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Get Started with Service Charges

Create a service charge to help offset any operational or overhead costs. Service charges can be percentage-based or a fixed amount that won’t change based on the purchase cost. When you add a service charge during checkout, both you and your customer will see the charge as a line item on the transaction.

You can create service charges from your online Square Dashboard and then instantly add a service charge to any purchase during checkout from:

  • Square Point of Sale

  • Square Restaurants POS app

  • Square for Retail POS app on compatible iOS devices, Square Terminal and Square Register

  • Virtual Terminal

Important to note

  • Service charges are not yet available for Square Appointments, Square Invoices, Square Online, Square Payment Links or Afterpay transactions.

  • You will need to update the Square Point of Sale app to the latest version of the app to use the service charge features. Follow our simple guide to get started with the newest version of Square Point of Sale.

Set up service charges

To create and edit service charges:

  1. Go to Account & Settings on your online Square Dashboard

  2. Click Business information > Service charges > Create service charge

  3. Name your charge. This name will be displayed on customer receipts and order summaries.

  4. Choose the amount type; amount, percentage, variable amount or variable percentage.

  5. Enter the amount of the charge or leave the service charge amount blank to enter it at the time of the sale.

  6. Select the location where the charge applies and add any applicable sales taxes.

  7. Click Save.

Important: Be sure to let your customer know about any service charges before you proceed with the payment.

Apply Service Charges

Once you create a service charge from your online Square Dashboard, you can manually apply it to transactions via Square POS app or Square Retail POS app (on iOS devices, Square Register and Square Terminal). You can add service charges to orders that include items, custom amounts or both. You cannot apply a service charge multiple times on the same sale or invoice.

From the Point of Sale app

Service Charge POS App Apply

  1. From the Square POS app, tap Checkout > Library.
  2. You can search for service charges by name or tap the Service Charge category.
  3. Choose all of the service charges that apply to the sale.
  4. Tap Review Sale to check the details of the transaction.
  5. Tap Charge.

Service Charge POS App Receipt

The service charge will show as a line item on your customer’s receipt and in your transaction report details.

From the Square Retail POS app

  1. From the Checkout screen, long press on a tile then tap Edit tile grid.
  2. Under Add to page, tap Action.
  3. Tick the Service charges action tile checkbox.
  4. Select applicable service charges.
  5. Tap Done.

From there, you can move the tile to rearrange or tap the Service charges tile to make edits at any time.

To check out a customer with a service charge:

  1. Add items to cart.
  2. Tap the applicable items, then tap Apply Service Charge.
  3. Choose applicable service charges, then tap Save.
  4. Tap Add to Cart
  5. Tap Charge to complete the payment.

To remove the service charge from the cart, swipe left, then tap Delete.

From the Square Restaurants POS app

  1. Open your Restaurants POS app and select the order to which you want to apply a service charge.
  2. Tap Actions > Service Charges.
  3. Select the service charge you want to apply.

From Virtual Terminal

To create service charges for Virtual Terminal payments:

  1. From your online Square Dashboard, go to Settings > Account & Settings
  2. Click Business information > Service charges and choose Create service charge to enter the service charge information:

  • Enter the name for your service charge (like a packing fee)
  • Enter the percentage or amount
  • Choose whether or not the service charges will be taxable
  • Choose the location(s) where this service charge will apply, click Save and select Add.

To add the service charge you created to the sale:

  1. From your online Square Dashboard, select Virtual Terminal > Take a payment. If you don’t see Virtual Terminal, select Payments > Virtual Terminal > Take a payment.
  2. Choose if you want to charge an itemised sale or process a Quick Charge. Under Transaction details, choose the purchased items or manually enter the amount to be charged. Note: You can edit taxes to be charged for each item by clicking the item name.
  3. Select Add service charge.
  4. Choose the service charge you created or Create service charge. Important: Make sure to let your customer know about any service charges before you proceed.
  5. Click Add to add the service charge to the sale, then enter payment details and customer information and choose payment method. Note: You can select Add additional service charge to add more than one service charge to the sale and repeat the process.
  6. Click Charge to charge the total amount, including applicable taxes and service charges. The service charge will show as a line item in your customer’s invoice and receipt and in your report details.

