Tip Pooling for Square POS
Save up to 8 hours per week managing your tip pool with custom contribution and distribution rules, automatic calculations, comprehensive reports, and payroll export options. To collect your tip data with Square, please continue to the next section.
Square automatically transfers sales, payment, and tip information to 7shifts. Within 7shifts, the distribution of tips and gratuities among employees is automated with predefined setups for tip pools and allocations. This ensures your team is paid accurately while saving you up to 8 hours a week in manual calculations!
Things to Know
Important: Admins, Managers and Assistant managers with the "Can create and edit tip pools" permission can trial or purchase automated Tip Pooling.
- Rule changes: The open pay period will be updated even if the rule changed halfway through the pay period, or if a past pay period was opened after the rules had been changed.
- Deactivated employees: Deactivated employees are removed from the open pay period. This also applies if a past pay period is opened after the employee has been deactivated, which will affect your report figures.
- Remaining Tips: When configuring multiple tip pools that interact with each other (e.g., Remaining Tips pools pulling from other source pools), it is critical that all contributing tip pools share the same cadence (e.g., daily, weekly). Differing cadences can result into discrepancies as the calculation can only deduct full contributions.
- Double-counting: An employee or Role can be assigned to multiple Tip Pools. Be cautious not to double-count their contributions across different pools.
- Auto-gratuities: All service charges in Square are treated as Auto-gratuities.
- An active Actual Sales integration with Square POS. (If you're not using a supported POS system, learn how to access the Manual Contribution option here.)
- 7punches for time clocking or an Actual Labor integration with Square POS.
- Tip Declaration: To sync declared tips, Actual Labor must be enabled in 7shifts and "Declare cash tips" must be enabled in Square Dashboard Shifts Settings Tips.
- Completed Role and Employee mapping.
- Tips from Square are assigned to the employee who processes the payment, not the one who opened the receipt. Ensure each payment is processed under the correct employee.
How to set up your Square POS tip pool
- Log in to the 7shifts web app as an Admin or Manager/Assistant Manager with permissions.
- In the left navigation bar, select Tip Management > Tip Pooling > + Create Pool.
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Add the location, the tip pool name, and the calculation frequency.
How often are tips calculated?By default, the Calculation Frequency will be set to Daily. Change this by selecting a new option from the dropdown menu:
Set the date for which your last pay period ended, and we'll use this date to start pooling your tips. The date will automatically default to the last date of the pay period on your Time Clocking page, but you're welcome to adjust it as needed!Pro Tip! We recommend that you align these dates with how you view pay periods to ensure accurate reporting.If you want to create this Tip Pool for a specific Day part, select Day parts from the dropdown menu, and choose which Day part will apply to this tip pool. If enabled, an additional column for Day parts will be included on the Tip Pool report.
- Select the option Pull in tips automatically from my POS and click Next.
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Select which Roles and Departments will act as Contributors.
Important: For tips to be attributed in the tip pool, ensure that each sale is processed under the correct employee in your POS. In Square, tips are assigned to the employee who processes the payment, even if the order was opened by someone else.
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For Your mapped roles (transactions that are assigned to Employees), you will need to select which Roles and Departments will be your Contributors. Contributors are usually customer-facing employees that gather tips, and gratuities or collect payment during their shifts. Use the dropdown menus below to set your measures and filters.
Contribute by RoleThe team members under the Role can be both 'Contributors' and 'Recipients'. This step is to determine how much of the initial tips received will contribute to the Tip Pool to be divided out later across the team.
Example:Servers can contribute 100% of their tips and still receive 50% from that initial 100% that was put into the Tip Pool.Contribute by DepartmentAll roles within the Department will contribute the amount set into the tip pool.
Example: The FOH department contributes 50% of all collected tips to the pool. - For Unassigned tips & receipts, you will also need to enter what percentage of tips will go to the Tip Pool for transactions that are unassigned to any employees.
- For Unassigned-only Contribution. To set up a tip pool that includes only unassigned tips (such as those from mobile takeout, delivery orders, or transactions without an assigned employee) use the trash can icon to remove any contributors under Your mapped roles.
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- Adjust contribution percentages in the Amount field to determine what % of collected tips or sales go into the tip pool.
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Set the contribution type using the Tip-in based on filter (Net Sales, Total Tips, or Remaining Tips).
Net SalesA portion of the employees' Net Sales. When the role is allocating a portion of their net sales into the pool.
Total TipsAny portion of tips made per shift. When the role is contributing a portion, or all, of the tips they made that shift.Remaining TipsThe Remaining Tips contribution type allows tips that are left over after an initial contribution to be put back into a pool for a second time. This is common for "Ghost" accounts or shared terminals where multiple bartenders process receipts under one name.
Important: When configuring multiple tip pools that interact (e.g., Remaining Tips pools pulling from other source pools), all contributing tip pools must share the same cadence (e.g., daily, weekly). Differing cadences result in discrepancies as calculations can only deduct full contributions.
