Service Fee on Tips and Taxes

[windyhill1]

Trying to apply a 3.5% service fee to the entire amount, including taxes and tips. So far I can only apply the 3.5% to the purchase subtotal, then the tip is calculated on that amount...I want to apply the 3.5% to the cost of good AND the taxes AND the tip amount. Is this possible in the app? 

[TheRealChipA]

@windyhill1 Yes, and no.  There is an option for service charges to make them subject to sales tax calculations.

This will just increase sales tax by the amount of the service charge additional sales tax.  That’s not exactly what you asked, but I’m not sure why you would want to add a service charge to either sales taxes (which are constant) or tips (which the customer determines).  If you feel strongly that Square should consider this, you can submit a feature request here -> https://www.sellercommunity.com/t5/Feature-Requests/ct-p/Beta-Feature-Requests

Service charges, however, usually only apply to the sub-total (goods and services).

Best,

[windyhill1]

I guess what I am trying to do is charge the customer the same fee that I am paying square. Since square bases their fees on the total amount (sub-total + Tip + Sales Tax) I figured that should be an option to apply a service fee on the total amount. 

[TheRealChipA]

Ah…. So, I’ll point you to Square’s Help for service charges here — https://squareup.com/help/us/en/article/7625-get-started-with-service-charges.

Note that in the screen shot below Square explains using service charges to add card processing fee surcharges (the first word in their answer is “No”), citing some (but not all) cases and guidelines.  In my shop, we’ve always just included expected credit card processing fees into our cost of goods calculations when coming up with a selling price.  That’s worked for us, and doesn’t run afoul of any regulations.

As Square says, before implementing surcharges, you need to talk to Visa, Mastercard, etc, as well as check local, state and federal laws on the subject.  It seems to be an area that is highly regulated and watched.

[PartyManiaMD]

In addition to what Chef said, it's quite a slippery slope because the service fee would still be subject to Square's processing fees.

Credit card processing fees are standard in every industry and I would recommend thinking of your employees before adding a service fee because I've worked for restaurants with service fees and universally people tip less when they see that service fee.

Build the cost of the processing into the menu like all other overhead. It sucks but it's better for the customers, employees, and less of a headache for the managers!