Best Restaurant Payroll Software (2026): Tips, Tip Credits and POS Sync
We compare Toast Payroll, Square Payroll and Gusto for restaurants: tip tracking, tip makeup to minimum wage, multiple pay rates, POS sync and real cost.
Restaurant payroll is where general payroll software falls down. A server earns a tipped cash wage on Friday, covers the bar on Saturday at a different rate, and splits a tip pool with the kitchen on Sunday. If her tips fall short of minimum wage one week, you owe the difference. Get tips, tip credits or overtime wrong and the result is a wage claim, not just an annoyed employee.
We compared three payroll options restaurants use most, two tied to a POS and one standalone, on how well they handle hourly staff and tips.
Our picks at a glance
3 tools compared- ★ Best for Toast restaurants
Toast Payroll
Hours, tips and tip pools flow straight from the Toast POS into payroll.
Quote onlyVisit - Best value with a Square POS
Square Payroll
Imports timecards and tips from Square, at a low monthly price.
$35/mo + $6/personVisit - Best standalone payroll
Gusto
Tip credit and tip makeup calculations, with 7shifts and Upserve integrations.
$49/mo + $6/personVisit
Quick comparison
| Software | Price | POS sync | Tips | Support | Link |
|---|---|---|---|---|---|
| Toast Payroll | Quote only | Toast POS, built in | Tips and pooled tips to paychecks, tip makeup | Chat and phone, 7 days | Visit ↗ |
| Square Payroll | $35/mo + $6/person paid | Square POS timecards | Direct-tip tracking and import | Payroll specialists, weekdays 6am to 6pm PT | Visit ↗ |
| Gusto | $49/mo + $6/person (Simple) | Integrations (7shifts, Upserve) | Tip tracking, tip credit, makeup alerts | Phone and chat | Visit ↗ |
How we chose
A restaurant’s payroll needs to:
- Pull hours and tips from the POS or scheduling tool, without re-keying.
- Handle tip credits and tip makeup so tipped staff always reach minimum wage.
- Pay multiple rates for staff who work more than one role, with correct overtime.
- Distribute pooled tips through payroll instead of cash at closing.
- File federal, state and local payroll taxes automatically.
We read each provider’s pricing and restaurant pages. Where a vendor does not publish prices, we say so. Read more about how we review.
The best payroll software for restaurants
Toast Payroll
Best for restaurants already running Toast POS
What we like
- Hours, breaks, shift edits and tips sync straight from Toast POS
- Multiple pay rates per employee and overtime across locations and job types
- Tip makeup to minimum wage and pooled tips paid through payroll
- Payroll Care Team by chat or phone 7 days a week
Watch out for
- No public price; you need a demo and quote
- Built for restaurants on Toast's platform
- Pay Card and PayOut are available to Toast Payroll customers only
- Pricing
- Quote only
- POS
- Toast, built in
- Tip pooling
- Via Toast Tips Manager
- Support
- Chat and phone, 7 days
If you run Toast POS, Toast Payroll removes the most error-prone step in restaurant payroll: moving hours and tips from the POS into payroll. Timesheets are embedded in payroll, and Toast handles restaurant-specific cases such as a server who steps behind the bar at a different rate, overtime across locations and job types, and tip makeup to minimum wage.
With Toast Tips Manager, pooled tips can go to employee paychecks instead of cash at closing. Employees see pay, benefits and tips per shift in the MyToast app, new hires complete paperwork on their phones, and proactive alerts flag missing Social Security numbers, auto clock-outs and unapproved tips before you run payroll.
Which plan to pick: Toast sells payroll with its POS and quotes it individually. Ask for the price with and without Tips Manager.
Watch out for: lock-in. Payroll, POS and tips all live with one vendor, which is convenient but makes it harder to switch any single piece later.
