State tax filing

You are a bit confused and the employer may be able to explain it better but here it is ...

 

On your paycheck  there are the wages from the employer + the tips you reported (that you already have in your hand) which gave you the gross taxable income on the paycheck.  On that gross federal/state taxes & your half of the FICA taxes are withheld.  So the gross taxable income less the taxes that are withheld  gives you the net paycheck amount.  AND the employer pays their 1/2 of the FICA taxes on your gross income which is good for you.   So in the end your spendable cash equals the net paycheck+ the tips you walked home with on the day you earned them.