You can enable or disable service charges from your online Square Dashboard by selecting Virtual Terminal > Settings > Checkout, and toggling on or off the Allow service charges option.

Service Charge Type

Service Charge Description
Manual Service Charge Can be percentage based or a fixed amount. Service charges are created in your Square Dashboard and applied on the Point of Sale. For example, if a delivery fee is always 3%, that percentage would be set as a manual service charge added to the bill.
Variable Service Charge Exact amount is decided at checkout. Once a service charge is added to the bill, you can select the value or percentage used for this particular fee.

Taxes

Tax Description
Non-taxable The amount of the service charge is not impacted by any tax rates.
Tax assigned These service charges are taxable, and the entire service charge will be taxed at the assigned rate.
Tax apportioned The service charge inherits the tax rate from the items in the cart. If there are two items in the cart and one has a tax rate of 0% and the other has a tax rate of 4%, the service charge will be taxed in proportion to the value of the two items and their respective tax rates.

Important Notes About Service Charges

If you use service charges at your business, here are a few things to keep in mind:

  • Square sellers are responsible for adhering to all regulations regarding imposing service charges on consumers when a card is used for payment. 

  • Service charges are allowed but must not be excessive.

  • When deciding on the prices for your products and services, consider all of your operational costs and ensure you have a sustainable profit margin.

Learn more about applying a service charge with Square.

Service Charge Fees

Square processing fees are taken out of the total amount of the transaction, including tax, tips and any added service charges. Payment you receive for service charges is subject to Square processing fees.

Service Charge Reporting

To view and export a report of transactions with service charges applied:

  1. Go to Reporting > Reports in your online Square Dashboard.

  2. Click Service charges.

  3. Select your date range.

  4. Click Export.

FAQs

What is the difference between a service charge and a surcharge?

A service charge is an extra fee added to a sale to cover any additional expenses outside the cost of the initial goods being sold, such as a bagging fee or delivery fee. Service charges can be a single flat fee or based on a percentage of the total sale amount.

A surcharge is a fee added to the bill when a buyer pays with a credit card to cover the cost of payment processing fees. This varies from a convenience fee, which covers the costs of accepting payment outside of a merchant’s usual channel (e.g. by phone instead of in-store), no matter what payment method is used.

When would I use a service charge?

Common use cases include card surcharging (for the payment processing fee) and public holiday surcharges. Learn more about payment surcharges via the ACCC website.

What does variable mean?

A variable service charge as a feature allows you to edit the percentage or dollar amount during checkout.

Can I make a service charge non-taxable?

Yes. You can create a non-taxable service charge, meaning the charge won’t be taxed at checkout. You can also assign one or more taxes to a charge, the taxes will be taken out during checkout.

What devices can I use to create and apply a service charge?

You can create service charges from your online Square Dashboard via a web browser on your mobile device or computer. After you create a service charge, you can apply it to a purchase on the Square Point of Sale app, Square Restaurants POS app, Square Retail POS app (on iOS devices, Square Terminal and Square Register) or Virtual Terminal.

Service charges are not yet available for Square Appointments, Square Invoices, Square Online, Square Payment Links or Afterpay transactions.

Can I automatically apply a service charge to all card transactions?

Not at this time. You will need to manually add the service charge in the cart checkout during each sale via your Square POS app.

How many service charges can I apply to one sale?

You can apply multiple individual service charges, but you cannot apply a single service charge more than once. For example, you can apply a pickup service charge and a bag service charge to the same sale, but you can’t apply the bag service charge more than once to that same sale.

How do I calculate the processing fee on service charges?

Because the Square fee is charged on the total amount, rather than the subtotal, there will still be a small out-of-pocket amount for sellers using service charges. The processing fees will still be charged on the cart total plus new service charge. On a $100 GST inclusive transaction with a processing rate of 1.9% and a service charge at the same rate, the buyer will be charged $101.90, but the processing fees will be $1.93.

It will also not automatically apply a surcharge to all transactions nor can it be set up to automatically apply based on a specific time (e.g. Sundays, public holidays).

Disclaimer: Please note that this guidance is general in nature and does not constitute legal, tax or any other type of professional advice. If you are unsure about your legal obligations or where to find the relevant information, we suggest that you consult with a professional.

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