Form 8027 tip allocation calculator, from your POS export
Drop your tips and sales by employee. Allotip fills Form 8027 lines 1–8 and splits any allocated tips the IRS way.
Files it reads
A CSV or Excel export with one row per tipped employee per payroll period: employee, period end, tip type (direct or indirect), gross receipts and/or hours, and tips reported. Optional columns: charge receipts, charged tips, cash tips and service charges under 10%, plus “House” rows for sales not tied to an employee. Download the template from the tool to see the layout.
How the allocation works
If tips reported for a period are less than 8% of gross receipts, a large food or beverage establishment must allocate the difference to directly tipped employees and report it in W-2 box 8 (Instructions for Form 8027). In the IRS example — $100,000 of receipts, $500 of indirect tips and six servers — $1,801.00 is allocated:
| Server | Receipts | Tips reported | Allocated |
|---|---|---|---|
| A | $18,000.00 | $1,080.00 | $258.00 |
| B | $16,000.00 | $880.00 | $306.00 |
| C | $23,000.00 | $1,810.00 | $0.00 |
| D | $17,000.00 | $800.00 | $454.00 |
| E | $12,000.00 | $450.00 | $430.00 |
| F | $14,000.00 | $680.00 | $353.00 |
Allotip reproduces those numbers exactly (rounded to whole dollars, as the IRS example is).
What you get
- Form 8027 lines 1–8: charged tips, charge receipts, service charges, indirect and direct tips reported, gross receipts, 8% of receipts, tips allocated and the directly tipped head count.
- Allocation per employee: the six steps of the IRS line 7 method, by payroll period or for the year, by gross receipts or hours worked — the W-2 box 8 amount for each directly tipped employee.
- Checks: lower-rate warnings, periods that can't be allocated, duplicates, negative rows, mixed roles and the optional worksheet for potential unreported tips.
- Exports (Pro): W-2 box 8 CSV, allocation-by-period CSV and an Excel workbook.
Allotip doesn't e-file and doesn't support the good-faith agreement method (line 7c). Check whether you're a large food or beverage establishment yourself (the instructions' 10-employee test).
Your payroll data stays on your computer
Allotip reads your file with JavaScript in this browser tab. Names, sales and tips are never uploaded, and closing the tab clears them.
How it works
- Drop your tips and sales export (CSV or Excel) — or try the sample, or download the template.
- Pick the year, method and allocation period you use for the whole year.
- Read Form 8027 lines 1–8 and the checks, then print the summary. With Pro, see every employee and download the W-2 box 8 CSV, the allocation-by-period CSV and the Excel workbook.
FAQ
What does Allotip do?
It reads tips, sales and hours by employee from a POS or payroll export, totals Form 8027 lines 1–8, and allocates tips the way the Form 8027 instructions describe when reported tips are below 8% of gross receipts — giving the W-2 box 8 amount for each directly tipped employee. It doesn't run payroll and doesn't file anything.
Is my data uploaded?
No. Your file is read by JavaScript in your browser tab and never sent to us or anyone else. The data isn't stored, so closing the tab clears it. Your settings (year, method, rate, period, employer name) can be saved in this browser.
Which files can I use?
CSV, tab-separated or Excel with one row per tipped employee per payroll period: employee, period end, tip type (direct or indirect), gross receipts and/or hours, and tips reported (or cash and charged tips). Charge receipts, charged tips and service charges are optional. Download the template to see the layout.
What's free?
Importing any number of employees, Form 8027 lines 1–8 and every check, plus the first 5 employees itemized on screen and in print (with a footer). Pro itemizes every employee and exports the W-2 box 8 CSV, the allocation-by-period CSV and the Excel workbook.
Do I have to file Form 8027?
Only if you operate a large food or beverage establishment: food or drink consumed on the premises, tipping customary, and more than 10 employees on a typical business day in the previous year by the instructions' hours test. Allotip doesn't decide that for you — read the instructions.
What isn't covered?
E-filing (use paper or an IRIS filer), the good-faith agreement method (line 7c), multiple establishments in one file (run each separately), and box 12 code TP or occupation codes (confirm those in payroll).
Is this tax advice?
No. Allotip applies the steps in the 2026 Instructions for Form 8027 (October 8, 2026) to the data you provide. Ask your tax adviser or payroll provider what applies to you.