Tips and gifts

[evo]

I have been receiving over payments on invoices as tips. Say a bill comes out to $706.58 I occasionally get a check for $806.58 with instructions to split it between myself and employee. However since it's not cash or a separate check how to account for this?
I have created a new line item or service in my software (Jobber) for tips which are exempt from sales tax to make the accounts balance. Then I just deem it income, and for the employee I pay a bonus at the end of the week to avoid workman's comp tax (WA state workman's comp is based off of hours worked, but still pay feds).
I know this is more so a question for my accountant, but wondering what others do in these cases.

 

[Evan Sussman]

We do the same as far as recording them. Depending on the project I do or don't share the tip with the team. I've had a job where I felt like it was a pity tip after we spent way too long on a project because I'd sent an apprentice up and he was spinning his wheels, the client knew it took way too long...

Cash tips I always share.