Apply service charges
About service charges
Service charges help offset certain operational or overhead costs, and can be percentage-based or a fixed amount that won’t change based on the purchase cost. The following service charge types and taxes are available:
Manual Service Charge: Percentage-based or a fixed amount. Service charges are created in your Square Dashboard and applied on the POS. For example, if a delivery fee is always 3%, that percentage would be set as a manual service charge added to the check.
Variable Service Charge: Exact amount is determined at checkout, based on the total transaction amount or other factors. Once a service charge is added to the bill, you can select the value or percentage used for this particular fee.
Nontaxable: 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.
Before you begin
Disclaimer: 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, consider consulting with a professional.
Multiple service charges: 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.
Visibility of service charges: When you add a service charge during checkout, both you and your customer will see the charge as a line item on the transaction.
Laws and regulations: Merchants are responsible for adhering to all laws and regulations regarding imposing service charges on customers. We encourage you to consult with legal counsel to ensure you’re in compliance with the rules where you do business.
Create a service charge
Sign into your Square Dashboard and go to Settings > Account & Settings > Payments > Service charges.
Select Create service charge.
Name your charge, choose a percentage-based or fixed-price service charge, then enter the amount of the charge.
Select the location where the charge applies and add any applicable taxes.
Click Save.
Apply a service charge
Once you create a service charge from your Square Dashboard, you can manually apply it to transactions. 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 Square POS app with full service, quick service, or bar mode enabled, or from the Square for Restaurants POS app:
- Open your Restaurants POS app and select the order to which you want to apply a service charge.
- Tap Actions > Service Charges.
- Select the service charge you want to apply.
From the Square POS app with retail mode enabled or from the Square Retail POS app
- From the Checkout screen, hold down a tile then tap Edit tile grid.
- Under Add to page, tap Action.
- Check the Service charges action tile box.
- Select applicable service charges.
- Tap Done. From there, you can move the tile to rearrange or tap the Service charges tile to make edits at any time.
To checkout a customer with a service charge
- Add items to cart.
- Tap the applicable items, then tap Apply Service Charge.
- Choose applicable service charges, then tap Save.
- Tap Add to Cart.
- Tap Charge to complete the payment.
- To remove the service charge from the cart, swipe left, then tap Delete.
From the Square POS app with services mode enabled or from the Square Invoices app
- Tap Create a new invoice.
- Tap Add a line item to apply a service charge.
- Select any preexisting service charges you want to apply to the invoice.
- Fill out the rest of your invoice and send it as you normally would.
From the Square POS app with standard mode enabled:
- From the app, tap Library.
- You can search for service charges by name, or tap the Service Charge category.
- Choose all of the service charges that apply to the sale.
- Tap Review Sale to check the details of the transaction.
- Tap Charge. The service charge will show as a line item on your customer’s receipt and in your transaction report details.
- Go to Payments > Invoices.
- Select Send an invoice and fill out your invoice details.
- Under Line items, select Add service charge.
- Create a new service charge or choose an existing service charge. Indicate the amount of the service charge and add sales tax if needed.
- Click Add to apply the service charge to your invoice.
- Complete the rest of your invoice and send it to your customer as you normally would, then click Send.
- Sign in to your Square Dashboard and select Payments > Virtual Terminal.
- Choose Take a payment. If you want to charge an itemized 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.
- Select Add service charge.
- Choose the service charge you created, or Create service charge. Note: Let your customer know about any service charges before you proceed.
- Click Add to add the service charge to the sale, then enter payment details, 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.
- 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 Square Dashboard by selecting Virtual Terminal > Settings > Checkout, and toggling on or off the Allow service charges option.
When creating a service charge, you can automatically apply the service charge to Square Online orders fulfilled via pickup, delivery, or QR code ordering. To do so, toggle on Apply automatically to Square Online orders and choose which fulfillment types you want the service charge to apply to.
Note: Item-level taxes must be enabled for these fulfillment types before you can set up automatic service charges. Automatic service charges only apply to Square Online orders fulfilled via pickup, delivery, or QR code ordering.
After creating a service charge, you can choose which charges to apply to your Square Payment Links. To start:
- Sign in to your Square Dashboard and go to Payments > Payment Links.
- Click Settings > General.
- Under Service charges, toggle on the service charges you’d like to automatically apply to Square Payment Links.
View service charge reporting
To view and export a report of transactions with service charges applied:
Sign in to your Square Dashboard and click Reporting > Reports.
Click Service charges and select your date range.
Click Export.