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Apply a Service Charge with Square for Restaurants

Please note: Service charges may be considered a taxable surcharge. For specific tax questions related to your business, be sure to consult with a tax professional.

You can enable a fixed percentage service charge to apply to bills manually, automatically, or based on party size.

To enable this from your Square Dashboard:

1. Click Account & Settings > Devices > Service Settings.
2. Click Service Charge and toggle on Allow Service Charge.
3. Enter the service charge amount (e.g. 12.5%).
4. Choose to apply the service charge on a per-bill basis, to all bills*, or based on party size.
5. Choose to add or not apply tax to the service charge.
6. If you do not wish to apply tax to service charge, choose to calculate service charge before or after taxes.
7. Press Save.

If you select based on party size, auto-gratuity is controlled by the number of seats at a table. If Seat Management is enabled, the number of required seats will determine if automatic gratuity is applied to the bill by default. Note: This is a Restaurants Plus feature.

If you seat a table with fewer party members than necessary to automatically trigger your service charge, you also have the option to manually apply the gratuity. From the open bill, simply tap Actions > Service Charge and toggle on the applicable service charge.

Keep in mind, automatic gratuity or service charge may be considered a taxable surcharge. For specific tax questions related to your business, be sure to consult with a tax professional.

*Applying automatic gratuity to all bills will only apply to Square for Restaurants Point of Sale version 5.35 and higher. Please update your Square for Restaurants POS to use this feature.

Calculating Service Charge Fees

Square’s fee is taken out of the total amount of the transaction, including tax, tips and any added surcharges.

Service Charge Reporting

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

  1. Visit the Reports tab of your online Square Dashboard.

  2. Click Service Charges.

  3. Select your date range.

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