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Run the Payroll Fee Auditor →Blog · Payroll Management · Restaurant
Restaurants & Hospitality: Payroll Software vs. Managed Payroll Service (2026)
Restaurants evaluating payroll options typically compare managed payroll service against payroll software. Here is the honest comparison.
Managed payroll service (like BEG) means a provider processes payroll for you. You submit hours and changes; they handle the rest including tax deposits, compliance, and year-end forms.
Payroll software (Gusto, ADP Run, Paychex Flex) means you run payroll yourself using a platform. You are responsible for configuring it correctly and keeping up with compliance changes.
Side-by-Side Comparison for Restaurants & Hospitality
| Payroll Task | Managed Payroll | DIY Software |
|---|---|---|
| Tip credit and tip pooling setup | Configured for you | You configure |
| Tax deposits | Handled | You are responsible |
| Compliance updates | Applied automatically | Your responsibility |
| Multi-state filing | Included | Varies by plan |
| Year-end W-2s | Included | Included or add-on |
| Payroll errors | Provider corrects at cost | Your cost to fix |
| New hire onboarding | Handled | You set up |
Which Is Right for Restaurants & Hospitality?
For most restaurants under 100 employees, managed payroll wins on total cost and compliance coverage. The tradeoff -- giving up direct software access -- is outweighed by removing the compliance risk that comes with self-managing tip credit and tip pooling, high turnover, multiple pay rates, split shift premiums.
Payroll software makes sense if you have dedicated in-house HR staff with genuine expertise in Restaurants & Hospitality payroll compliance, prefer hands-on control, and have a low tolerance for vendor dependency. These are real advantages, but they come with real responsibility.
Managed Payroll, Handled.
BEG manages payroll at $25-$45 per employee per month, all-inclusive. Get an instant cost comparison for your business.
Frequently Asked Questions
How do you handle tip credit for tipped employees?
Tip credit is configured per state. We calculate whether each employee received enough tips to bring total compensation to minimum wage per pay period. Where no tip credit exists, tipped employees are paid at full minimum wage.
How do you handle multiple pay rates for the same employee?
An employee working as a server at one rate and a shift supervisor at a different rate is set up with dual rate codes. Overtime is calculated at the blended rate across all hours worked in the week.
How do you handle tip pooling under FLSA?
Post-2018, tip pools can include back-of-house employees in non-tip-credit states. We track pool contributions and distributions and produce the required documentation.
What does BEG charge for restaurant payroll?
Restaurant payroll runs at $25-$45 per employee per month. Tip credit tracking, tip pooling distribution, and multi-rate pay are all included. For a 25-employee restaurant, that is $625-$1,125 per month.
Related Resources
Anthony leads payroll solutions at Business Executive Group, a national managed payroll firm serving businesses across industries including Restaurants & Hospitality. BEG manages payroll at $25-$45 PEPM, all-inclusive, with deep expertise in compliance, multi-state filing, and industry-specific payroll requirements. Get instant pricing at beghr.com.
Authoritative source: U.S. Department of Labor: Wage and Hour Division
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