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Running a restaurant in Miami involves several overlapping tax and payroll requirements, including tip reporting, the new federal tip deduction for employees, the FICA tip credit, Florida's minimum wage requirements, and state and local sales taxes.
Many compliance issues begin with relatively small reporting or payroll errors that continue from one pay period to the next. Establishing accurate processes can help restaurant owners keep payroll, tax filings, and financial records consistent.
This guide covers the primary requirements and changes affecting restaurant owners in 2026. For ongoing accounting support, see our bookkeeping and payroll services:
https://www.levinecpas.com/bookkeeping-services-in-miami
https://www.levinecpas.com/payroll-services-in-miami
Under Florida's constitutional amendment, the state minimum wage increases to $15.00 per hour on September 30, 2026, while the tipped minimum wage increases to $11.98 per hour, reflecting a $3.02 tip credit.
• Update applicable payroll rates for the first pay period that includes September 30.
• Make up the difference if a tipped employee's cash wage plus tips does not meet the required minimum wage.
• Maintain required notices and documentation regarding the tip credit.
• Review labor budgets and menu pricing to account for the wage increase.
Tips are treated as wages for payroll tax purposes. Restaurant owners should have a consistent process for recording and reporting them.
• Employees report tips to the employer. Employees who receive $20 or more in tips during a month generally must report those tips to their employer by the 10th day of the following month.
• Employers withhold and pay applicable payroll taxes on reported tips, including the employer share of Social Security and Medicare taxes.
• Certain large food or beverage establishments file Form 8027. This generally applies to qualifying establishments where tipping is customary and more than 10 employees are normally employed on a typical business day. Additional allocation requirements may apply when reported tips fall below the applicable percentage of gross receipts.
• Tip pools should be properly documented. Employers should maintain consistent records showing how pooled tips are distributed and reported.
The One Big Beautiful Bill Act created a federal income tax deduction for certain qualified tips for tax years 2025 through 2028.
• Eligible workers may deduct up to $25,000 of qualified tips annually, subject to applicable requirements.
• The deduction phases out above specified modified adjusted gross income thresholds.
• Eligibility depends in part on whether the worker's occupation qualifies under applicable Treasury rules.
• The deduction applies to federal income tax. Social Security and Medicare taxes continue to apply to tips.
Beginning with applicable 2026 reporting, employers need to ensure that payroll systems properly capture qualified tips and the information required for year-end reporting.
Restaurants should confirm that their POS and payroll systems accurately track tips by employee and properly identify tipped positions.
Service Charges Are Not the Same as Tips
Many Miami restaurants, particularly in areas such as South Beach and Brickell, use automatic service charges.
Mandatory service charges are generally treated differently from voluntary tips. If the customer cannot freely determine the amount, including reducing it to zero, the payment may not qualify as a tip for purposes of the federal tip deduction.
Amounts distributed to employees from mandatory service charges are generally treated as wages. Restaurants should make sure their POS, payroll, and accounting systems distinguish between voluntary tips and mandatory service charges.
Levine CPA and Advisors works with Miami restaurants on payroll, tip reporting, sales tax, and year-end reporting. Call (305) 912-0085 or talk to our team: https://www.levinecpas.com/contact
The Section 45B FICA tip credit provides eligible food and beverage employers with an income tax credit related to the employer share of Social Security and Medicare taxes paid on certain employee tips. The credit is claimed on Form 8846.
Important considerations include:
• The credit calculation generally applies to qualifying tips above the amount needed to bring an employee's wages to the applicable statutory base used for the credit.
• The credit is treated as a general business credit and may be subject to applicable carryback and carryforward rules.
• An employer generally cannot both claim the credit and deduct the same employer payroll taxes used to calculate the credit.
The value of the credit depends on the restaurant's circumstances and entity structure. For pass-through businesses, the tax treatment may also affect individual owners.
The credit can be considered as part of broader year-end tax planning:
https://www.levinecpas.com/blog/year-end-tax-planning-checklist-for-miami-small-businesses-2026
Florida's state sales tax applies to taxable restaurant meals and beverages, and Miami-Dade County imposes an additional discretionary sales surtax.
Our Florida sales tax guide covers registration and general filing requirements:
Depending on the restaurant's location and operations, additional local food and beverage taxes may also apply.
Florida sales tax plus Miami-Dade surtax: applies to taxable sales of meals, beverages, and other taxable items.
Miami-Dade Homeless and Domestic Violence Tax: may apply to qualifying establishments licensed to sell alcoholic beverages for on-premises consumption.
Miami-Dade food and beverage tax: may apply to qualifying food and beverage sales at hotels and motels.
Municipal resort taxes: certain municipalities, including Miami Beach, Surfside, and Bal Harbour, impose their own resort-related taxes.
The treatment of individual transactions can vary based on the type of sale, location, service charges, and other factors. Restaurants should confirm their specific collection and filing requirements with the Florida Department of Revenue and applicable local authorities.
If you receive a state audit notice, our Florida Department of Revenue audit representation team can assist:
https://www.levinecpas.com/florida-department-of-revenue-audit-representation
Restaurant owners should also monitor:
• Worker classification for delivery drivers, DJs, event staff, and other workers.
• Quarterly payroll filings and federal tax deposits, including taxes related to reported tips.
• Depreciation planning for kitchen equipment, furniture, technology, and build-outs.
• Monthly bookkeeping so food costs, labor costs, and other key operating expenses can be monitored accurately.
• Entity structure and owner compensation, particularly for restaurant groups with multiple locations.
Our fractional CFO services can provide additional financial reporting and planning support:
https://www.levinecpas.com/business-advisory-fractional-cfo-services-in-miami
Restaurant tax and payroll issues can accumulate over time when reporting errors repeat from one pay period to the next. A consistent process for tip reporting, payroll, sales tax, and monthly bookkeeping can help reduce compliance issues and provide owners with more reliable financial information.
Starting September 30, 2026, Florida's minimum wage is $15.00 per hour and the tipped minimum wage is $11.98 per hour, reflecting a $3.02 tip credit. Employers are responsible for making up any applicable shortfall if cash wages plus tips do not meet the required minimum wage.
No. The federal deduction does not eliminate Social Security and Medicare taxes on tips. Employers continue to have payroll tax reporting and withholding responsibilities for reported tips.
Generally, mandatory service charges are treated differently from voluntary tips. Amounts distributed to employees from mandatory service charges are generally treated as wages.
Restaurants should maintain accurate records of tips by employee and ensure that payroll and POS systems are configured to capture the information required for payroll and year-end reporting.
It is a federal income tax credit available to qualifying food and beverage employers for the employer share of Social Security and Medicare taxes paid on certain tips. The credit is claimed on Form 8846.
Florida sales tax and the applicable Miami-Dade discretionary surtax generally apply to taxable restaurant sales. Additional local food, beverage, or resort taxes may apply depending on the establishment's location and operations.
This article provides general information only and is not tax, legal, or financial advice. Tax rules, thresholds, and deadlines change, and every situation is different. Speak with a qualified professional about your circumstances before acting.
Levine CPA and Advisors supports Miami restaurant owners with payroll, tip reporting, sales tax, accounting, and tax planning. Call (305) 912-0085 or schedule a restaurant accounting consultation: https://www.levinecpas.com/contact
