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TTOC Codes for Tipped Employees

What are TTOC codes for Tipped Employees and how do you update the employee profile?

What are TTOC codes and why are they needed?

  • As part of the One Big Beautiful Bill Act (OBBBA) signed into law in 2025, the IRS requires a TTOC (Treasury Tipped Occupation Code) code on the W2 form in box 14b beginning with tax year 2026 for any employee with reported tips, due to the change in taxation on these earnings.
  • If an employee pay statement is generated that includes a Tips earning type, and a TTOC code has not been assigned to that employee, a warning message will appear to alert you to the missing information. This will be visible during payroll entry.
  • A new field has been added to the Employee Profile to accommodate this new requirement. (Menu / Team / My Team / select employee / Employee Information / Pay Information / TTOC field).
  • Click the search icon in the TTOC field to view available codes, and select the one provided or approved by the client.
  • The employer is responsible for determining which code is applicable for each employee.
  • Further IRS guidance on TTOC can be found by visiting this link: OBBBA Tips
  • More information on the OBBBA from the IRS can be found here: OBBBA Provisions
Will the system warn me if an employee is missing a TTOC code?

Where do I update or assign a TTOC code for a tipped employee?

 

Where can an employer get more information on TTOC codes or the OBBBA?

  • Further IRS guidance on TTOC can be found by visiting this link: OBBBA Tips
  • More information on the OBBBA from the IRS can be found here: OBBBA Provisions

 

Important:  The employer is responsible for determining which code is applicable for each employee and assigning the code in the TTOC field in the system. This is only required for W2 forms generated in 2026 going forward.

 

FAQs:

How do I update multiple employees quickly?

- An Employee Information Report can be run and the TTOC column can be added for mass edits.

How do I remember to add this to a new employee?

- We are looking into automated solutions to this (required fields tied to cost centers or job titles, HR Actions, etc.).

Can TTOC codes be imported for mass editing?

- Yes, this is an importable field

Can we make defaults?

- Under review.

Where is the security for the admin to add these in?

- Security Profile must contain View/ Edit access in HR/ Employee Management/ Account/Personal Information (Manager Access) to update the TTOC fields.  A UKG Idea (https://ukg.ideas.aha.io/ideas/RDYIDEA-I-15607) has been submitted to request enhancements to the security profile screens to allow further configurability to this field access.