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Understanding Fee Rounding

Square uses Half Even Rounding (also known as Banker’s Rounding). 

Processing Fee Rounding

For processing fees, we round to the nearest $0.01. For example, if you accept a payment for $10.00, we will deduct fees of $0.27 (2.65% x $10.00 = $0.265 = $0.27).

Note: Transaction and item tax is calculated with bankers’ rounding, or round half to even, which pulls even numbers down. Learn more about bankers’ rounding.

Here’s an example to better illustrate why we do this type of rounding:

Original Bankers’
54.1754 54.18
343.2050 343.20
+ 106.2038 + 106.20
= 503.5842 = 503.58

When using standard rounding, you round up or down to the nearest number. For amounts in the middle (ending in 5), it rounds up. This results in a bias towards a higher amount. Bankers’ rounding is closer to the actual amount.

Cash Rounding

Payments made in cash round to the nearest $0.05. 

Round Down

$1.01 or $1.02 round down to $1.00
$1.06 or $1.07 rounds down to $1.05

Round Up

$1.03 or $1.04 round up to $1.05
$1.08 or $1.09 round up to $1.10

Note: Sale totals including taxes are calculated to the penny. Only the total cash payment or change made for a cash payment is rounded to the nearest $0.05.

Learn more about: Payment Processing

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