Do you have to use Square Payroll to accept credit card tips?

[babeastlansing]

Can you still use the credit card tip option if you use a different payroll system than Square's? And if you can, can you cash out tips in the moment, and how exactly would that pay out process work?

We are a counter-serve cafe and pool cash tips for whoever is on shift at the moment. When somebody comes in for a shift or leaves, we dump the jar and split it between whoever was working at the time. I would like to turn the credit card tip option on. I would prefer to split them in the moment in the same way we do cash. But if we have to add them on to their paycheck later that's fine too. 

***I understand from reading other discussions on this subject that if it is possible I would have to calculate how much each person would get myself because team management currently doesn't have this feature AND that I would have to keep track of how much each person was getting for tax reporting purposes***

I'm also wondering, if the cashing out in the moment is possible, how does that affect your cash reporting process at the end of the day? Are you just "short" and you have to figure out how to properly account for it yourself or is there a way of reporting that it was paid out for tip purposes?

[Ria]

Hi @babeastlansing - Thank you for stopping by The Seller Community 😊

Great Questions.

You can still accept credit card tips if you do not use Square Payroll's tip importing feature. Learn more about our tipping options here:

Square Tipping

When you cash out at the end of the day that would be considered the end of day and anything thereafter would have to be manually worked out. 

I hope this helps.

As always, feel free to stop by The Community with question, concerns and even feature requests. We are more than happy to assist. ✨

[Anthem]

Hello @babeastlansing we've used square and have accepted credit card tips for years. Our process is to run a report as we complete payroll every other week to determine the amount of tips collected. We practice pooling and use an Excel document to monitor hours, employee purchases, and tips due. After running the Square report we put the total amount of tips into an input box as well as the hours of each employee. The formulas built into the simple excel document tally all hours worked then distribute an hourly average to each employee based on how many hours they worked. We are able to exclude not-tip-earning employees as needed by adjusting the formula. We use QuickBooks online for our bookkeeping and payroll so a quick entry of hours and tips and payroll is complete in less than an hour, from start to finish. 

Square > Reports > Sales Summary > select date range = tips collected during time period in question

Hope that is helpful.