System updates

We’re experiencing issues that may affect your Square services. We’ll continue to update our status page with more information.

Home>Team Management

Get Started with Tip Pooling for Team Management

With Team Plus, you can use tip pooling to equally divide each credit card tip across all tip-eligible team members clocked in at the time of the transaction. Tip pooling ensures equitable and timely tip pay-outs for your team and removes any alternate and complicated workflows you currently use to manually distribute tips – giving you more time for other aspects of your business.

Additionally, you can also require team members to declare cash tips when clocking out or switching roles at a point of sale or on the Team App. You can turn on this setting from the Shifts section of your online Square Dashboard.

Glossary

Review the table below to learn more about commonly used terms associated with tip pooling.

Term Definition
Tip distribution Tip distribution is how tips are allocated and paid out across a team. Depending on the needs of your business, you can pay out tips based on who processed the transaction (direct attribution), or you can collect and split tips as a part of a tip pool (tip pooling).
Tip pooling Tip pooling is a form of tip distribution where tips are aggregated into a collective pool and divided among a group of tip-eligible team members. Depending on the needs of the business, sellers will use a variety of different splits, the most common options being to split by hours worked in a workday and to split by hours worked in a business shift.
Workday A workday is a rolling 24-hour period of time where all business activity takes place. For most businesses, the standard day (12 a.m.-11:59 p.m.) aligns with their workday. For businesses open past midnight, the workday hours should align with the time all team members have clocked out for the day. For example, for bars, the workday may span from 4 a.m.-3:59 a.m. to account for the few hours they’re open past midnight.
Workweek A workweek begins on the start of the workday you set and will conclude seven days later. You can set your workday by going to Shifts > Settings > Rota in your online Square Dashboard. For most businesses, the start of the workweek is typically Sunday or Monday, but some businesses may start their workweek on more non-standard workdays, such as from Wednesday to Tuesday.

Turn On Tip Pooling

Before setting up tip pooling, you need to check that each team member is selected or deselected to be a part of tip splitting for transactions. 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. To get started:

  1. Go to Staff > Team in your online Square Dashboard.

  2. Select the team member you want to edit to open their team member profile.

  3. Click Edit under the ‘Job and compensation’ section.

  4. Toggle on or off  Tip eligible for each role.

After confirming that you applied tip pooling eligibility to all of your team members, you can turn on tip pooling. To do so:

  1. Go to Staff > Shifts in your online Square Dashboard.

  2. Select Settings > Tips.

  3. For distribution method, select Tip directly, Pool tips per transaction or Pool tips by hours worked.

    1. Tip directly: Transaction tips are attributed to the team member who collected the tip.

    2. 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.

    3. 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 workday works best if you want to reward team members who may not work their entire shift interacting with customers; splitting tips across a workweek better accounts for tip variability across a wider time frame.

  4. Choose whether you want to apply tip pooling to Only this location or All locations, as well as an effective date. Note: The effective date can be up to two weeks in the past. 

  5. Click Save.

You have the option to toggle on or off Distribute unattributed tips equally, which is only relevant if you’ve selected Pool tips per transaction as the tip distribution method. If you toggle on Distribute unattributed tips equally, tips received when no one is clocked in will be equally distributed among all tip-eligible team members who clocked in that workday.

Once you follow the steps above, credit card tips will either split equally among all tip-eligible team members clocked in at the time of the transaction, or split among all tip-eligible team members based on their hours worked within a 24-hour workday or across a 7-day workweek. Note: Be sure to check your county and local laws regarding tip pooling, notice and record keeping requirements.

If applicable, you can toggle on Declare cash tips. Tip-eligible team members will then be required to indicate the cash tips they earned for their shift before they clock out or switch roles at the point of sale or on the Team App. Your shift reports, such as Workday, Labour cost and Timecard CSV reports, will also include cash tips entered by your team, and the cash tip data will be adjustable.

Update Permission Sets

For team members who help manage shifts and scheduling that don’t have owner-level or full-access permissions, you need to update their permission set to include Manage tip settings. To do so:

  1. Go to Staff > Team in your online Square Dashboard.

  2. Select the team member you want to edit to open their team member profile.

  3. Under the Permissions section, click Edit.

  4. Next to ‘Permission set’, select Edit.

  5. Click on Shifts and check Manage tip settings.

  6. Click Continue > Save.

Tip Management and Reporting

With tip pooling set up, you can rest assured that your team members will receive the appropriate amount of tips throughout each workday. Follow the steps below to keep track of tips for team members by shift or by various time ranges.

View tips for team members by workday

  1. Go to Staff > Shifts in your online Square Dashboard.

  2. Select Workday.

  3. Choose a team member’s shift and select Tips earned from the pop-up screen.

  4. Credit card and cash tips will be the total of that team member’s share of tips during the selected shift.

View tips for team members by date range

  1. Go to Staff > Shifts in your online Square Dashboard.

  2. Select Labour & tips.

  3. Choose the date range and select any other applicable filters above the report.

  4. Each team member that worked during the chosen date range will appear with their associated tips.

Can't find what you need?