QB Issue Resolution:

You don’t need to add cash tips as an income. These are gratuities/rewards that are paid to employees in cash. Once your employee received a cash tip, you’ll have to add it in the paycheck for tax purposes, then take out the amount so they won’t get paid twice. I’ve got you an article for more information:¬†Report tips in and out on employee paychecks in QuickBooks Desktop Payroll.

Regarding the Profit and Loss report, the payroll taxes amount is already added in the gross wage. Having said that, you no longer need to add up the payroll taxes to the gross wage amount.

Resolution for Issue 'Should the Payroll Expense account on the P & L match the Form W-3 when there are Reported Cash Tips and Offset or do I need to create a journal entry for cash tips?' available: Yes (Solved).
Source: Intuit Community forum.

Should the Payroll Expense account on the P & L match the Form W-3 when there are Reported Cash Tips and Offset or do I need to create a journal entry for cash tips?: this issue or error code is a known issue in Quickbooks Online (QBO) and/or Quickbooks. Support for this issue is available either by self-service or paid support options. Experts are available to resolve your Quickbooks issue to ensure minimal downtime and continue running your business. First try to resolve the issue yourself by looking for a resolution described below. If it is a complex issue or you are unable to solve the issue, you may contact us by clicking here or by using other support options.

Support for Cash Tips
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Error Recovery for Cash Tips [Canada]
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