Effective Date: December 15, 2025

These terms govern your use of the experimental Daily Tip Payouts (“the Services”), which is a service that allows employers ("Sellers”, You”, “Your”) to send employees and contractors their earned tips on a daily cadence, which is offered by Block, Inc. (“Square,” “we,” “our,” or “us”). By using the Daily Tip Payouts Services, you agree to be bound by these Daily Tip Payout Term, the E-Sign Consent, and the General Terms of Service (“General Terms”) and all other terms, policies, and guidelines applicable to the Daily Tip Payouts Services, including, but not limited to, the Payment Terms. If you are using the Services on behalf of a business or entity, you represent to us that you have authority to bind that business or entity to these terms, and that such business or entity accepts these terms.

Your Responsibilities

You may only use the Services in the United States. You appoint us as your agent for the limited purpose of providing the Services, which includes any expedited processing and payment access services, to your employees and independent contractors. You authorize us to provide the Services to you, your employees, and your independent contractors. To use the Services, you must timely submit information we require to provide the Services, including your company’s employee and independent contractor time worked and payment information, as applicable, and other information we may request. You assume sole responsibility for and will ensure that your payroll information, Content, data, documents or materials used, disclosed, entered into or created using the Service are accurate, reliable and complete, do not violate these Daily Tip Payout Terms or the General Terms, and comply with the Office of Foreign Assets Control of the U.S. Treasury regulations and all other applicable laws or regulations. You hereby acknowledge and agree that all information you collect and share with us in connection with the Services is done in accordance with your legal obligations and complies with all applicable laws.

Daily Tip Payouts distribute tip earnings outside your regular payroll cycle, so it’s your responsibility to ensure these payouts are accurately reflected in your payroll records and tax filings. Square does not withhold or remit taxes, report tip income to tax authorities, or adjust for wage and hour laws on your behalf. You must confirm that your payroll system or provider can handle off-cycle tip payments and reconciliations, and you may need to manually input the tips paid each day to avoid errors like duplicate payments or incorrect tax withholding that may result in tax penalties in the case of under withholding. This includes ensuring the tips are properly integrated into wage calculations for tax reporting and minimum wage compliance, especially if you rely on tip credits or have overtime obligations. Tax compliance requirements refer to all jurisdictions (local, state, federal).

You are fully responsible for verifying the identity and work authorization of your employees and independent contractors in accordance with applicable law and all of the information you, your employees and independent contractors submit through the Services, including for any penalties due to incorrect, inaccurate, incomplete or outdated information.

You are further responsible for verifying the accuracy, timeliness, and completeness of any information you, your employees or independent contractors provide, directly input via the Services or by any other method, approve, or fail to correct. We are entitled to rely upon, and are not obligated to independently verify, any such information, and you waive any claim against us arising out of errors or omissions that you have not corrected or requested to correct. We will not be liable for any penalty, interest or other liability that results from inaccurate or incomplete information you, your employee or independent contractor may supply.

You are also responsible for maintaining accurate records of all tip payouts. Use Square’s reporting tools to track daily tip distributions and input this data into your payroll system appropriately. For example, at the end of a pay period, you may need to enter total daily tips for each employee and mark them as already paid. If your payroll provider lacks built-in support for this kind of adjustment, manual reconciliation is required. Failing to maintain and adjust your records properly could lead to tax inaccuracies or wage law violations. If in doubt, consult a payroll expert or your payroll provider to ensure compliance.

It is your sole responsibility to comply with all applicable laws, including federal, state, and local wage and hour laws. You are responsible for determining whether the Daily Tips Services are compatible with your reporting obligations, and we are not providing any legal, financial, accounting, tax or other professional advice to you by providing the Services. You should consult federal and local government websites and/or consult with qualified counsel to help you with your compliance obligations.

Square is processing your employees’ and independent contractors’ personal information on your behalf in order to provide the Services. You agree to obtain any necessary consent from your employees and independent contractors for Square to contact them, provide the Services, and to process personal information, including, but not limited to, sharing personal information with Third-Party Services providers. Some communications with employees may contain marketing. You acknowledge and agree that Square may transfer personal information over international borders as necessary for processing in accordance with Square’s standard business practices, and consistent with Square’s Privacy Notice for Sellers’ Employees.

Not a Payroll Service

Square is not acting as your payroll service provider with respect to the Daily Tip Payouts service. The Services facilitate fund transfers that you initiate, and do not calculate wages or withhold taxes for you, and it does not fulfill your payroll obligations. Using the Services does not create any employment or third-party beneficiary relationship between Square and your employees. You remain solely responsible for complying with all federal, state, and local wage and hour laws (such as minimum wage requirements, tip credit rules, rules governing payment corrections, overtime, and tip pooling or distribution laws) when using the Services. Square does not guarantee that using this service will meet any legal requirements specific to your business, and Square assumes no responsibility for ensuring your compliance with wage and hour laws. It is your responsibility to determine whether your use of the Service is consistent with your obligations, and to consult your own qualified advisors or counsel if needed. Square is not providing legal, tax, or HR advice by offering the Services.

Authorization to Transfer Funds on Your Behalf

By using Daily Tip Payouts, you authorize Square to move funds on your behalf in order to facilitate tip payments to your employees. You must process payments through an active Square account, and acknowledge that, if you have Square Checking Account(s), your Square Checking Account(s) will serve as the primary source of funds for tip payouts through the Services. In the event you do not have a Square Checking Account, or that account has insufficient funds for payment, your Square Balances will serve as the source of funds for tip payouts through the Services. All tip payouts will be funded by you, and neither Square nor any third-party will advance funds or provide financing for tip payments through the Services. It is your responsibility to ensure that sufficient funds are available in your Square Checking Accounts and/or Square Balances to cover the total daily tips you choose to send to your employees. Square will not extend credit if your account lacks funds, and tip payouts will fail or be declined if you have insufficient funds in your Square Checking Accounts and/or Square Balances.