Square Payroll
Best for cafes, counter-service and small restaurants on Square POS
What we like
- Lowest published full-service price in this guide
- Imports timecards from Square POS or the Square Team App
- Direct-tip tracking and import, with labor cost reports including tips
- Multistate payroll, multiple pay rates and overtime calculations
Watch out for
- Support is weekdays only, 6am to 6pm Pacific
- Paper W-2s and 1099s cost $3 per mailed form
- Works best if you already use Square POS
- Full-service
- $35/mo + $6/person paid
- Contractor-only
- $6/person paid
- Pay options
- Check, direct deposit or Cash App
- Support
- Weekdays, 6am to 6pm PT
Square Payroll is the obvious choice for a cafe or small restaurant already on Square. Hours come in from Square POS or the Square Team App, direct tips are tracked and imported, and labor cost reports show wages and tips together. Square calculates, withholds and files federal and state payroll taxes, including state unemployment, and handles multiple pay rates, overtime and multistate payroll.
You pay only for people you actually pay each month, which helps seasonal businesses. Employees can be paid by check, direct deposit or Cash App, with instant access for those who use Cash App.
Which plan to pick: full-service payroll at $35 a month plus $6 per person paid. The contractor-only plan is only for businesses with no W-2 employees.
Watch out for: support hours. Payroll specialists are available on weekdays, which can be a problem if you run payroll on a weekend.
Gusto
Best for restaurants that want payroll separate from their POS
What we like
- Calculates tip credits and alerts you when you owe tip makeup
- Time tracking with multiple pay rates and locations per employee, overtime and tip tracking
- Integrates with 7shifts and Upserve
- Employees self-manage onboarding, tip reporting and time-off requests
Watch out for
- Does not file Form 8027 automatically
- Time tracking and multi-state payroll need Plus ($80/mo + $12/person)
- POS hours come through integrations rather than natively
- Simple
- $49/mo + $6/person
- Plus
- $80/mo + $12/person
- Premium
- $180/mo + $22/person
- Contract
- Month-to-month
Gusto is the strongest option if your POS does not include payroll, or if you want payroll to stay independent of your POS vendor. It handles the restaurant-specific rules: it calculates tip credits against state and local minimum wages and tells you when you need to make up the difference before you run payroll, and it files federal, state and local taxes each payroll.
Its time tracking supports multiple pay rates and locations per employee, overtime and tip tracking, and it connects to 7shifts for scheduling and Upserve for POS data.
Which plan to pick: Plus if you want Gusto’s own time tracking or have staff in more than one state. Simple works if hours come in from 7shifts or another integration.
Watch out for: Form 8027. If you are a large food or beverage establishment, Gusto helps you prepare the annual tip report but does not file it automatically.
Which one should you choose?
- You run Toast POS: Toast Payroll, so hours and tips never leave one system.
- You run Square POS and want the lowest price: Square Payroll.
- You want payroll independent of your POS, or use 7shifts: Gusto.
Whichever you choose, check how your state treats tip credits before you set cash wages, and run a test payroll with a slow week’s tips to confirm tip makeup is calculated the way you expect.
More for restaurants: website builders for restaurants that take reservations and online orders.
Frequently asked questions
What makes restaurant payroll different?
Tips. Restaurants report tip income, may pay tipped staff a lower cash wage using a tip credit, and must make up the difference when tips fall short of minimum wage. Staff also work different roles at different pay rates in the same week, and overtime has to be calculated across all of them. Restaurant payroll software handles these calculations and pulls hours and tips from the POS.
Should I use my POS company's payroll?
Often, yes. Toast Payroll and Square Payroll pull hours and tips directly from their own POS systems, which removes manual entry and reduces errors. If your POS does not offer payroll, or you run several concepts on different systems, a standalone payroll service such as Gusto with a POS or scheduling integration works well.
How much does restaurant payroll cost?
For 15 employees, Square Payroll costs about $125 a month ($35 plus $6 per person paid) and Gusto Simple about $139 ($49 plus $6 per person). Toast quotes Toast Payroll prices individually.
Does payroll software file Form 8027?
Not always. Gusto says it does not file Form 8027, the annual tip report for large food and beverage establishments, automatically, but it helps you fill it out. Ask any provider how it handles Form 8027 before you sign up.