HR Software for Hotels and Restaurants 2026

§1Tipped employee payroll complexity

ADP

Gusto

Rippling

BambooHR

Few industries deal with a federal tip credit that lets employers pay tipped staff a $2.13/hour cash wage and count up to $5.12/hour in tips toward the $7.25 federal minimum, tip pooling rules that vary by state, FICA tip credit calculations on employer tax returns, and IRS Form 8027 for large food and beverage establishments. A block of West Coast and northern states run their minimum wage laws with no tip credit at all, so a multi-state chain needs payroll software that applies the correct rule per location rather than one blanket calculation (see the FAQ below for the full list).

Tip pooling itself is still governed by the 2018 FLSA amendment: an employer that takes a tip credit can only pool tips among servers, bussers, and other staff whose work is traditionally tip-based, while an employer that pays the full minimum wage with no tip credit can widen the pool to kitchen and other non-tipped roles too. What changed since this page was last updated is the federal test for how much of a tipped employee's shift actually counts toward the tip credit, covered next.

§2The 80/20/30 rule is gone: what changed for tip credit compliance

No new rate changed in 2024. What changed, and arguably matters more to restaurant payroll than any rate adjustment would have, is that the DOL's 80/20/30 rule went away. That regulation required employers to track, minute by minute, whether a tipped employee spent more than 20% of their workweek (or more than 30 continuous minutes at a stretch) on non-tipped "side work" like rolling silverware or wiping down tables; time over those thresholds had to be paid at full minimum wage, not the tip-credit rate. On August 23, 2024, the Fifth Circuit vacated the rule in Restaurant Law Center v. U.S. Department of Labor, holding it was arbitrary and inconsistent with the FLSA's text [Fifth Circuit opinion, Restaurant Law Center v. DOL, 2024-08-23]. The DOL didn't appeal; it formally withdrew the 80/20/30 rule on December 17, 2024, and reverted to the pre-2021 "dual jobs" standard, which asks only whether the non-tipped work is part of the tipped occupation or performed within a reasonable time immediately before or after tipped duties, with no percentage or minute count to log [DOL field guidance withdrawing the 80/20/30 rule, 2024-12-17].

The Fifth Circuit's ruling technically applies nationwide as a matter of the DOL's own withdrawal, but whether a court outside the Fifth Circuit (Texas, Louisiana, Mississippi) would treat the vacatur as binding precedent, versus simply persuasive, remains legally unresolved as of 2026 [Fisher Phillips, "Tip Credit Tips Ahead of the Summer Season," 2026]. The practical upshot for payroll software: you no longer need a system that logs side-work minutes against a 20%/30% ceiling, but you still need one that can flag a shift where non-tipped work stopped being "part of the tipped occupation" altogether, since that older dual-jobs test never went away, it's just the only test again.

§3POS-integrated payroll options

Toast Payroll is designed for restaurant groups already on Toast POS. Hours, tips, and tip pools flow from Toast POS into Toast Payroll automatically. Toast's published pricing for new, single-location customers runs roughly $69-110/month base plus $9/employee/month; existing accounts and multi-location groups get a custom quote, and Toast does not publish add-on module pricing, which is the most common complaint in reviews [multiple 2026 Toast Payroll pricing breakdowns cross-checked, including Workstream and SelectHub]. On G2, Toast's product line holds roughly 4.2/5 across about 350 reviews, with the POS-to-payroll tip sync and restaurant-specific workflow praised consistently, and the lack of a free trial and higher subscription cost versus generalist payroll tools cited as the main drawbacks [G2, Toast reviews, checked 2026-09].

Square Payroll costs $35/month plus $6/employee/month for W-2 staff, or $6 per contractor paid with no monthly base fee for contractor-only businesses, materially cheaper than Toast at small headcounts. It holds roughly 4.2/5 on G2 (31 reviews), and Capterra data shows food and beverage as one of its largest user segments; reviewers with multi-year restaurant use specifically cite running payroll for 10+ workers in under 10 minutes once tip data is in [G2 and Capterra Square Payroll reviews, checked 2026-09]. Tip handling is solid but the feature set is thinner than Toast's, there's no restaurant-specific labor cost dashboard the way Toast's ecosystem offers.

If you use a different POS (Lightspeed, Aloha, Micros), the integration options narrow considerably. You may end up exporting tip reports and importing them into ADP or Gusto manually each pay period, which is exactly the manual reconciliation work POS-native payroll is built to remove.

