Payroll Tips for Seasonal Hospitality Staff in Colorado

How to Avoid Payroll Pitfalls During Peak Summer Hiring

July is peak season in Colorado. With festivals, tourism, and outdoor dining in full swing, many restaurants, hotels, event venues, and food trucks are running at full capacity — and that means lots of seasonal and part-time hires.

But when the kitchen’s hot and the tables are full, payroll compliance can easily slip through the cracks.

Whether you're paying hourly, tipped, or temporary workers, getting payroll right is critical. Inaccurate wage calculations or tax filing mistakes can lead to costly penalties and unhappy employees — and that’s the last thing your business needs during a busy summer.

Here’s how to manage payroll like a pro — and how Barmann Bookkeeping can help hospitality businesses in Colorado Springs stay organized and compliant.

Know Your Worker Types

Before running payroll, it’s essential to properly classify each worker.The most common types for hospitality businesses are:

✅ W-2 Employees

• Hourly or salaried

• Eligible for overtime

• Taxes are withheld and reported by the employer

• Examples: line cooks, servers, front desk staff

✅ 1099 Contractors

• Independent workers with more flexibility

• Must handle their own taxes

• Often used for freelance entertainers or event staff

✅ Seasonal Employees

• Hired for a specific period (e.g., summer season)

• Still considered W-2 employees for tax purposes

Misclassifying a worker can result in IRS penalties, back taxes, and legal fees. You can double-check classification guidelines at the Colorado Department of Labor and Employment 

Managing Tipped Employees

Colorado’s current minimum wage (as of 2025) is $14.81/hr, but tipped employees may be paid as low as $11.79/hr, provided tips bring their total to at least minimum wage.

Make sure to:

• Accurately track and record tips (including cash and credit card tips)

• Withhold the appropriate payroll and income taxes on reported tips

• Report all tip income on W-2s at year-end

The IRS Tip Reporting Guide offers great detail on best practices for employers.

Don’t Forget Local and State Regulations

Hospitality payroll in Colorado Springs must comply with:

• Colorado Paid Sick Leave: Seasonal employees accrue one hour of paid leave for every 30 hours worked (CO Labor Law Guide)

• Meal and Rest Break Requirements: Employees working 5+ hours must receive a 30-minute unpaid meal break

• Unemployment Insurance and Worker’s Comp: You must register with the Colorado UI Division and provide appropriate coverage

In addition, the City of Colorado Springs may require local business licenses or occupational privilege taxes depending on your business type.

Best Practices for Hospitality Payroll

To keep your restaurant, bar, or event venue running smoothly this summer, follow these essential tips:

📌 Use Time-Tracking Software

Accurate time records are key to paying employees correctly. Tools like Quickbooks can help track hours, breaks, and tip-outs.

📌 Set Up a Payroll Calendar

Clearly communicate pay periods and check dates. Inconsistent pay schedules can lead to payroll disputes and staffing issues during peak times.

📌 Automate Your Tax Withholding

Payroll tax compliance includes federal, state, and local obligations. Automating tax deductions and reporting reduces your risk of errors or late filings.

📌 Keep Digital Employee Files

Maintain copies of W-4s, I-9s, time records, and any employee agreements. If you're ever audited, these documents will be critical.

Let a Local Expert Handle It

At Barmann Bookkeeping, I help Colorado Springs and surrounding businesses just like yours stay compliant — even when staffing ebbs and flows with the season.

Whether you're managing 5 employees or 50, we’ll help with:

• Payroll processing

• Tip allocation and reporting

• Tax filings and W-2 generation

• Paid leave tracking

• Contractor vs. employee classification

I understand the unique demands of hospitality in our region — and I'm here to make payroll one less thing to worry about.

Local Resources for Hospitality Business Owners:

• Colorado Department of Labor and Employment (CDLE)

• Colorado Restaurant Association – Pikes Peak Chapter

• Pikes Peak Small Business Development Center

• City of Colorado Springs Business Licensing

• IRS Tip Reporting Guidelines

Let’s Simplify Your Payroll This Summer

Need help managing your seasonal staff, tips, and tax filings?

👉 Schedule a free consultation with Barmann Bookkeeping and let’s build a payroll system that fits your hospitality business — and keeps you compliant all year long.

Disclaimer:

This blog post is provided for informational purposes only and should not be construed as legal, tax, or HR advice. Regulations may change, and businesses are encouraged to consult with a licensed CPA, employment attorney, or payroll specialist for guidance specific to their operation.