 came in (100 of it was a tip) than it causes an issue because than the office manager has to reopen the invoice, expense that tip portion of the invoice into a separate expense account and still write a check from the company account to the employee (which also has to be expensed as to why its not being included in payroll if you choose to do so) but if you are including it in their payroll than the technician gets pissy because they are getting taxed on that income etc.

It's not as easy as it seems.

 

[Becker]

Does the receipt at a restaurant have a line that sez tip.

A tip is considered income. Waitresses and dealers or people whom are heavily tipped often get such low paycheck because so much of the low wage job is tip based and taxes on tip must be paid.

That money is passing though your accounts either as checks or credit. You going to pay the taxes on money that is not your companies?

 

[Becker]

Ask an accountant. But check and cc tips should be paid out with pay checks minus taxes. Cash tips, do they pocket it and don't say a word? I don't know. That said. I don't know how you pay your employees. But if you are paying out tips with pay check it should be considered additional over and above hourly pay, commission, or salary.

You think waitresses are paid much? He'll they don't care what they make per out if they are getting good tips. But you think those tips are not being claimed?

I play Texas holdem.
A dealer will get 1-3-5-10 in tips per hand. How many hands do you think a good dealer deals with a 2 deck table? You think he cares about payday? No. Most if it is eaten up in tips.

Deal with it how you want. Establish a tip policy. Can your company keep a portion of tips that are received via credit card? Maybe. 2-3% can add up. But is that an employee perk.

 

[Desk Jockey]

I hate when they add it to the check and don't tip them cash.

Fortunately it doesn't happen that often and very fortunately it's NEVER anywhere near that kind of money. $5.00 $10.00 bucks at most! I just cut them a check so I have a record of it and suck it up.

However if you're really suffering though that kind of tip money with that many technicians I'd call your accountant immediately. That shit can get out of control fast and turn a positive into a real negative.

 

[Scott Rogers]

if they are routinely getting 30% tips, i would investigate closer. what are they giving away to get the tip? Its not uncommon for techs to knock out a bunch of Upholstery or a couple extra rooms for tip money.

 

[Desk Jockey]

Several years ago we had a new tech that a little too much personality. Good cleaner but judt talked too much and got too personal.

He was knocking down tips consistently which does happen as frequently as he was getting them. Turns he like to give the invoice and collect the check. What he was doing was while they were making out the check, he would say "they do allow us to accept tips". Whuut a dumb mofo!

We canned him.

 

[idreadnought]

Our techs get tips all the time and it is ok to include them on the invoice. We separate the part that is a cleaning charge and a tip charge. Our payroll service has a line item for tips and we include it on the checks. Yes they get charged taxes, but somebody has to pay them if revenue is coming into the company. My best guy earns about a hundred a week in tips, half cash the other half are included on checks and credit card. The real sucky thing is credit cards. We have to pay 3% processing charge for the techs tip. Oh well if he is getting tips then the customers must be happy

 

[TomKing]

We include it in the techs commission for the pay period. We pay the employer side

I really cant believe anyone would worry about the CC charges or the taxes you have to pay. Those are just the costs of running a business honestly and correctly. I want my techs to behave in a manner that reflects well on our company at all times. How we handle tips and being honest sets the tone for the level of honesty I can expect.

When my techs get a tip it is a indication that my tech did a great job and performed at the level we want. I hope they get tips everyday and I have to pay lots of CC charges and taxes. The more that happens the better my company is doing.

riichards guy was probally one in a million on the bad side of things.

Ben So do you have 10 techs? If not how many? How big is your problem really at this point in your companies growth?

 

[Desk Jockey]

Tom you are right in 46-years of business he was the first to do that. Sad part is it was working for him, too good. He stuck out from the pack.

My guys do great work and get great compliments on their QC cards but tips are infrequent, maybe a couple of times a month.

If my guys were consistently getting tips that large, I'd restructure their pay so it was like a waiter or waitress. Low base pay and tips make the largest part of your pay. Hell with those kinds of tips and their regular pay their might be making more than owner.

 

[renegade_cowboy]

$150 tip on a $500 job.. anyone say red flag? Didn't you have an issue same time last year when you had $25,000 in CC transaction fee's? ..

 

[The Great Oz]

Here is my question:

lets say you have a $500 job. The client decides to tip the tech $150. But adds the tip into the total invoice making the invoice $150 higher than it really is. The tech adjusts the invoice and creates a line item called "tip" and than lets the office manager know about the tip.

I agree the tip amount is a red flag that there's some cheating going on. I'd pay close attention to time spent at that jobsite. I feel the same way about a tech that has too many customers that refuse to allow anyone else do their cleaning.

As far as the tech getting upset about having taxes taken out, you can tell him that's the law and he's supposed to declare any cash tips to the IRS as well. If they want to pocket cash tips that's up to them, but I'd fire any dumbass that complained that you won't get involved in helping them cheat on their taxes.

What is your policy for accepting tips?

Politely refuse the tip. The tech lets the customer know that he is well compensated and a lot of what they paid for their cleaning is for his salary. Accept a tip only if the customer continues to insist.

How do you pay the technician the tip? Just write them a personal check?

If the tip runs through your books you'd better handle it correctly and make it part of their paycheck. You'll pay the penalties when you get audited, and then the techs will get audited and pay penalties of their own.

 

[rhino1]

If they got a tip that large, I would damn sure follow up with the customer to ensure that it was not a mistake or something else was afoot. I had a guy claimed he got a $50 tip from a customer, turned out he told them some sad BS story about his life and they felt sorry for him. Of course he was looking for a job after that. Some guys will do a "free ' rug or room and churn pretty good tips, tips that should have been billable charges. You have got to stop that kind of stuff quickly or it is costly.

Does the tech who gets tips expect YOU to pay taxes on them so he doesn't have to? I might take the time to explain it to him one time.

 

[Desk Jockey]

It might be time to can them all and start over with some tighter controls in place.

Some people will take advantage of you if they know it's easy, where as they may not even consider it if it's more difficult.