§4Hotels and larger hospitality groups

Hotels add scheduling complexity that a single restaurant doesn't have: front desk, housekeeping, food and beverage, maintenance, and management all run on different schedules and pay structures, often at multiple properties under one ownership group. ADP Workforce Now and Paylocity are built for multi-department scheduling and reporting at this scale, and both offer property- or cost-center-level rollups that a single-location tool like Toast Payroll isn't designed for.

Rippling is increasingly used by hospitality management groups running multiple properties, largely because of its IT provisioning module: system access can be tied to a specific property while payroll and HR data roll up centrally. Rippling's pricing is modular and mostly quote-based rather than published (see our Rippling pricing breakdown for what real customers report paying), and it has no native tip-pooling engine or property-management-system integration comparable to Toast's or Square's, a real gap for a hotel's food and beverage outlet even though the IT and multi-property HR features are genuinely strong.

BambooHR does not handle tipped employee payroll well. It is an HR information system, not a payroll-first tool, and hospitality payroll is too complex for BambooHR's payroll module, so hospitality groups that like BambooHR for its HR workflows typically run payroll through a separate, hospitality-capable system alongside it rather than through BambooHR itself.

See also: employee scheduling software, HR software for nonprofits, best payroll software for restaurants.

§5Form 8027: the aggregation rule most operators miss

Form 8027 is the IRS filing that kicks in once a food or drink venue crosses the "large establishment" line: consumption on premises, tipping as the norm, and a headcount that ran above 10 workers on a typical business day during the prior calendar year. The IRS doesn't actually count heads for that threshold; it converts staffing into hours and generally treats an establishment as "large" once aggregate employee hours worked exceed 80 hours on a typical business day [IRS, 2026 Instructions for Form 8027]. A restaurant that looks small by headcount but runs long shifts across several roles can trip the threshold well before it feels like a "large" operation.

The rule most multi-unit operators miss: if a single owner or entity runs more than one food or beverage establishment, the IRS aggregates employee hours across all of them, including managers, when applying the 10-employee test. A restaurant group with three modest-sized locations that would each individually fall under the threshold can still be required to file Form 8027 once their combined hours are counted together. Payroll and reporting software that tracks locations as separate cost centers without rolling hours up to the ownership entity can miss this, so confirm with whoever prepares your 8027 how your specific locations are being aggregated before assuming you're exempt.

§6Frequently asked questions

What is the federal tipped minimum wage in 2026? The federal cash wage for tipped employees remains $2.13/hour, with employers allowed a tip credit of up to $5.12/hour to bring that up to the $7.25-an-hour federal floor. If an employee's tips plus the $2.13 cash wage do not add up to at least $7.25 in a pay period, the employer must make up the difference that same period [DOL, 2026]. Seven states ban the tip credit outright and require the full state minimum wage regardless of tips: Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington.

Can back-of-house staff legally be included in a tip pool? It depends on whether the employer takes a tip credit. If the employer skips the tip credit and every worker is paid the standard minimum wage outright, kitchen staff such as line cooks and dish crew can be included in the tip pool. If the employer takes a tip credit, the pool must be limited to employees who customarily and regularly receive tips, such as servers and bussers [DOL, 2025].

Can a manager or supervisor take a share of the tip pool? No. The DOL reaffirmed in January 2025 that employees who meet the FLSA's executive duties test, meaning they qualify as managers or supervisors, cannot receive tips from a mandatory tip pool, even if they occasionally perform tipped work themselves.

Is the 80/20/30 rule still in effect in 2026? No. A federal appeals court struck the rule down on 2024-08-23, and by 2024-12-17 the DOL had made the withdrawal official, reverting to the older, simpler "dual jobs" doctrine: an employer can keep claiming the tip credit for non-tipped work as long as that work is closely tied to the tipped role or happens right around a tipped shift, with no 20%-of-week or 30-continuous-minute clock to run. Whether the ruling is binding outside the three states covered by that court is still legally unsettled, but the DOL's nationwide withdrawal means the percentage test is gone as a practical compliance matter everywhere.

Does IRS Form 8027 apply to every restaurant? No, only to establishments the IRS classifies as large based on staffing, generally where combined staff hours cross roughly 80 on an ordinary working day (the rough equivalent of a payroll past the ten-employee mark), measured against the prior year's actual staffing pattern. If one owner runs multiple locations, hours are aggregated across all of them for this test, so a chain of smaller locations can still owe this filing even though each individual site looks too small on its own. Form 8027 reports total sales and tips and is used by the IRS to check whether reported tip income looks reasonable relative to sales.