Skip to main content

«  View All Posts

4 Key Pain Points a Payroll Company Should Solve for Restaurant Owners 

October 18th, 2023 | 4 min. read

By TJ Noa

I imagine that the first time I flew in a plane, apart from when I was too young to remember much, it must have been clear that I was essentially a first-time flier. I listened to the entire flight attendant safety spiel, read the whole safety insert, and was floored that I got free soda.

After flying several more times, I quickly became accustomed to the in-flight services that I could expect and stopped paying as much attention to the flight attendants. I was able to learn more about what I found disappointing on a flight and was able to appreciate what was exceptional about one. Despite an airplane ride no longer being a novelty, I am grateful that my experience helps me determine whether or not I like one particular airline over another.  

The ability to discern between two similar offerings is a powerful tool for shoppers. If you don’t have a lot of experience working with multiple payroll services, you may not know what makes each service better or worse for your company. When you run a small business, like a restaurant, you don’t have the luxury of extra time to test and compare services. However, there are four things you as a restaurant owner should expect your payroll service to help with:  

1. Paying your people accurately and on time 

2. Acquiring and onboarding talent 

3. Reporting for compliance and tax credit maximization 

4. Tracking accurate labor costs. 

Let’s explore each of these further.  

Paying Your Staff Accurately and On Time 

Getting employees paid correctly and on time is payroll 101 and is the bare minimum any provider should deliver. For restaurants, this is especially crucial – if an employee’s check is late or inaccurate even once, they may quickly look for work elsewhere. Staff retention is already difficult in the restaurant industry, so payroll mistakes become just one more obstacle to retaining staff.  

If a mistake is made, the payroll company should have processes to resolve it as soon as possible. Part of this comes down to how responsive is your provider when you actually need the support. You shouldn’t have to wait on hold for an hour when you need solutions within minutes. Reliable customer service is essential to ensure accurate, on-time payroll every period.  

quick payroll customer service at Whirks

Hiring Talent and Onboarding Them Quickly 

Hiring and retaining reliable employees is notoriously difficult for restaurants. Managers often end up having new staff work shifts before fully onboarding them into the payroll system. Without proper training in processes, this can lead to paperwork and compliance issues down the line when it’s time to start paying the new hire.  

A good payroll provider should offer services to simplify hiring and onboarding. The best-case scenario would be integration with an applicant tracking system (ATS) to easily post job openings on relevant job boards and collect new hire paperwork electronically. This automated process could guide new staff through digitally completing all documents needed for payroll, tax compliance, and more. It can also screen applicants for tax credits like the Work Opportunity Credit (WOTC). WOTC is a credit given to employers that hire workers that are harder to hire like having a felony record or lacking work experience. If your electronic onboarding process includes a WOTC screening, you could save thousands of dollars on qualified hires. 

Want to learn more about WOTC? Click here.  

Reporting for Tax Compliance and Tax Credit Maximization 

There are two items a restaurant owner wants to gain insight from their payroll report: wage compliance and tip credit optimization. As the owner, it is ultimately your responsibility to ensure that all staff are earning at least federal or state minimum wage, whichever is higher. You also need to accurately track and report tip credits for your tax preparer.  

Does your current payroll provider offer detailed reports to confirm minimum wage compliance for each employee? Do they also calculate and track tip credits to optimize what you can claim? When you have workers earning a tipped wage, it’s easy for someone to unintentionally slip through the cracks and be paid under minimum wage. Comprehensive compliance reports save you major headaches and potential fines down the road if wage issues are found.  

Additionally, you look to acquire a report that calculates the total tip credit you can claim. It can be a lot of work to calculate manually, and therefore, it is easy to make a mistake. Using a report will help you track and report every dollar accurately, saving you even more money and giving you the peace of mind that the calculations are done well. 

[fl_builder_insert_layout id=9297]

Tracking Accurate Labor Costs 

The final thing that payroll can help you with is tracking labor costs. Understanding how much labor is costing you is crucial for setting budgets, profit goals, and even menu prices. Without this insight, you might never be able to determine when you will be profitable. Accurately tracking labor can be tricky when you have employees working multiple roles at different pay rates, a common scenario for many restaurants. Splitting time across server, bartender, and hostess duties at varying wages can complicate your payroll. If you have an employee who fills multiple roles and receives a different wage for each role they work, your payroll system should have an efficient way to accommodate that need. 

An ideal system should efficiently handle wage splitting and provide reports to break down labor costs by location, department, job type, and more. Having a single payroll system that can efficiently solve these issues provides a strategic advantage for your restaurant when it comes to making financial decisions around labor. This is something a lot of restaurants miss when it comes to payroll. We wrote a different blog about the most common mistakes that restaurant owners make with payroll, so implementing a solution will give you a great edge. 

How to Choose a Payroll Company that Alleviates These Pains 

Like choosing an airline, you want a payroll provider that delivers the full scope of services, features, and support levels that meet your unique needs. Evaluating providers in-depth takes significant time and effort - a luxury most restaurant owners lack. Switching services down the road due to hidden frustrations can cause major disruptions. 

Beyond base payroll accuracy and direct deposit, examine their full suite of offerings through a restaurant owner lens. Do they provide exceptional customer service if issues arise? Do they offer simplified hiring and onboarding processes? What about compliance reports, tax credit optimization, and labor cost analysis? If you're interested in learning more about how Whirks' restaurant-focused payroll service can benefit your business, don’t hesitate to schedule a call with us. We're happy to show you how we make restaurant owners' lives easier and alleviate your pains.