The 5 Best Restaurant Payroll Software to Consider

TL;DR: Restaurant payroll software allows operators both big and small to pay staff, calculate overtime schedules and tips, and automate tax filings to maintain compliance. Choosing the right platform for your restaurant requires an understanding of key features and specific needs.

• Why it matters: Labor costs absorb 25%–40% of your revenue. In addition, payroll errors compound fast, whether through missed tip credits, overtime miscalculations, or late tax filings. The right software protects your margins and your team.
• Who this is for: Restaurant owners and operators evaluating payroll software for the first time, or those questioning if their current platform can keep up with their growth.
• Who can skip this: Enterprise restaurant groups with a dedicated payroll team and a locked-in HR tech stack. This one is for operators still building out their systems.
• What you'll walk away with: A clear picture of which restaurant payroll platforms are worth your time, what features matter, and how to pick the right solution for your needs.
• Best next step to take: After reading, audit your current payroll process and note where errors or manual work show up most often. This list will become your shopping checklist.

Once you have this tool, you'll be able to manage employee wages and taxes in less time. You'll also maintain compliance, which can be difficult in the restaurant industry. After all, employees make money in different ways—their hourly wage, tips, overtime, and so on. 

You need to properly compensate your team, while adhering to all local, state, and federal laws. It's not easy! 

Fortunately, the best restaurant payroll software will streamline these processes and let you focus on what you do best: making great food and satisfying hungry customers. This article will help you choose the right tool by highlighting key features, comparing vendors, and more. 

What is Restaurant Payroll Software and Why Does It Matter? 

Restaurant payroll software is a digital tool that helps restaurant owners and/or managers pay staff, automate tax filings, and maintain compliance. 

Restaurant payroll software is different from standard payroll processing tools—though it serves a similar purpose. Basically, both tools will help you pay employees, but restaurant payroll software is specifically designed for the restaurant industry. As such, it includes features for tip reporting and distribution, shift scheduling, and compliance with food-related labor laws. 

At the end of the day, restaurant payroll software improves efficiency and reduces errors, both of which lead to more revenue, fewer fines, and greater employee satisfaction. 

7 Key Features to Look for in Restaurant Payroll Software 

Restaurant payroll software is important, but which one should you use? We'll talk about specific solutions shortly. First, let's cover key features to look for in an application. 

1. Automated Wage, Tip, and Overtime Calculations

Your payroll provider should automatically calculate hourly wages and overtime pay for each employee. It should also have a tip pooling feature, so that your staff is properly compensated. These features will do two things: free you up to focus on other tasks and ensure compliance. Failing to comply with minimum wage and tip credit laws could result in hefty fines. 

2. Time and Attendance Tracking Integration

Automated payroll processing is essential, but it won't work if your accounting software can't integrate with your POS and time-tracking systems. How else will the tool know how many hours each employee works or the tips they collected during that time? To ensure accurate employee payments, choose restaurant payroll software that integrates with the POS and time-tracking tools you use. This includes biometrics time clocks and mobile punch-in apps. 

3. Tax Compliance & Automated Filing

If you're like most restaurant owners, you don't really understand the United States tax code. Restaurant payroll software will cover your blind spots by automating federal, state, and local tax filings. How so? By automatically deducting applicable taxes from employee paychecks, generating W-2 and 1099 forms, and ensuring efficient payroll management. 

4. Direct Deposit and Multiple Payment Options

Labor costs typically account for 25-40% of restaurant revenue. You can streamline these payments by investing in restaurant payroll software that offers direct deposits. If possible, choose a tool that also features pay cards and same-day payments, so you can provide a better experience for employees. After all, employees that enjoy their jobs work harder and generate higher customer satisfaction scores. Happy employees tend to stick around for longer too, which will reduce your hiring expenses and put more money back into your pocket. 

5. Multi-Location and Franchise Payroll Management

What if you own multiple locations? Before the technology boom, it was difficult to manage payroll. These days, restaurant payroll software makes it easy by centralizing the payroll process and ensuring all staff are paid accurately and on time. Look for a cloud-based payroll system that can handle multiple locations, as well as seasonal staff fluctuations. 

6. Employee Self-Service Portals

What does workforce management mean to you? If your answer revolves around employee scheduling and payroll calculations, you're missing a golden opportunity. 

A focus on employee experience will improve team efficiency, customer happiness, and staff retention. The right restaurant payroll software helps with this by offering employee self-service portals. That way each employee can access pay stubs, update banking details, and manage tax forms when needed. Plus, self-service portals reduce HR’s workload, which will save you time and money. 

7. Compliance with Labor Laws and ACA Requirements

Lastly, invest in restaurant payroll software that complies with labor laws, Affordable Care Act (ACA) requirements, and overtime regulations. This will help you avoid fines, while maintaining a happy and thriving workforce. Double points if your payroll software automates this process, because your record will be more accurate and, therefore, audit-ready. 

The 5 Best Restaurant Payroll Software Platforms to Consider 

Every restaurant is different. The payroll processing tool that works for one establishment might not work for another. That said, one of the five solutions below should fit your needs. So, without further ado, here are the best overall payroll software solutions for restaurants: 

1. ADP: Best for Multi-Location Restaurant Businesses

ADP is a powerful software option for restaurant businesses. Use it to process payroll, complete HR-related administrative tasks, and ensure compliance management. One of the best things about ADP is that it can handle multiple locations. As such, it's a strong option for large restaurant businesses that need to track time, pay, and otherwise manage a multi-faceted staff. 

• Features: Direct deposit, W-2 and 1099 forms, tax filing, multi-location management, new hire onboarding, employee discounts, background checks, full HR suite 
• Pricing: Custom pricing based on specific business needs 
• Integrations: QuickBooks, Xero, Wave, ClackShark, AllGeo, Instant, and more 

2. Gusto: Best for a Complete, Easy-to-Use HR Platform

Gusto is a full-service HR software for the restaurant and hospitality industry. With it, users can track employee hours, run payroll, ensure proper benefits administration, hire and onboard new staff members, and generate detailed reports. Even better, employees can do this without reading a 1,000-page manual. Gusto is super easy to set up and use. 

• Features: Hiring and onboarding tools, employee hours and tips tracking, compliance for complex pay structures, workers compensation, employee self-service tools 
• Pricing: Prices range from $49/month and $6/user to $180/month and $22/user 
• Integrations: QuickBooks, FreshBooks, Xero, JazzHR, Shopify, 7shifts, and more 

3. OnPay: Best for Small Businesses and/or Tight Budgets

Do you manage a small, one-location restaurant business? Maybe you manage two or three locations, but you're short on cash. Either way, consider OnPay. This app includes full-fledged payroll services, simple HR software, and even the ability to offer benefits packages. 

• Features: Overtime and tips, direct deposit, automated tax filings, self-service onboarding tools, an HR platform, workers compensation and benefits administration 
• Pricing: $49/month and $6/user 
• Integrations: QuickBooks, Xero, Guideline, TurboTax, When I Work, and more 

4. Square Payroll: Best for Square Point of Sale Users

Thousands upon thousands of restaurants use Square to accept payments via the company's popular POS system. Many businesses use it for important financial management tasks too. Are you one of them? Then consider Square Payroll, which offers a full-service payroll app that will integrate seamlessly with your POS system and give you a bunch of other benefits. 

• Features: Timecard and tips importation, W-2s and 1099s, automated payroll, employee onboarding, benefits packages, taxes and compliance 
• Pricing: $35/month and $6/user 
• Integrations: Square POS, QuickBooks, Acuity Scheduling, KioskBuddy, and more 

5. QuickBooks Payroll: Best for QuickBooks Accounting Software Users

QuickBooks is one of the most popular business applications in the world. Those that use it for accounting purposes should consider it for payroll processing as well. The integration between the two apps is seamless, and users get access to valuable team management tools. 

• Features: Automated payroll features, time tracking, W-2 and 1099s, next-day direct deposit, self-service employee portals, workers comp and benefits administration 
• Pricing: Prices range from $50/month and $6/user to $130/month and $11/user 
• Integrations: QuickBooks, Square, PayPal, Shopify, Gusto, and more 

How to Choose the Right Payroll Software for Your Restaurant 

We know what you're thinking, "The payroll software options above sound great. How do I actually choose the best solution for my restaurant?" This four-step process will help: 

Identify Your Payroll Needs 

Don't choose the most popular payroll software; choose the solution that fits your needs. Consider the size of your business, the number of employees you have, and the compliance requirements in your local area.  

For example, a regional restaurant chain with 20 locations and hundreds of hourly employees shouldn't invest in payroll software for small businesses. The opposite is true as well. Avoid enterprise software if you have one location. Ask yourself, "What payroll features do I actually need?" Then choose an app that has them. 

Compare Pricing and Subscription Models 

Once you've identified your needs, determine your budget. How much can you spend on restaurant payroll software? Most solutions will accomplish the basics: time tracking, tip reporting, payroll taxes, and so on. Don't stretch your budget for additional features that aren't strictly needed. At the same time, realize the right software will automate time-consuming processes and ensure compliance. 

