thread Re: Don’t include service charges in net sales in Orders, Menu Items, Catalog & Fulfilment

Don’t include service charges in net sales

sbrockz — Sat, 20 Sep 2025 14:38:25 GMT

Please update the net sales calculation

automatic gratuity is servers tips

currently you are adding service charges to net sales.

Restaurant doesn’t make the money, please make sure you are not adding service charges/automatic gratuity into the net sales please.

thank you!

Re: Don’t include service charges in net sales

sbrockz — Fri, 04 Jun 2021 18:55:15 GMT

Any update on this request please?

Re: Don’t include service charges in net sales

Future-Bars-Inc — Sat, 05 Jun 2021 00:21:22 GMT

Fired a response to you on another thread, but compulsory charges, whether labeled "service charge" or "auto gratuity" cannot be included in tips. Square for Restaurants is doing what is legally required.

https://www.irs.gov/businesses/small-businesses-self-employed/tip-recordkeeping-and-reporting

Re: Don’t include service charges in net sales

BernadetteA — Sat, 05 Jun 2021 23:42:00 GMT

Apologies, but we do not have any updates at this time.

Please remove service charges from Net sales total

sbrockz — Tue, 15 Jun 2021 16:06:01 GMT

Currently in Square for Restaurants you are adding Service Charges with the Net Sales

Service Charges are either Gratuity or Tips for our servers

Please exclude the Service Charges from the Net Sales

So our reporting is accurate please

Right now it is not accurate.

Re: Don’t include service charges in net sales

sbrockz — Wed, 21 Jul 2021 19:08:56 GMT

We give our servers the Automatic Gratuity

Restaurants don't keep them so adding them into Net Sales doesn't make sense for record keeping prospective.

Not sure how your book keeper is following but currently none of our reports are correct because the Net Sales include the Service Charges (Automatic Gratuity)

My feature request is NOT include Automatic Gratuity or Service Charges into Net Sales.

Re: Don’t include service charges in net sales

sbrockz — Wed, 21 Jul 2021 19:10:48 GMT

@BernadetteA

Is there any update on the request?

Sales Summary report to exclude service charges from Net Sales, please

Thank you

Re: Don’t include service charges in net sales

BernadetteA — Sat, 24 Jul 2021 18:42:12 GMT

Hi @sbrockz I checked in with the team, and the reports are showing accurately. Please reference this article if you have additional questions.

Re: Don’t include service charges in net sales

sbrockz — Tue, 17 Aug 2021 22:12:09 GMT

@BernadetteA

I understand the IRS article but you guys are not understanding the basic concept here.

Automatic Gratuity as you roll up under service charges belong to the server and they take them home

The restaurant doesn't keep the service charges so technically it is not NET SALES, yes it is part of the GROSS SALES but not net sales.

The requirement here for you guys to deduct service charges from the NET SALES not ADD IT where it becomes complicated and ALOT OF MANUAL CALCULATIONS.

Re: Don’t include service charges in net sales

Den_Distiller — Mon, 29 Aug 2022 04:33:00 GMT

@sbrockz is completely correct on this topic. So frustrating to see "auto gratuity" in net sales...should be in "tip" and distributed correctly in payroll....but it's not. Would love an update on the progress here. I can't be the only one with Square for Restaurants that has this "auto gratuity" issue.

Please remove it from sales and allocate that figure to tips so payroll can be run automatically.

Thanks!

Re: Don’t include service charges in net sales

jalford28 — Thu, 07 Mar 2024 23:37:00 GMT

Please report like this:

Sales line items (items, services, goods sold)

Gratuity Line Item (Tip, Service Charge, Gratuity)

Re: Don’t include service charges in net sales

jalford28 — Thu, 07 Mar 2024 23:38:25 GMT

This helps to track labor accurately since there is no live labor tracker if you report as a sperate line item on live reports. Square, does this make sense?

Re: Don’t include service charges in net sales

MayaP — Fri, 08 Mar 2024 20:05:33 GMT

Hey there @jalford28 @sbrockz, I appreciate this feedback! I suggest submitting a request on how we can improve our reporting on our Ideate Board. I'm sorry our current setup is not working out for you and is causing extra work. Hopefully, we can change this down the road!