Check the box on line 7a, b, or c to show the method used. To allocate tips by the hours-worked method, follow the steps for the gross receipts method below. Line 7b - Gross receipts method. Subtract from the amount figured in step 1 the total amount of tips reported by employees who were tipped indirectly for the payroll period. Indirectly tipped employees do not receive tips directly from customers.
Examples are bussers, service bartenders, and cooks.
Directly tipped employees, such as waitstaff and bartenders, receive tips directly from customers. Employees, such as maitre d's, who receive tips directly from customers and indirectly through tip splitting or pooling, are treated as directly tipped employees. From the amount figured in step 1, subtract the total tips reported by both directly and indirectly tipped employees. The result is the amount that has to be allocated among the directly tipped employees who had a shortfall for the payroll period as figured in step 4. The result is the amount of allocated tips for each directly tipped employee.