thread Re: Tips & Cash in Archived Discussions (Read Only)

How do I track cash in my till and pay out and account for tips?

winesalot — Thu, 27 Jul 2017 11:03:25 GMT

I am a new Square user and I am frustrated with the help function and Square Communities not having accessable answers to some basic questions I have on using the system.

1. How do I track cash in my till? I do not need a fancy automated drawer but I need a start of shift and end of shift total so we can balance it our every day.

2. How do I pay out and account for tips that were paid by credit card? Alan Silver Bell Winery

What is the proper way to distribute tips to employees when credit cards are used?

WakinUpWaggin — Sun, 15 Sep 2019 01:38:00 GMT

What is the proper way to distribute tips to employees when credit cards are used? Do I find out what the tips are, and just give the employees cash? Are the tips taxed/ is there a Square charge on tips?

Re: What is the proper way to distribute tips to employees when credit cards are used?

winesalot — Mon, 25 Apr 2016 03:39:16 GMT

Could someone please answer this? I am a new Square user and have no idea how to handle dispersing tips to employees that were paid with credit card.

Re: Tips & Cash

Sean — Wed, 13 Jul 2016 21:08:19 GMT

Awesome question! I'm so glad you asked, and I do apologize for the delay in getting back to you.

To get going, you can manage your cash drawer with the Square app on an iPad or Android tablet. You have the ability to "Open" and "Close" your cash drawer to check balances when you'd like. For more details, here is a link to our Support Center article that lays out how to get this set up.

As for your second question, Square doesn't have an official recommendation for the best way for tipping out employees. It really comes down to what works best for your individual business. Some merchants will tip their employees out each evening using cash. You have the ability to record "Pay Outs" using Cash Drawer Management (that's explained in the article referenced above). You can also view employee sales (including tips) from the Square Dashboard's Employee Sales report. Using this, you could pay tips out according to your regular pay schedule, and then just include this amount.

Hope this helps! Don't hesitate to add any other questions. I'm happy to clarify.

Re: Tips & Cash

ThierrLRC — Fri, 29 Apr 2016 01:20:57 GMT

Go to REPORT then SALES and customize your report (the little sliders above) by choosing begining time and ending time: this will allow you to see exactly how much tips were added to the card payments for the hours you want. For example, an employee works from 7 am until 9 am by herself then another employee comes in at 9 am and they work together until 12 pm. When ready to get the tips out, you can look the way I described for that day between 7 am and 9 am to see how much tips employee 1 got by herself, then look at between 9 am and 12 pm to see how much tips they made together.

Hope this helps.

Re: Tips & Cash

Sean — Fri, 29 Apr 2016 18:58:06 GMT

@ThierrLRC Awesome add-on! 🙌

@winesalot @WakinUpWaggin Does this help out?

Re: Tips & Cash

bagelandbrew — Tue, 03 May 2016 10:59:01 GMT

We do it similarly to as described above. At the end of the day we have our employees record their cash and credit tips in a log book. The employees leave with their cash tips at the end of the day. The credit card tips are called into the our payroll company and added to the employees check each week.

Re: Tips & Cash

brookedrussell — Tue, 17 May 2016 23:31:59 GMT

If I create different employee profiles, will they be able to track the tips that they recieved individually? Or should I set up different locations for this? I would like to know how to tip my server vs. the cashier. Thanks!

Re: Tips & Cash

Spenser — Thu, 19 May 2016 18:00:21 GMT

@brookedrussell, yes! If you're using employee management, you can view sales and tips collected per employee here: https://squareup.com/dashboard/sales/reports/employee-sales

Re: How do I get rid of cash back? I am a small business and do not have the cash on hand for this.

Dnights — Thu, 28 Jul 2016 02:18:06 GMT

Just got this square reader for my business.

How do you cash out

Re: How do I get rid of cash back? I am a small business and do not have the cash on hand for this.

Kelly — Thu, 28 Jul 2016 19:22:52 GMT

@Dnights Check out Sean's answer at the top of this thread for some info that should help!

Re: Tips & Cash

JoyCafe — Sun, 21 Aug 2016 16:34:47 GMT

Thank you for your reply. How do you account for amount of taxes on tips that need to be reported?

