Tip out restaurant team members
About tipping out team members
Not every restaurant follows the same closing procedures when tipping out team members. If your restaurant accepts optional tipping, there are a few of the common ways restaurants tip out their team at the end of a shift.
Before you begin
If you decide to tip team members directly or use 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 through your Square Dashboard. Learn more about set up tip pooling.
Tipping methods rely on information from team members’ shift reports; the ability to run and view shift reports requires a Square for Restaurants Plus or Premium subscription.
Tip out from a cash drawer
First, have your team members run their shift reports to view payment card tips (i.e. Non-Cash Tips) in the Square Restaurants POS.
In the Square Restaurants POS, tap Account > Cash Management > Pay In/Out.
Label the payout (Team Member Name) Tips. Payouts will create a record of cash deducted from a drawer, separate from cash sales.
Tip team members directly
In your Square Dashboard, go to Staff & payroll > Shifts > Settings > Tips.
For the distribution method, select Tip directly.
Choose whether you want to apply tip settings to Only this location or All locations, as well as an effective date. The effective date can be up to two weeks in the past.
Click Save.
Learn more about how to Run payroll for W-2 employees and how to Run payroll for contractors.
Manage tip pooling settings
With tip pooling, you can equally divide each credit card tip across all tip-eligible team members clocked in at the time of the transaction.
In your Square Dashboard, go to Staff & payroll > Shifts > Settings > Tips.
For distribution method, Pool tips per transaction, Pool tips by hours worked, or Pool tips by percentages.
Choose whether you want to apply tip pooling to Only this location or All locations, as well as an effective date. The effective date can be up to two weeks in the past.
Click Save.