Level 2

Question

Indirect Tips Payroll Code Issue

Forum|Forum|17 days ago
July 9, 2026
2 replies
137 views

I have a question regarding tip payroll codes. There are two types of tips: direct tips received by employees and indirect/paycheck tips paid through payroll. When I use code 12TP, the tip amount is added to gross pay and deducted from net pay, which works for direct tips but not for paycheck tips. Is there another code for indirect tips that will report correctly on W-2 Box 7 and Box 12 while also including the tip amount in the employee’s paycheck calculation? If not, can you create a code for indirect tips?

Level 3

I’m having same issue. Thanks for bringing it up!

Moderator

Please see other related conversation here.

askquesionAuthor

Level 2

I wasn't asking about RTP, 12TP, or 12TT. I've already read those articles, and they didn't address my issue. That's why I'm asking here.

Code 12TP only works for direct (cash) tips.

What I need is a payroll code for indirect (paycheck) tips that reports correctly on W-2 Box 7 and Box 12.

For example:

Wages: $100
Indirect (paycheck) tips: $50

Expected:

Gross Pay: $150
Net Pay: $138.53

Actual with 12TP:

Gross Pay: $150
Net Pay: $88.53 (the $50 tip is deducted from net pay as if it were a direct tip)

Is there an existing payroll code for indirect/paycheck tips? If not, could you please add a code that handles indirect tips correctly?

Please don’t remove or change 12TP, as it works correctly for direct tips. I just need and additional payroll code for Indirect tips.

Moderator

Hi @askquesion this conversation might be helpful. For more assistance with indirect tips, we’d connect with EasyACCT Support.

AndresEscalante

Level 2

That answer was years ago before 12TP.