The FICA Tip Credit is essentially free money from the government that you can claim based on the tips your employees report.
The credit is a way for the government to provide relief to businesses in the food and beverage industry, such as restaurants, bars, and breweries.
Before this credit was introduced, the IRS estimated that only about 15% of tip income was reported. By offering the FICA Tip Credit, the government encourages businesses to report tip income accurately, reducing the payroll tax burden on these establishments.
Using our FICA Tip Calculator is quick and easy. Just input your average hours worked per week, average hourly rate, and average reported tips per week for the average employee.
Our FICA Tip Credit Calculator will then do the rest, calculating your annual savings per employee.
