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A Complete Guide to Payroll and HR for the Restaurant Industry

Simplifying Compliance for Restaurants


When running a restaurant, we know that managing your employees' payroll and HR needs can be a daunting task. From ensuring compliance with state and federal regulations to keeping track of employee hours and wages, it can be a lot to handle. But with the right tools and partnership, you can streamline your processes and stay on top of everything.

Exact Payroll is a provider of payroll and HR services that can help streamline the management of your restaurant's payroll and HR needs.  We understand the unique challenges faced by restaurant owners and managers, and we are dedicated to providing a seamless and efficient experience.

We offer software solutions that automate many of the tasks associated with payroll and HR, as well as compliance resources, to help you stay up-to-date on the latest regulations and best practices.


The Basics of Payroll for Restaurants

As a restaurant owner, managing payroll can be a complex and time-consuming task. Not only do you need to keep track of employee wages and hours, but you also need to ensure that taxes, tips, benefits, and overtime pay are calculated correctly. 

Calculating Wages

Wages refer to the amount of money an employee earns for the hours they have worked. In the restaurant industry, wages can be an hourly rate, a salary, or a commission-based payment. The federal minimum wage for tipped employees is currently $2.13 per hour, but many states have their own minimum wage laws.

Calculating Tips

Tips are additional payments made by customers to restaurant staff as a way to show appreciation for good service. Tips are not considered wages, but they must be reported for tax purposes by the employee and employer. The employer must also ensure that tipped employees earn at least the minimum wage, including tips.


Federal, state, and local taxes must be withheld from employee paychecks and remitted to the appropriate government agencies. Employers are responsible for calculating the correct amount of taxes to withhold and making sure they are paid on time.


Some employers offer benefits such as health insurance, retirement plans, and paid time off. These benefits may be required by law, such as Social Security and Medicare taxes, or provided voluntarily by the employer.


Employees who work more than 40 hours a week are generally entitled to overtime pay, which is usually 1.5 times their regular hourly rate. Employers must track employee hours and ensure that overtime is calculated and paid correctly.

Managing Payroll

Managing payroll for a restaurant can be complex, but it's essential to ensure that employees are paid fairly and legally. By understanding the basics of payroll, restaurant owners can make informed decisions and streamline their payroll processes for greater efficiency and accuracy.

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Restaurants: An Overview of Needs and Challenges

Running a restaurant business can be a fulfilling and rewarding experience, but it comes with its own unique set of challenges. One of the biggest challenges faced by restaurant businesses is managing their HR needs effectively. 

Recruiting and Hiring

One of the key challenges faced by restaurant businesses is finding and hiring qualified employees. The restaurant industry is known for its high turnover rates, which can make it difficult to find and retain top talent. To address this challenge, restaurant businesses must focus on creating a positive work environment, offering competitive compensation and benefits packages, and implementing effective recruitment strategies.

Employee Retention

Employee retention is another major challenge faced by restaurant businesses. High turnover rates can be costly and disruptive, leading to decreased productivity and increased training costs. To address this challenge, restaurant businesses must focus on creating a positive work environment, offering opportunities for growth and development, and providing employees with the support and resources they need to succeed.


Effective training is essential for restaurant businesses to ensure that their employees have the skills and knowledge they need to perform their jobs effectively. This includes not only training on basic tasks like food preparation and service, but also training on customer service, safety, and compliance.

Managing Employee Relations

Managing employee relations is another important aspect of HR for restaurant businesses. This includes addressing issues like employee conflicts, harassment, and discrimination, as well as providing support and resources for employees who may be experiencing personal or professional challenges.

The Benefits of Outsourcing

Outsourcing your restaurant's payroll and HR needs can bring a range of benefits:

  1. Focus on core business: Managing payroll and HR tasks can be time-consuming and distract you from running and growing your restaurant. 

  2. Improved accuracy: Calculating payroll and managing HR tasks require attention to detail and can be complex. Outsourcing to a professional provider can help reduce errors and ensure that everything is done accurately.

  3. Enhanced compliance: Keeping up with payroll tax laws and HR regulations can be a challenge, particularly for small businesses. Outsourcing to a provider like Exact Payroll can help ensure that you are meeting all the requirements and avoiding costly penalties.

  4. Access to expertise: A professional payroll provider brings expertise and experience to the table, providing you with access to knowledgeable professionals who can offer guidance on best practices.

  5. Improved employee satisfaction: You can provide your employees with a high level of support and improve their satisfaction with your business.

  6. Cost savings: Outsourcing can be more cost-effective than hiring an in-house team or managing these functions yourself. This is particularly true for small and medium-sized businesses that may not have the resources to invest in these areas.

By partnering with Exact Payroll, you can streamline your processes and focus on what really matters - running and growing your business.


Additional Resources


Restaurant Compliance Guide

Ready to ensure your restaurant is compliant with the latest regulations? Download our comprehensive Restaurant Compliance Guide now and stay ahead of the game. 

Our guide covers the following:

  • Hiring Practices
  • Tipping
  • Overtime
  • Insurance
  • and more...

Onboarding Checklist for New Employees

Employee onboarding is one of the most essential processes for retaining new talent. Your managers will dedicate several hours to training the employee, and your human resources department will spend hours doing new hire paperwork.

Our onboarding checklist will help ensure that you start your employee off on the right foot so that they reach their full potential and your company achieves maximum productivity.

Running a restaurant is challenging; managing payroll and HR doesn't have to be.

Our team specializes in providing tailored payroll and HR solutions to restaurants of all sizes.

Book an appointment today to discuss how we can help streamline your operations, reduce costs, and improve employee satisfaction.

Let's work together to make your restaurant business run more smoothly.

Schedule your appointment now!

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