Get Started with Service Charges
Create a service charge to help offset certain operational or overhead costs. Service charges can be percentage-based or a fixed amount that won’t change based on the purchase cost. When you add a service charge during checkout, both you and your customer will see the charge as a line item on the transaction.
You can create service charges from your online Square Dashboard and then instantly add a service charge to any purchase during checkout from:
Square for Restaurants
Square Retail POS app on compatible iOS devices, Square Terminal, and Square Register
Square Online and Square Online Checkout
Important to note
Service charges are not yet available for Square Appointments or Afterpay transactions.
You will need to update the Square Point of Sale app to the latest version of the app to use the service charge features. Follow our simple guide to get started with Square Point of Sale.
Set Up Service Charges
To create and edit service charges:
Go to Account & Settings on your online Square Dashboard.
Click Business information > Service charges > 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 the toggle if you want to automatically apply this charge to online orders; then, select which fulfillment types you want the charges to apply to.
Note: Automatic service charges only apply to Square Online orders fulfilled via pickup, delivery, or self-serve ordering. You must also have item-level taxes enabled to apply automatic service charges for these fulfillment types.
Apply Service Charges
Once you create a service charge from your online Square Dashboard, you can manually apply it to transactions via Square POS, Square Retail POS app, Square Invoices, and Square Online. 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.
Service Charge Type
|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.|
Important Notes About Service Charges
If you use service charges at your business, here are a few things to keep in mind:
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.
Even when local laws, regulations, and applicable card network rules permit you to apply a service charge, the charge should be reasonable and cannot be excessive.
When deciding on the prices for your products and services, consider all of your operational costs and ensure you have a sustainable profit margin.
Learn more about applying a service charge with Square.
Service Charge Fees
Square processing fees are taken out of the total amount of the transaction, including tax, tips, and any added service charges. Payment you receive for service charges is subject to Square processing fees.
Service Charge Reporting
To view and export a report of transactions with service charges applied:
Go to Reporting > Reports in your online Square Dashboard.
Click Service charges.
Select your date range.
Disclaimer: Please note that 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, we suggest that you consult with a professional.