Tips are one of those things that look simple but get tax-complicated fast. nouz handles them by category — pass-through cash tips don't enter your books at all, while service-charge tips that go through your account count as revenue with a matching staff expense.
01 What are the two kinds of tips?
- Pass-through tips — cash in the jar, given to staff at close. Never touches your bank.
- Service-charge tips — added to the card payment, deposited to your account, then paid out as additional wages.
The split matters because tax law treats the two differently, and nouz should reflect that. Pass-through tips are the staff member's money passing through your shop, so they don't enter your books at all. Service-charge tips run through your account, so they count as revenue with a matching staff-wage expense. Sorting each tip into the right kind is what keeps your P&L honest.
02 How do I handle pass-through tips?
Don't log these. They're not your money — they're the staff member's, going through your shop for ten minutes on the way to their pocket. The till total you log as cash revenue should already exclude the tips that went into the jar.
In practice: when you count out the till at close, set aside the tip jar contents before computing your gross. The gross figure you type into nouz is the post-tip-removal number — what's yours.
03 How do I handle service-charge tips?
These count as revenue — and the wages you pay out from them count as a Staff extra hours expense, so it's two entries. Log the tip as part of card revenue (it's usually already in your acquirer's daily card total), then log the payout as Staff extra hours on the day you pay it out. The net effect on EBIT is roughly zero, which matches reality; the steps are below.
- Log the tip as part of card revenue — typically already included in the day's card total from your acquirer.
- Log the payout as Staff extra hours — on the day you pay it out (usually the same week).
Net effect on EBIT: roughly zero (revenue + same expense = wash), which matches reality. Your accountant will recognise this pattern.
04 Why should I check tips with my accountant?
In particular: whether VAT applies to tips, whether they're subject to payroll tax when paid out, whether you need to track tips per-employee for tax reporting — all jurisdiction-specific. nouz is for daily P&L tracking, not tax compliance.
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