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 on to the next section.

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⚠️ Prerequisites

⚠️ To access the Tip Pooling feature using POS integration Contribution, you will require:

  • An 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 (since this feature relies on employees' worked hours in order to redistribute tips)
  • Have Role and Employee mapping completed. This will ensure that Employees will be assigned the correct tips, based on their hours and Roles.

 

⚠️  By default, Managers/Assistant Managers will have access to manage or edit the Tip Pool settings. However, Admins can change this by enabling or disabling the Manager Permission 'Can create and edit tip pools.'

How to Setup Tip Pooling for Square POS

  1. In the top navigation bar, select Tip Pooling > click + Create pool:



  2. Set your location, name your tip pool, your Calculation Frequency, and click Next.
    The name is required since you'll later have the option to create multiple Tip Pools for the same Location.

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    Click here for more information about "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:dropwdownmenu.png
    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.selectdate.png

     ⚠️ If you want to create this Tip Pool for a specific Daypart, select 'Dayparts' from the dropdown menu , and choose which Daypart will apply to this tip pool. If enabled, an additional column for Dayparts will be included on the Tip Pool report.

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  3. Next, select Pull in tips automatically from my POS and select Next

  4. Select the desired fields on your POS you wish to pull tip data from. This will be the initial source to calculate the Locations total tips, which will then be distributed amongst your staff

  5. For 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 drop-down menus below to set your measures and filters:

    • Select your Contributors:deptcontribution.png
    Contribute by Role

    The team members under the Role can be both 'Contributors' and 'Recipients' (in step 9). 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 Department
    All 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.

    • Enter a percentage "Amount" of the tips/sales collected that will contribute to the Tip Pool:amount_.png

     

    • And, set your contribution type using the "Tip-in based on" filter:tipinnet.png
    Net Sales

    A portion of the employees' Net Sales

    Total Tips
    Any portion of tips made per shift.
    Remaining Tips 

    Once employees contribute to a tip pool, there may still be tips remaining. This contribution type allows those remaining tips to be contributed to the pool a second time.

    Please note:
    ⚠️ Remaining tips can only be contributed once per role.

    ⚠️ Remaining tips is only available for POS Tip Pooling.

    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, and between different bartenders. 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... Screen_Shot_2023-01-19_at_5.40.13_PM__2_.png

    ...and tips will be distributed equally amongst the Bartenders:Screen_Shot_2023-01-19_at_5.48.20_PM__2_.pngA final review of the tip pooling details:
    Screen_Shot_2023-01-19_at_5.50.42_PM__2_.png

    And by this Tip Pool, the Bartenders now share their remaining tips!

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    • Click on '+ Add Contributor' to include more Roles/Departments.
    • 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.
    ⚠️ You can have as many Contributors as there are Roles under that Location. 
  6. With Square POS, you can filter the tips received by Sales Category. These filters are to determine what amount of tips will go into the Tip Pool, before any redistribution calculations.

    For each Contributor, you can set up these filters by clicking on the filter icon Screen_Shot_2023-01-12_at_10.56.15_AM.png  and selecting your filter rules.  Please note that filtering by Sales Category is only available when Tip-in based on 'Sales' is selected, and one or more contribution filters are being applied.

    To filter by POS tips/sales that do not have a category, you can select '
    Uncategorized' - when measuring by Revenue Center or Sales Category:


    Screen_Shot_2023-01-09_at_10.38.56_AM.png

    Click here to 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:

    1. Orange juice: Sales Category =beverage
    2. Spaghetti: Sales Category =food
    3. Budweiser: Sales Category =beer
    4. Weekly special dish: Sales Category = (not yet entered, it’s a brand new special!)
    5. 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.

  7. Enter the percentage of their tips or sales that will be contributed to the pool for this location



    You can add more contributors by clicking the + Add contributor button.
    To quickly duplicate a contributor contribution amount and source, click the Copy Icon Screen_Shot_2022-08-12_at_8.42.06_PM_copy.png

  8. For transactions not assigned to any employees, you will need to select the percentage of tips or sales that will go into the pool at this location

    You'll also have the option to create a tip pool with Unassigned-only Contributions. To create a tip pool that only considers unassigned tips (i.e. no set contributors, mobile takeout, delivery orders, or orders where no employee is ringing them through), click on the trash can icon Screen_Shot_2022-11-24_at_2.47.45_PM.png to remove 'Your mapped roles' contributors as an option:

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  9. Next, you can determine how you'd like the tips to be distributed to to recipients. All distribution methods will reallocate the tips based on employees' actual worked hours. Select any 1 of the 3 following options: Equal Distribution, Percentage, or Points Weighting

    Click on the panels below to learn about each distribution type:

    Equal Distribution

    How 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 $160

    Percentage

    How 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 $400

    Note that since only 1 bartender worked, they will receive $400 regardless of the number of hours they work

    Points Weighting
  10. Select the receivers of the tips by selecting the desired Departments or Specific Roles

  11. If you opted for Percentage or Points Weighting distribution, you can enter the percentage or amount of points beside each Department/Role. When you're ready, select Next 
  12. You'll now see an overview of how your Tip Pool is set up. Here if you spot anything that needs to be changed, you can go back to any step or click Save my tip pool to finalize it

Success! You've created a tip pool!


FAQs

Q: How frequently are the tips or sales calculated?

A: The tips are calculated daily.

 

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