Understanding Payouts: Money Movement and Payout Status

Updated March 11, 2025 14:03

This article explains how tip payouts work within 7shifts, with a focus on the flow of funds and the differences between an employer's (Admin/Manager) view and an employee's experience. We'll cover:

The process of initiating and processing tip payouts.
How payout statuses are reflected in 7shifts reports.
Answers to frequently asked questions.

How Tip Payouts Work

When you initiate a tip payout batch in 7shifts, the following occurs:

Fund Withdrawal: 7shifts attempts to withdraw the total batch amount from your 7shifts "float" (your account balance).
Employer Status:
- Paid: If the withdrawal is successful, the batch is marked as "Paid" in your employer view. Each employee included in the batch will also show a "Paid" status. This means 7shifts has successfully processed the withdrawal per employee from your float.
- Failed: If the withdrawal from your float fails, the batch is marked as "Failed." No employees will receive payouts, and you'll need to retry the batch.
Employee-Side Processing: If the batch withdrawal is successful, the funds are then sent to each employee that was included in the batch.
Employee Notifications: Employees receive notifications (push, SMS, and/or email) about their tip payouts. These notifications will clearly indicate whether:
- Action Needed: The payout is pending because the employee needs to connect or update their bank account. The notification will provide the reason the payout failed and action required to receive the funds.
- Funds Deposited: The payout was successful, and the funds have been deposited to the employee's connected bank account.

⚠️ Important Note: Employee-Side Processing

Even if you see a "Paid" status in your employer view, the actual deposit into an employee's bank account depends on their individual status, bank details, and processing times.

Employee Responsibility: Employees are responsible for ensuring their bank account information is accurate and up-to-date.
Payout Failures: If an employee's payout fails, they will be notified (via email/push/SMS) with the reason and action needed to receive the funds.
Failed Payment Retries: 7shifts will retry the payout once the employee corrects their bank details. You, as the sender, don't need to take any action.
Invited Employees: If an employee's status is 'Invited' and they are included in a payout batch, 7shifts will still withdraw the funds from your float and attempt to send the employee's payout to them, sending them a notification to set up their bank account to receive their payout. This money will remaining pending until they set up their bank account to receive the funds.
- Note: For 'Automatically Synced' tip batches, you can use the toggle to exclude 'Invited' employees from your payout batches.

Failed Tip Payouts: FAQs

Q: Why does a report show a tip payout as "Paid" even if the employee hasn't received it yet?

7shifts reports reflect the payout status from your perspective as the employer. When the funds are successfully withdrawn from your 7shifts float, the report shows "Paid." This means 7shifts has completed the transaction on your end.

Q: How long does it take for employees to receive their tip payouts?

First-time Connection: For employees connecting their bank account for the first time or correcting an issue, it can take up to 5 business days for the payout to arrive after you initiate the batch. This allows for bank processing and settlement times.
Subsequent Payouts: Once an employee's bank account is successfully connected, future payouts should process almost instantly.

Q: What happens when an employee's tip payout fails due to incorrect bank details?

Pending Funds: The funds will remain pending. (Remember, if the funds were successfully withdrawn from your float, it will show as "Paid" on your end).
Automatic Retries: 7shifts will automatically retry the payout once the employee updates their bank information.
Unclaimed Funds: If an employee never connects their bank account, the funds will remain pending. They must connect their debit account to complete the transfer of funds. If they do not want to receive their tips via 7shifts tip payouts moving forward, the employer can unlink their account and send future payouts using another method.

Q: Can I prevent double payments if I already paid an employee's tips through payroll, and then they receive a reissued tip payout after connecting their bank account?

Currently, 7shifts cannot prevent this. If you pay tips through payroll, it's your responsibility to ensure those tips are not also included in a 7shifts payout. If a double payment occurs, you are responsible for recovering the overpayment from the employee.