Toast Payroll: Review Tips Earning Codes
Last updated: Apr 8, 2026, 10:06 AM
Tips in Toast Payroll
Tips are voluntarily provided by customers for service provided. Tips can include cash received directly from customers, tips from other employees under any tip-sharing arrangement, and credit card tips that are distributed to the employee.
Tips appear in Toast Payroll by using (at least) one of three different methods. See Toast Payroll: Manage and Integrate Tips for more details. No matter which method is used, tips will always appear with an earning code. The earning code will delegate, among other things, the source of the tips and if the tips should be paid through payroll or not.
Earning codes for tips typically come in the form of Tips Paid and Tips Owed, although you may customize and use additional codes as well (see New Earning Code Request). You may even have Tips Owed - Cash, Tips Owed - Credit Card, Tips Paid - Cash, and Tips Paid - Credit Card to further breakdown the source of the tips.
Tips Paid - Earning Code
Tips Paid is the most common earning code used for tips that an employee has already received, such as cash tips paid out after a shift. The earning code is used for reporting and taxation purposes. These tips will not be paid out on a payroll run as they have already been received by the employee. They appear on the paystub (aka check stub or wage statement) in order to properly account for them as taxable income. If you see an earning code named Tips Paid - Cash, Tips Paid - Credit Card, Gratuity Paid - Cash, Gratuity Paid - Credit Card, or CC Tips Paid, the same logic applies even though tips and mandatory gratuity are not the same (Get Started With Service Charges and Mandatory Gratuity).
Tips Owed - Earning Code
Tips Owed is the most common earning code used for tips which an employee has not yet received, such as credit card tips which have not yet been issued to an employee. This earning code will generate funds for the employee to receive from the payroll run. Some alternate names of this code include Tips Owed - Cash and Tips Owed - Credit Card.
Other Tips Earning Codes
Toast Payroll allows you to create your own earning codes to be used in the system. To set up a custom earning code, send this form to us by selecting the blue support button in the lower-right corner of any Toast Payroll page.
Additional Resources for Tips and Payroll
- Toast Payroll: Manage and Integrate Tips
- Tips Manager With Toast Payroll
- Toast Payroll: Get Help With Tip Credit and Tip Makeup
- Toast Payroll: Get Started With Earning Codes
This content is for informational purposes and is not intended as legal, tax, HR or any other professional advice. Please contact an attorney or other professional for advice.