Set up tip pooling
About tip pooling
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. All transaction tips, including any tips from Order partners, are included in the tip pool.
Square offers four types of tip distribution:
Pool tip per recipient: Transaction tips are attributed to the team member who collected the tip.
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.
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.
Pool tips by percentages: Tips are split by a user-defined percentage at the end of each workday or workweek among tip-eligible jobs. Tip-eligible team members with the same job will receive tips based on hours worked, and tip percentage amounts assigned to each job must add up to 100%.
Before you begin
You can adjust tip pooling settings from your Square Dashboard.
Before setting up tip pooling, check that each team member has the appropriate tip eligibility settings in their profile. 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 from your Square Dashboard.
Learn how to add and manage team members or add and manage bookable team members.
Set your tip pooling
By default all locations are set to tip team members directly, where each team member keeps 100% of the tips they collect.
After confirming that you applied tip pooling eligibility to all of your team members, you can turn on tip pooling. You can also require team members to declare cash tips when clocking out or switching roles at a point of sale or on the Square Team app.
Sign in to Square Dashboard and go to Staff > Settings > Tips.
Choose a location, then click Tip allocation.
Click Team pools tips > Create tip pool.
Choose how often are tips tallied up:
Per transaction
Daily
Weekly
5. Select how you want to split tips, equally or by a fixed percentage.
6. Choose who receives tips based on their role and the percentage assigned to each team member.
7. Choose whether you want to apply tip settings to additional locations, as well as an effective date. The effective date can be up to two weeks in the past.
8. Click Save.
If you want tips received when no one is clocked in to equally distribute among all tip-eligible team members who clocked in on that workday, toggle on Distribute unattributed tips equally.