Customize and apply automatic gratuity
About automatic gratuity
Automatic gratuity is a fixed percentage tip you can apply to checks manually, automatically, or based on party size. Examples of common service charges include:
Large dining party automatic gratuity
Banquet event fee
Cruise trip package fee
Hotel room service charge
Bottle service charge (nightclubs, restaurants)
Generally, service charges are reported as non-tip wages paid to the employee and some employers keep a portion of the service charges. Only the amounts distributed to employees are non-tip wages. You can read more about service changes from the IRS.
Before you begin
Automatic gratuity may be considered a taxable service charge. For specific tax questions related to your business, be sure to consult with a tax professional.
You create automatic gratuity from your service settings in your Square Dashboard and apply them from your Square Restaurants POS app.
Step 1: Enable and customize automatic gratuity
Sign in to Square Dashboard and go to Settings > Device management.
Select Service settings > Automatic Gratuity.
Select the location where you want to use automatic gratuity.
Toggle ON Allow Automatic Gratuity.
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Enter the Gratuity Amount and select how you want to Apply Automatic Gratuity.
If you select On a per-check basis, you can manually add the auto-gratuity to the check during service.
If you select To all checks or Based on party size, the automatic gratuity percentage applies automatically.
Select if you want to Tax Automatic Gratuity and the Taxes or Tax Calculation.
Select Save.
Step 2: Apply automatic gratuity per check
If you select to apply automatic gratuity on a per-check basis, you can select the order during service and apply auto-gratuity before payment. From your Square POS app with full service, quick service, or bar mode enabled or from the Square Restaurants POS app:
Open your point of sale app and select Actions > Auto-Gratuity.
Toggle on the automatic gratuity you want to apply to the check.
Tap Save.