The One Big Beautiful Bill Act made salons, spas, barbershops, nail salons, and esthetics businesses eligible for the FICA Tip Credit for the first time.
But the credit only works if payroll is set up to capture it. Tips have to run through payroll. Roles have to be classified correctly. Hours have to be tracked by role for anyone who wears more than one hat. Miss a step, and the credit disappears.
This guide walks through exactly what qualifies, what doesn't, and the five things payroll has to be doing to claim it.
What you'll get:
A plain-English breakdown of the FICA Tip Credit and what changed in 2025
Eligibility rules so it's clear who qualifies and who doesn't
The five payroll requirements that determine whether the credit is captured or lost
Key thresholds and numbers
A warning on the one mistake that turns a tax credit into a wage violation