- Remaining tips can only be contributed once per role.
Remaining tips is only available for POS Tip Pooling.
When using Remaining Tips across multiple interacting tip pools, all contributing pools must share the same cadence (e.g., daily, weekly), as the system can only deduct full contributions—differing cadences may cause discrepancies.
For example:
A common use of Remaining Tips is when bartenders clock into a shared "Ghost Patio Bar" account when processing receipts. Why? A hectic weekend bar may see the same terminal passed around frequently, between different bartenders; and it would be too time-consuming to update the specific server for each bartender each time.
At the end of the night, tips need to be pooled and distributed as:Ghost Patio Bar contributes 5% of food sales to Support + Bussers.
Ghost Patio Bar contributes 100% of the remaining tips equally amongst themselves based on hours worked.
To accomplish this, create a new tip pool. While adding your Contributors, be sure to select Tip-in Based On: Remaining Tips.
In this scenario, Bartenders will contribute 100% of their remaining tips...
...and tips will be distributed equally amongst the Bartenders:
A final review of the tip pooling details:
And by this Tip Pool, the Bartenders now share their remaining tips!
Manage contributors- Click on + Add Contributor to include more Roles/Departments. You can have as many Contributors as there are Roles under that Location.
- Click on the copy icon to duplicate any contributors, including their filters.
- Click on the trash icon to remove any Roles/Departments from the list of contributors.
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Click the filter icon
to apply Square-specific filters like Sales Category or Revenue Center. This filter determines what amount of tips will go into the Tip Pool before any redistribution calculations:
Note: Filtering by Sales Category is only available when Tip-in based on Net Sales is selected.
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To filter by POS tips/sales that do not have a category, select Uncategorized when filtering by Revenue Center or Sales Category.
See an example of the Uncategorized filter in action!Tippy is a server at a company that pools by net sales and requires sales to be treated differently based on the item sold.
Tippy wraps up a sale with the following items: 1 orange juice, 1 spaghetti, 1 Budweiser, 1 Weekly Special, 1 extra sauce.
In the POS, these items are categorized as follows:-
Orange juice: Sales Category =
beverage -
Spaghetti: Sales Category =
food -
Budweiser: Sales Category =
beer - Weekly special dish: Sales Category = (not yet entered, it’s a brand-new special!)
- Extra sauce: Sales Category = (no category)
For their tip pool, Servers contribute 10% of their net sales on everything except for liquor or beer. To appropriately set this up in 7shifts’ Tip Pooling, the manager would set the Sales Categories like so: If Sales Category = food, beverage, or uncategorized, contribute 10%.
For Tippy’s specific sale, this would leave out the beer item. -
Orange juice: Sales Category =
- For Unassigned tips & receipts, you will also need to enter what percentage of tips will go to the Tip Pool for transactions that are unassigned to any employees.
- Unassigned-only Contribution. To set up a tip pool that includes only unassigned tips (such as those from mobile takeout, delivery orders, or transactions without an assigned employee) use the trash can icon to remove any contributors under Your mapped roles.
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- Click Preview your tip pool to use real-time POS data to simulate how the tip pooling rules will distribute tips. By default, the Tips Collected column will automatically include all tip sources (i.e. CC tips, Cash tips). Once you have set your tip sources in the following step, 7shifts will hold those settings as the new default whenever you revisit this tip pool's Live Preview.
- Select the checkboxed fields from the POS that 7shifts should pull tip data from and click Next. These fields may vary depending on the specific setup on your POS.
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Choose a distribution method: Equal Distribution, Percentage, or Points Weighting.
Equal DistributionHow Equal Distribution works:
Each person will receive a portion of the tips based on the hours they worked. Let's say the Tip Pool is $500 and employees worked a total of 25 hours.
$500 / 25 hours = $20 in tips per hour worked Server A: worked 10 hours and receives $200
Server B: worked 7 hours and receives $140
Food Runner: worked 8 hours and receives $160PercentageHow Percentage Distribution works:
Each role group is entitled to a specific percentage of the Tip Pool. Each person who worked that role will then receive a portion of the tips based on the hours they worked.Let's say the tip pool is $1000, Server distribution is set to 60% ($600) and Bartender distribution is set to 40% ($400).
Server A worked 8 hours and receives $240
Server B worked 12 hours and receives $360
Bartender worked 5 hours and receives $400Note that since only 1 bartender worked, they will receive $400 regardless of the number of hours they work
Points Weighting - Select the Receivers (Roles or Departments).You can have as many receivers as there are Departments and Roles under that Location, regardless if those Roles are already set up as Contributors. Click Next.
- If you chose to use the Percentage or Points Weighting distribution methods, you will need to enter a percentage or amount of points beside each Department or Role.
- If using the Percentage distribution, there will be a tally at the bottom to ensure that you are not under or over the 100% total. You will be unable to proceed unless your total is at 100% exactly.
- Review the tip pool overview and click Save my tip pool: