Does Square calculate tips before or after sales tax?

[The_White_Hart]

The three pre-calculated suggestions for tips are nice, but there's one big flaw: the tip includes the sales tax in its calculation.

That's a big no-no, and my customers complain about it.

For example, if the bill is $50.00, and the suggested tip percentages are 15%, 20%, and 25%, then the suggested tips should be exactly $7.50, $10.00, and $12.50. But they're not. They include our local sales tax (at 8.6%) in the calculation, which bumps up all the tips by a proportional amount. Some customers really take offense at this, almost accusing me of cheating them or of trying to sneak in a larger tip.

This creates a lot of ill will with my customers -- but it should be an easy fix. Any ideas, or any hope that Square will fix this flaw?

[kristijuly]

My tips have always been set to before taxes, but I am now seeing the tips in the virtual terminal are calculating after taxes. How can I change this?

[Richard_M]

Go to Settings > Checkout > Tipping and select the option you want (Before or After Taxes).

[PS6]

This solution only seems to work if you use square as both your pos and cc processor. If you use a different pos and square as a cc processor it doesn’t work.

[MayaP]

Hello @PS6  - I see this is your first post in the Seller Community so I'd like to officially welcome you! 🎉👏

I am sorry you are having some difficulties with taxes and tips. It sounds like you are using Square as API integration to process payments. If so then yes you would need to speak with your API or developer who helped set this up so they can look into this and resolve it. 

If you need anything else please let me know.

[baresmx]

So I would like to know if there is any way or is there an option,

Let's say I am a Barber, and i charge $20 a haircut, well square is going to fee me 3.5%+15¢, that's not the issue, the issue is, I don't want to lose any money, so what i want to do is charge a 4.0 fee to my client as a tax, so I can get my full $20, anyways my question is,  is there any way possible, that the tipping option came first, cause let's say they do tip me, I don't want to charge my client that tax fee, but let's say they don't tip, then I want charge them my 4.0 tax fee, is there any way this is possible??

Because so far what I am seeing is you set tax and set tipping option, but if you do tax, it automatically charges them tax first the gives them the tipping option so it charges them both, tax and tip, and i don't want that, I want to know if there is an option for that? If they tip no tax and if they don't tip, then charge them tax???

HELP PLEASEEEEE!!!

[Richard_M]

@baresmx I don't believe that is possible.  A tax, in the sense of local/state/federal tax, it is a fixed rate that is either part of the sale amount (included,  in say $24) or separate line item ($20 + Tax %).

Tax can be applied to amount before tip or with tip.

But, there is no conditional apply this if that condition is met. 

Technically you must collect (and pay) the taxes when you report your taxes. 

If you have, say your $20 hair cut fee, plus a "CC processing convenience fee" (if you read credit card agreements on these fees, you have to be careful about the wording, because it is illegal to change a price just because a credit card is used vs cash), then the tax would be calculated based on those 2 amounts (which is what you report as income tax), and then is when you have tip option.

[GroveandBaker]

Same thing we mentioned in this post

We ring up taxable items in a seperate transaction. It's extra work wed rather not do.

[Feedback2016]

A$=[tips];D$=Sum(A1-A12)-A$

🙂

[Chad]

Hey @Igg and @The_White_Hart! 

Currently I don't have any updates to add for this feature request right now. Just a heads up you can use the @ symbol to tag people in conversations and they will get an email notification. Have you found any workarounds @NorthSide? 

[Richard_M]

@Sean, @Chad, @Helen

In a post from Sean from 3/17/17 there was a screenshot with the option to calculate tips pre or post tax. On my current Android version, I do not see this option. Was this removed or is it available only on iOS?

[puka]

Hey @Richard_M - That's strange. 🤔 The option should be there once you go to Settings > Tipping. Are you not seeing that option?

[Chad]

Hello @ramonashummus, currently we don't have a pre/post option for discounts and tips. I will make sure to pass this suggestion along to our Product Team! 

[Igg]

Please do. I’ve been asking for this feature for a few months now.

[The_White_Hart]

Take a number. -) I've been asking for this feature for over a year. I actually changed my shop's entire pricing structure just to work around this problem. My customers often pay a large deposit in advance, and there's no way to collect the correct tax or tip at check-out. I now price everything with tax + tip already included so that discounts, deposits, ad prepayments don't screw everything up.