Feature Request: Allow employee to be paid $0 and that employee's tips to be recorded on W-2

When running payroll, some tipped employees are recieving negative amounts because their paycheck amount is lower than their tax liability.

currently all employees are paid out non-cash tips at the end of their shifts and declare their cash tips seperately. Their wage is 2.13 an hour so servers who are making far more money in tips dont have enough on their paycheck (2.13 * Hours Worked) to cover their tax liability.

In other payroll systems the check would simply be issued at $0.00 and the difference is ignored and only the entire sum of the paycheck is withheld for taxes, and their tax witholdings are adjusted accordingly. Its on employees to pay the taxes they owe come tax time

How can I solve this serious issue WITHOUT paying out non-cash tips through paychecks?

A specific issue like this won't be able to be handled on this user-driven support forum.  your best bet is to call Square or contact them via email from your dashboard.  I don't know if Square payroll has a different support line but here is the general Square customer support information.

https://squareup.com/help/contact

Click "Other"

Click "I don't see my issue"

Click "Call Support"

Write down your Customer Code

Call 1  855  700  6000

Hi @Eltoroloco

I was able to check in with our Payroll team and they got back to me with the following that addresses what you're seeing: 

The cash tips you’ve included in your payroll run are causing an error because there aren’t enough wages from which the employee’s taxes can be withheld. You’ll see an error if the funds deposited aren't enough to cover the taxes.

With the Cash Tips column, no funds are actually deposited into your employee’s bank account – the amount you report is used to calculate and withhold taxes from the employee’s total pay. If the taxes for these cash tips exceed the amount of gross pay, you’ll receive an error. We're not able to debit or collect additional funds from the employee for the tax due.

To avoid this issue in the future, you may want to enter the employee’s tips as Paycheck Tips. The amount entered in this field will be taxed accordingly and included in your employees’ paychecks.

EJ, the liability is still on the employee to pay taxes.  The cash tip amount should correctly pass through the payroll run and be recorded on the employee's W-2. At the end of the year that employee will pay the taxes owed on those tips. Square needs to fix payroll to allow this to happen. 

Would anyone like to address this? 

@Helen @JustinC 

@kellyj 

@nika 

This seems like a topic best addressed via a conversation with our Payroll team, @KalebCIvil.

When you have a moment, please reach out directly by logging into your Square account and heading here. They can address any questions you may have about this topic.

Tried many times, no resolution.  Ran payroll yesterday and had the issue/flaw again.