Re: Tips & Cash

EJ_ — Tue, 23 Aug 2016 18:00:23 GMT

@JoyCafe You'll want to speak with a Tax Advisor in regards to the best way to go about reporting this information.

You can use your Sales Summary Report to view the tips and taxes accepted to help out with this.

Re: Tips & Cash

Kt — Mon, 23 Sep 2019 14:47:20 GMT

My employees log their Credit Card Tips amount into a little calendar book (though I think using an app on the iPad would be better since the calendar book could easily be lost) and they take that amount in cash at the end of their shift each day. Then the person working the next shift knows that their own tips are the total Tips in the Reports for the day, minus the prior employee(s) amount(s) listed on the calendar. People's shifts / clock ins don't always reflect that they were the one working the counter at that time, so I can't rely on looking at timeframes and calculating tips with payroll. However, this means the business pays the fee on their credit card tips, but I am not going to sweat that, cuz whatever, tips aren't that much at my business (coffee). If it's a big deal at your business, though, you could have them deduct that percentage as well when they cash out CC tips. If they can't do maths, tell them to take 97 cents on the dollar. (;

Re: Tips & Cash

FGSF — Thu, 08 Sep 2016 15:14:04 GMT

The tips reporting is a major issue with Square. I am doing what you guys are doing and I dont understand how Square can not think of something like this and in addition have NO SIMPLE solution. It is confusing for staff and lots errors get made.

Square is great but we are contemplating changing to another system just for this.

Re: Tips & Cash

wright561 — Wed, 26 Oct 2016 02:18:46 GMT

I'm with you FGSF. I just started using Square after having used Aldelo for 5 years. Aldelo is much more advanced and detailed but I like the mobileness and simplicity of Square. This tips issue is really bothering me already after the first night though. It's a very simple programming issue that could be fixed very quickly. When the employee is doing the cash out (End Drawer) at the end of their shift, all Square would have to do is import the tips for that empoyee into the End Drawer report and deduct it from the Cash Expected. Most POS systems will also let the administrator choose whether or not to deduct the processing fee out of the tips as well. Very simple to fix for them and I hope it gets done very quickly or we may be moving away from this system very soon also. Come on Square, help resolve this simple issue!

Re: Tips & Cash

Sean — Thu, 27 Oct 2016 19:17:35 GMT

@wright561 - Thanks for taking the time to share your feedback! We'll be sure to share your thoughts with our Product Liaison Team. For more details on the feature request process and what role the community plays, please check out this thread.

Re: Tips & Cash

PVS — Mon, 12 Dec 2016 22:07:22 GMT

I am sure this has been asked and answered before, but why oh why would you not be able to see cash drawer start and end of day on android and iphone devices. Our employees work multiple locations with their own devices and they cannot be carrying around tablets. Although I am thinking it may be that we have to go this route which makes square not so inexpensive to use anymore. Oh well. If you can post this somewhere else or send to the developement team we would greatly appreciate a simple way for employees using their own devices to see the cash they should have on hand at end of day. Can't run a business very well without keeping track of these things.

Re: Tips & Cash

Sean — Tue, 13 Dec 2016 20:28:39 GMT

@PVS - I'll be sure to pass along the feedback! 👍

Re: What is the proper way to distribute tips to employees when credit cards are used?

ciderbite — Wed, 04 Jan 2017 01:40:19 GMT

You should decide and document your organization's process for dispersing tips. All of your credit card transactions are reported to you and the IRS by Square on a 1099-K form. Tips paid on credit cards are still charged the same card processing fee as the rest of the card amount processed.

I am not a lawyer or an accountant, so the following information is based on my experience and on my opinion. That said...

Credit Card Tips paid to employees should be reported as prepaid or owed, with your payroll.

Cash tips paid by customers directly to employees, should be reported by the employees and logged daily by the employer. Discuss this with your accountant or tax professional.

As far as the Square fee paid on the tip portion of each transaction, you can choose to pay employees the full tip amount and the difference will wash as an expense, or you can pay the employee 97.25% of the credit card tips. We chose the latter of those options, but it's important to inform your employees of this process.