When you initiate a daily tip payout, you are instructing us (and any partner bank or payment network we use) to withdraw the specified tip amounts from your Square Checking Account to then transfer those funds to your designated employees. You hereby appoint Square as your agent for the limited purpose of executing these tip payment transactions, including any necessary debits from and credits to your accounts to effectuate the transfers. This authorization also means you permit Square to take any necessary steps to process the payments, such as initiating ACH debits/credits or other electronic funds transfers, in accordance with network rules and regulations.

Square is facilitating the movement of money from you to your employees. All funds disbursed are your funds, and at no point does Square take ownership of the tip money or act as your payroll service provider. You continue to bear full responsibility for the payments made.

Additionally, if for some reason an adjustment or correction is needed (for example, if an overpayment is detected and an ACH return or debit is permitted to correct it), you authorize Square to initiate those correcting debits or credits as necessary, to the extent allowed by law and network rules. However, as explained in the next section, Square will not automatically claw back mistaken payments at your request, so your authorization mainly covers the normal operation of moving funds for payouts and any network-required corrections.

Finality of Payments

When you send tip funds to an employee using Daily Tip Payouts, that payment is final. Square does not offer the ability to cancel or reverse tip payouts once they’ve been processed, except in very limited circumstances where the banking network permits a reversal (for example, an immediate error identified in an ACH file before settlement). Once a payout has been initiated and processing begins, it cannot be undone through the Square platform. You are solely responsible for verifying payout amounts and recipient details before confirming a payout. Square is not responsible for recovering funds if you make an error, which includes if you send a payout to the wrong person or enter the wrong amount. If a mistake occurs, it is your responsibility to work directly with your employee to resolve the error in a manner consistent with applicable laws. Square does not mediate disputes or assist in reversing transactions. We recommend putting internal checks in place to help minimize mistakes, such as reviewing tip calculations and payout details daily. While we’ll provide records of what was paid out, Square is not responsible for recovering misdirected or overpaid tip funds on your behalf.

You are solely responsible for maintaining the confidentiality and security of your account credentials, including any usernames, passwords, or authentication methods used to access the services. You acknowledge that any tip payouts initiated through your account, are considered authorized by you and are final and irreversible once submitted. We are not responsible for any loss resulting from unauthorized access to your account or misuse of your credentials, including any unauthorized transfers of funds.

Important Experimental Product Notice

Daily Tip Payouts is an experimental product, which means it is a preliminary version that is still in testing. As such, it may contain bugs, inaccuracies, or unexpected behaviors. Square provides this product “as is”, with no guarantees that it will function without errors or meet all your needs. By choosing to use Daily Tip Payouts, you acknowledge that errors or failures in the Daily Tip Payouts product are possible and you assume all risks associated with its use.

As an experimental product, Daily Tip Payouts may have limits on transaction amounts, frequency, or other parameters. Square may impose or change limits (such as a maximum daily payout per employee, or a cutoff time each day to submit payouts) as needed during the testing phase. We may attempt to notify you of such limits in the Products documentation or interface. Please adhere to any limits or usage guidelines provided.

Square disclaims all warranties and liability related to your use of the Services to the fullest extent permitted by law. This means that if there are problems – for example, incorrect calculations, delays, outages, or other issues – Square is not liable for any losses or damages that result. You and your employees should not rely solely on this service for critical needs without verifying the results. We strongly encourage you to double-check tip amounts and maintain your own backup records of tip calculations during this testing phase.

Furthermore, because this is an evolving service, Square may modify, suspend, or terminate Daily Tip Payouts at any time, for any reason. We may also limit or restrict your access to the Services if we find misuse or any compliance concerns. We will try to notify you of major changes when feasible, but we reserve the right to make changes or end the Services without notice. By participating in this product experiment, you agree that Square has no obligation to provide continued access and that you have no expectation of permanent availability of Daily Tip Payouts at this stage.

Miscellaneous

Either you or Square can terminate your use of the Daily Tip Payouts feature at any time. You can simply stop using the feature (and if you wish to formally opt-out or have it disabled, you can contact Square to do so). Square may terminate your access to the Services if you violate these terms, if we suspect fraud or misuse, or as part of ending the Services. If your participation in Daily Tip Payouts is terminated (by you or by us), that will not automatically terminate your Square account or other services. You will just cease to have the ability to use this particular feature. However, you will remain responsible for any obligations incurred before termination – for example, if you initiated payouts that were not completed yet, or if there are any reconciliation issues outstanding, you must address those. Square’s General Terms regarding termination of services and survival of certain provisions apply here as well.

You may not transfer or assign your use of the Services to another business or entity. It is offered specifically to you (the Square account holder) for your internal use with your employees. If you sell your business or there is a change in ownership, the new owner would need to separately be approved by Square for continued use of Daily Tip Payouts (if the program is still available). Square may assign or delegate these terms to an affiliate or as part of a corporate change (for example, if this service moves out of the experimental phase under a different Square entity), consistent with the General Terms.

The Daily Tip Payouts Services may provide support articles or other content. These articles are limited in scope and are only intended as a high-level overview of the topics discussed. The information is current as of the publication date only. Square undertakes no obligation to update these articles for future changes in the law. In addition, laws vary by jurisdiction, and these articles do not attempt to address all jurisdictions; for example, states, counties, or cities often have requirements that differ from federal law. Nothing in these articles is or should be used as tax or legal advice. In particular, these articles cannot be relied upon for the purposes of avoiding taxes, penalties, or other obligations under applicable law. For guidance or advice specific to your business, you should consult with a qualified tax and/or legal professional.