This article introduces the new, unified Tip Management system designed to make tip tracking more accurate with payroll. The Overview Dashboard aligns with your existing Pay Periods and allows you to track all paid tips in 7shifts. This change ensures accurate tracking and easier reconciliation for you and your team.

Key Updates 

The most important updates focus on alignment and cumulative tracking:

• Unified Pay Periods

  Tip tracking now follows your regular pay periods instead of a separate “Tip Period” (the cycle you use for time clocking and payroll). This eliminates misalignment and confusion, creating one consistent cycle for tracking pay in 7shifts.
  

• 'Show Outstanding Tips' setting

  Admins can now use the Show outstanding tips toggle to choose between tracking tips as a cumulative running total or viewing only the tips earned within a single pay period. This setting allows you to control whether historical unpaid tips carry over as debt or remain hidden to simplify your dashboard and exports. Learn more here: 'Show outstanding tips' setting

  

• The Running Total (Cumulative Tips Ledger)

  If Show outstanding tips is enabled, the system uses cumulative tip tracking to ensure you never lose visibility of what is owed to your team between pay periods. 

  • Cumulative Tip Tracking: Tips can now be tracked as a running total until they are fully paid out, rather than only within a single pay period.
  • Outstanding Tips Column (New!): This column displays the historical balance of unpaid tips from prior pay periods that are still owed to the employee. 

  • Reconciling External Payments: If you pay tips outside of 7shifts (cash or external payroll), and you have Show outstanding tips enabled you must manually record paid tips using the Mark tips as paid to keep totals accurate. This prevent tips from incorrectly carrying over from one period to the next. Full instructions are provided below.
     

    ⚠️ Note: External Payroll refers to any payroll system that is not 7shifts Payroll (including direct payroll integrations and payroll exports). If you are using an external system, you must manually record paid tips to keep your ledger accurate.

  
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• Tip Pool Settings Change

  Any changes to Tip Pool settings only apply going forward from the current pay period. Historical reports are not affected.
  

• Tip Data Lock

  • The manual Lock Pay Period button has been removed.

  • The option to have cumulative tip tracking is available if the Show outstanding tips setting is enabled. With this setting enabled, Outstanding tips are carried forward until paid. You can now reconcile these tips in the Tip Management Overview by using the Mark tips as paid button while viewing the specific pay period when the tips were earned.
    
    

'Show outstanding tips' setting

New! Admins now have the flexibility to choose how tip data is displayed and tracked across the Tip Overview dashboard with the Show outstanding tips setting. 

If the 'Show Outstanding tips' toggle is Enabled (On):

• Tips are tracked as a running cumulative total. Any tips not Marked as paid in a previous period will carry over into your current period as Outstanding Tips.

• For accounts reconciling tips outside of 7shifts, you’ll use the Mark tips as paid workflow to clear these totals and keep your ledger accurate. Steps on reconciling tips here: Reconciling Tips Paid Outside of 7shifts.

If the 'Show outstanding tips' toggle is Disabled (Off): 

• The Tips overview dashboard only shows tips earned within the specific dates of the pay period you are viewing. Historical unpaid tips are hidden and won't carry over.

• For accounts reconciling tips outside of 7shifts, you will not need to use the Mark tips as paid workflow to clear balances from previous periods.

To change this setting:

1. Log in to the web app as an Admin, navigate to Tip Management > Overview.
2. In the top right corner of the dashboard, toggle the Show outstanding tips switch. 
3. A prompt will appear explaining how your data will change. 
4. Click I understand to apply the change. 

Reconciling Tips Paid Outside of 7shifts 

If you have Show outstanding tips enabled, you must record any tips paid via cash or external payroll using the Mark tips as paid workflow below. This ensures your ledger stays accurate and prevents paid tips from carrying over as debt into the next pay period.

If you pay out cash tips out to employees during the pay period, you must reconcile these tips immediately using the Mark tips as paid workflow. 

Reconcile Cash Tips: 

1. Navigate to Tip Management > Overview in the 7shifts web app.
2. Click the Mark tips as paid button at the top of the dashboard.
3. Choose one of the following options to record cash tip payments:
   • Option 1: Mark all tips as paid 
     • Use this option if you used a single payment source (e.g., all owed tips were paid in cash) and you want to quickly clear the balance for all employees at once. 
     • Select the Paid in cash payment source. The system will automatically populate the owed tip values into the 'Amount paid' column to record the full payment to that source.
   • Option 2: Individually mark tips as paid
     • Use this option to record tip payments per employee.
     • Select the Paid in cash Payment Source. 
     • Enter the exact amount of paid tips to the employee via cash. 
4. Click 'Add Tips' to submit and apply the payment to the ledger. 

Tips recorded as Paid in cash will appear in the Paid on shift column.

Export Payroll and Reconcile Tips Paid Outside of 7shifts

1. Ensure all Cash Tips were reconciled - see steps above. 
2. Export Payroll to your external provider: This involves running the payroll export for the ended pay period. This export will pull the Owed Tips which includes Outstanding Tips carried forward. This tells your external payroll system how much tip needs to be paid out.
3. After payroll is processed, you must record those paid tips in 7shifts:
   1. Navigate to Tip Management > Overview in the 7shifts web app.
   2. Use the date selector to choose the desired pay period (the period in which the tips were paid). 
   3. Click the Mark tips as paid button at the top of the dashboard.
   4. Choose one of the following options to record tips as paid:
      1. Option 1: Mark all tips as paid 
         1. Use this option if you want to quickly clear the balance for all employees at once. 
         2. Select the External Payroll as the payment source. The system will automatically populate the owed tip values into the 'Amount paid' column to record the full payment to that source.
      2. Option 2: Individually mark tips as paid
         1. Use this option to record tip payments per employee.
         2. Select the External Payroll as the Payment Source. 
         3. Enter the exact amount of paid tips to the employee via cash. 
   5. Select Add Tips to submit and apply the payment to the ledger. 

Pro Tip! Use your external payroll report as the source of truth when entering tip amounts. 

This clears those tips from the Owed Tips balance and keeps your cumulative totals accurate. 

Tips recorded as External Payroll will appear in the Paid on payroll column.

To view the detailed breakdown of an individual employee's tips, click anywhere on that Employee's row in the dashboard. For more information on what each field in the breakdown means, see this article: Employee Tip Breakdown.

Paying & Reconciling Tips with Tip Payouts

Using Tip Payouts is the fastest way to pay employee's their tips and to clear owed tips directly from your ledger.

1. Navigate to Tip Management > Overview in the 7shifts web app.
2. Select Send tips to employees to create a payout batch.
3. Send the payout batch.
   • This action automatically deducts the tips from the employee's owed balance in the ledger.
   • The paid amounts will then appear in the Paid in tip payout column, successfully clearing them from the Owed Tips balance.

Reconciling Tips with 7shifts Payroll

When you use 7shifts Payroll, the tips owed to employees are synced automatically.

1. Follow the steps in this article to Run Payroll.
2. Tips to be Paid: Owed tips from the ledger will automatically populate in Payroll as "Tips to be Paid" and be included in the employee's paycheck.
3. Tips Already Paid: Any tips you have already reconciled using the Mark tips as paid button (e.g., cash tips) or using 7shifts Tip Payouts will also appear as Tips already paid and are tracked for accurate tax reporting.

Employee View (Estimated Tips)

• On the employee side (mobile app/dashboard), Estimated Tips should equal the Earned Tips total that managers/admins see on the web.
• The Outstanding Tips balance is not included in the employee's Estimated Tips display.

Admin/Manager Web View: 

Employee Mobile Dashboard View

FAQ