Payroll on Demand and Tips?

dsaxena_pdx — Sun, 21 Sep 2025 06:44:58 GMT

I'm considering enabling on-demand pay for my team and want to make sure it only allows access to funds from hourly wages and not tips as we have a pretty custom and complex tip-sharing spreadsheet that we use to allocated tips based on hours worked and roles and responsibilities.

Thanks!

Re: Payroll on Demand and Tips?

Donnie-M — Fri, 29 Jul 2022 13:52:25 GMT

@dsaxena_pdx The good news is the system has 2 different caps that keep you safe in your situation unless you are claiming a tip credit against a really really small base wage. (In Tennessee the base wage can be 2.13 an hour + tips as long as it equals minimum wage for the person).

Even in that situation, if an employee quit after working, you would still owe them minimum of 7.25 an hour. I am going to assume that your staff earns something above that. Square limits the amount the employee can take as a draw to $200 or 50% whichever is lower. So if they worked 10 hours and earned $100 in tips and made $10 an hour they would still only be able to advance $100.00.

" Team members can transfer up to 50% of their earned wages, up to $200 per pay period and have their money sent instantly to Cash App, a linked debit card, or a supported direct deposit bank account."

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Payroll on Demand and Tips?

Re: Payroll on Demand and Tips?