Set up tip pooling
About tip pooling
You can use tip pooling to equally divide each card tip across all tip-eligible team members clocked in at the time of the transaction. All transaction tips, including any tips from Order partners, are included in the tip pool.
In some cases, a tip can't be attributed to a specific team member. This happens when no team member is passcoded in at the time of the transaction, when a team passcode is used, or when the team member assigned to the transaction is not tip-eligible. These are called unassigned tips. You can choose to pool unattributed tips so they are split equally across all tip-eligible team members who clocked in during that workday.
Square offers four types of tip distribution:
Pool tip per recipient: Transaction tips are attributed to the team member who collected the tip.
Pool tips per transaction: Transaction tips are split equally among all tip-eligible team members clocked in at the time of the transaction. This distribution method works best if you want to reward your team based on the tips earned during their specific shift.
Pool tips by hours worked: Transaction tips from sales are split among tip-eligible team members based on their hours worked. You can specify whether to split tips based on a 24-hour workday or across a 7-day workweek. Splitting tips by work day works best if you want to reward team members who may not work their entire shift interacting with customers; splitting tips across a work week better accounts for tip variability across a wider timeframe.
Pool tips by percentages: Tips are split by a user-defined percentage at the end of each work day or work week among tip-eligible jobs. Tip-eligible team members with the same job will receive tips based on hours worked, and tip percentage amounts assigned to each job must add up to 100%.
Note: Unassigned tip pooling is available when you tip team members directly. New sellers have this setting enabled by default. Existing sellers can opt in from tip settings in Square Dashboard.
Before you begin
You can adjust tip pooling settings from your Square Dashboard.
Before setting up tip pooling, check that each team member has the appropriate tip eligibility settings in their profile. For example, if you don’t want a manager to receive tips, you’ll need to toggle off Tip eligible in their team member profile through your Square Dashboard. Learn how to Add and manage team members.
Set your tip pooling
By default all locations are set to tip team members directly, where each team member keeps 100% of the tips they collect.
After confirming that you applied tip pooling eligibility to all of your team members, you can turn on tip pooling. You can also require team members to declare cash tips when clocking out or switching roles at a point of sale or on the Square Team app.
Sign in to Square Dashboard and go to Staff > Settings > Tips.
Choose a location, then click Tip allocation.
Click Team pools tips > Create tip pool.
Choose how often are tips tallied up:
Per transaction
Daily
Weekly
5. Select how you want to split tips, equally or by a fixed percentage.
6. Choose who receives tips based on their role and the percentage assigned to each team member.
7. Choose whether you want to apply tip settings to additional locations, as well as an effective date. The effective date can be up to two weeks in the past.
8. Select Save.
To pool unattributed tips, toggle on Distribute unattributed tips equally in your tip settings. This applies to tips that can’t be attributed to a specific team member – for example, when no one is clocked in, a team passcode is used or the assigned team member is not tip-eligible. When enabled, these tips are split equally across all tip-eligible team members who clocked in during that workday.
This setting works with all tip distribution methods, including when you tip team members directly. New sellers have this enabled by default.