These features will increase your revenue and profit potential. So, if a payroll processing app won't break the bank, but will improve operations, it's worth it. One more thing: while most payroll software is sold via monthly subscription, some tools can be purchased for a one-time fee. The first option is more affordable in the short term but will cost more. The second option is the reverse. The choice is up to you. 

Evaluate Integration Capabilities 

Payroll software is important, but it's not the only tool you use to run your restaurant. Because of this, choose a payroll processing tool that integrates with your current tech stack. 

For example, you might use Square POS to process payments. If so, choose payroll software that connects to Square. The same goes for your accounting software, HR management system, and other essential tools. Make sure everything connects. 

Prioritize User Experience and Customer Support 

Finally, look for a tool that's easy to use and has a stellar customer support team. Restaurant payroll software should make your life easier. This won't happen if you have to wrestle with the app every pay period. 

But even the best payroll processing tools can be confusing. When this happens, great customer support will make sure you are back up and running in no time. To evaluate ease of use and customer support, sign up for free trials. That way you get first-hand experience with each tool and can determine if it's easy to use. 

We also suggest reading online reviews. What do past and current customers think of the support team? 

Frequently Asked Questions About Restaurant Payroll Software 

Have more questions about restaurant payroll software? Discover our own answers below.

What percentage should payroll be for a restaurant? 

Average payroll costs in the restaurant industry are between 25% and 40% of the total revenue. But the kind of restaurant you own/manage should determine your labor costs.

For example, quick service restaurants should keep payroll below 25%, casual dining restaurants should keep payroll below 30%, and fine dining restaurants should keep payroll below 35%. This should help your establishment reach profitability, but you need to run your own numbers to make sure. 

What is the best payroll software specifically designed for restaurant operators?

The "best payroll software" depends on your restaurant's size, budget, and existing tech stack. However, certain platforms stand out for restaurant-specific needs.

Gusto excels at tips, complex pay structures, and compliance for small to midsize operators. Square Payroll works best if you already run Square POS. ADP is a strong choice for multilocation businesses that need centralized payroll across dozens of units.

OnPay and QuickBooks Payroll offer simplicity and tight accounting integration. Each platform covers core restaurant requirements. Your decision will boil down to the tools you already use and the number of locations you manage.

How does restaurant payroll software handle tip reporting, overtime, and split shifts?

Restaurant payroll software pulls tip data directly from your POS system and applies it toward minimum wage calculations, tip pooling rules, and IRS tip reporting requirements. For overtime, the software tracks weekly hours per employee and calculates time-and-a-half automatically once a worker crosses the applicable threshold, which varies by state.

Split shifts add another layer since some states require a split-shift premium when an employee's two shifts don't run consecutively in a single workday. Quality restaurant payroll platforms flag these scenarios and calculate the correct pay, eliminating the need for extensive manual reviews.

What is the difference between restaurant payroll software and a general small business payroll platform?

A general small business payroll platform handles standard employee pay: Hourly wages, salaries, direct deposit, and basic tax filings. Restaurant payroll software does all of that, plus handles the industry-specific complexity that general platforms miss. Said complexities include tip credit tracking, tip pooling and distribution, tipped minimum wage compliance by state, split-shift premiums, and integration with restaurant POS and scheduling systems.

Restaurants also deal with more hourly workers, seasonal fluctuations, and multi-role employees who might work different jobs in the same week. A general payroll tool can technically process those checks, but it will require more manual input and leaves more room for compliance errors. Restaurant-specific platforms have the capability to catch these gaps.

How does restaurant payroll software integrate with POS and scheduling systems?

Most restaurant payroll platforms connect to POS and scheduling systems through direct integrations or application programming interface (API) connections. When the integration works, timecard data, tip amounts, and shift details flow automatically from your POS and scheduling tool into payroll, removing the need to reenter hours or import tips manually at the end of each pay period.

The depth of integration varies by platform and depends on your specific POS brand and scheduling software. Before committing to a payroll platform, make sure it supports your current tools.

How much does restaurant payroll software cost per month for a single-location operation?

Most restaurant payroll platforms for a single-location operation cost $35–$75 per month, plus a per-employee fee of $6–$12 per month. Often, these prices cover payroll processing and tax filings, but add-ons like benefits administration, workers' compensation, and human resources (HR) tools cost more.

Upgrade Your Payroll Solution 

The right payroll system will increase team efficiency, reduce compliance errors, and improve employee retention metrics. As such, it's an important tool for all restaurateurs. 

To choose the best restaurant payroll software for your establishment, identify your needs, determine your budget, evaluate integration capabilities, and prioritize the user experience and customer support offerings. Then select a solution that meets your criteria and get back to work. 

Ready to streamline more of your restaurant operations? Paytronix has tools to power all of your customer experience initiatives. Book a demo today.