Updates to Square Payroll tip distribution?

[dkhtodd]

I was looking at the new SHIFTS section this morning and happened upon SHIFTS>Settings>Tip Distribution. I noticed that TIP DIRECTLY (Credit cards tips are attributed to the team member who collected the tip) was selected. This confused me because I don't ever recall setting that or telling the system to only give tips to the person who collected. When we set this up a year ago, tips were set to be pooled.

I continued looking around and noticed under PAYROLL>Settings>Payroll Settings that Enable Tip Importing is selected as is Pool & Split tips. This section makes sense to me and I recall seeing this before. This is how the tips should work.

My question is, which section is correct? If SHIFTS is correct, it seems as if the person who is on the register will receive the credit card tips - but that is not how I expected this to work.

Attaching screenshots for reference.

Please advise.

 

The title of this thread has been edited from the original: New SHIFTS: Did something change with Tip Distribution?

[#2]

Hi all, back again as promised with an update. First off, thank you for sharing your feedback on how the recent tip splitting changes impact your business. Our teams have heard you, and understand that having more flexibility with tip calculations is important for both business operations and employee satisfaction.

To address these concerns, we will make the following changes:

• Existing Square Payroll customers will be able to pool and split tips by workday or pay period until April 1, 2022 (extended from December 1, 2021). After April 1st, customers will have 3 options: [1] pay tips directly, [2] split tips by transaction, or [3] pool and split tips by workday.
  
  
• We will expand the existing pool and split by workday option so it is available for non-Payroll sellers. Currently, sellers who don’t use Square Payroll are unable to pool and split tips by workday. After this update, they will be able to download reports that they can upload to their existing payroll providers. 
  
  
• Once the grace period ends on April 1, 2022, the option to pool and split tips by pay period will be removed. We are working to consolidate and expand labor-related functionality within Square, and as we do so we are unable to continue supporting tip pooling and splitting by pay period. We understand this may disappoint some businesses and hope the ability to pool and split tips by workday may work as an alternative. 

Employers were not opted into the new tip splitting method automatically.

If you would like to confirm your settings and continue using the Workday/Pay Period option, follow these steps: 

1. Go to Payroll > Payroll Settings. If you still see the old settings, you are all set!
   
2. If you no longer see the Pay Period or Workday options, like the screenshot below, you may have inadvertently opted into the new tip splitting method:
   
3. If this was a mistake, and you want to switch back to Workday or Pay Period, follow these steps:
   
   Go to Shifts > Settings > Tip distribution and choose Tip directly.
   
   NOTE: You will not actually tip directly. On the next step, you will be prompted to select your actual preferred tip distribution method. This is a temporary workflow during the grace period.
   
   Return to Payroll > Payroll Settings. You will see the old Workday/Pay Period options and select your preferred method.

For those who would like to use the new feature to split tips per transaction, but have hours of operation when no one is clocked in, we wanted to highlight that you have the ability to toggle on or off the “Distribute unattributed tips equally” setting.

If the setting is toggled on, tips received when no one is clocked in will be equally distributed among all tip-eligible team members who clocked in on that workday. If no one clocked in that day, the tips remain unattributed. You can manually apply these tips at the time of processing payroll.

Thank you again for all of your continued support and feedback. We are always looking for better ways to improve our product to support your business and team. 

[#3]

Hi All! I want to thank you for raising your concerns. We completely understand the sentiments here and apologize for the disruption this has caused. We understand the sensitivity with the labor market, and how this impacts your business. We will take this back to our teams and reconsider options.

At a minimum, we can extend the grace period and provide guidance on how to still split tips by workday.  **These options have NOT yet gone away. As long as you don’t select the new “Split by transaction” option in TM, your tip calculations will not be affected.**

I hope to be back soon with some more information on this change today from our teams and give everyone a bit more insight.

[Its_whit]

Hi, I see the new tip pooling option calculated tips based on who is "clocked in" when the tip is collected. What if they forget to clock in and we make a timecard adjustment later in the day? Will the tip still go to whoever has a timecard assigned for the time the tip was collected? 

[Donnie-M]

@Its_whit I can verify that if you edit a time card it will sync up and the tips get allocated correctly.  It only works after you toggle the feature on, so if you go to the day prior to toggling on pool tips and distribute by who is clocked in, it will not fix the previous time periods or days. 

After the feature is enabled it adjusts automatically.

[Dulcedo_Coffee]

Can I convey how much I do not like the December 2021 change that will take effect with Square Payroll Tip Importing.  https://squareup.com/help/us/en/article/7662-updates-to-square-payroll-tip-importing

Not that this change may not may sense to some restaurants and cafes, but that we are not given the option to retain the old method of pooling and splitting tips by pay period or workday.  Moreover, before executing this plan a tech support document should have been published with a manual workaround for those who need to keep using the old method of tip distribution.

Please know, and I cannot stress enough, how disruptive this proposed change will be to my coffee shop business.  Unlike restaurants, my core sales are in the morning and my evening staff does all the supporting work and prep for the next morning's sales.  So the per-pay period tip share works well for us and I wish to remain under that system.

Additional consideration is that, as a super-small business owner who is short staffed and having to compete with big box retailers who pay double what I pay, this change limits my ability to compete for staff.  My staff are tipped employees, where the customer makes up half of their wages.  I can get my staff to work at less desirable shifts because of the proportional tip sharing, without it I would be hard-pressed to pay them more to make up for the loss of proportional tip sharing...or simply blow up my labor cost.

-Oscar

Happy Coffee Shop owner who is not happy about the Square Payroll Tip Sharing change.

[kellyj]

@dkhtodd 

If you are pooling and splitting tips by pay period, you can also manually enter these when processing payroll. Is this what you were doing previously? 

Tip pooling should be turned off if you want it to divide the way you are describing. This is a feature request that are tracking at this point. If you'd like to help us with feedback on this feature are future tests for team management or payroll, we have a dedicated group in our Beta Community for this feedback and would love for you to be involved. 

You can ready more about unsupported methods for tip pooling here. 

Square Payroll currently supports tip importing by pooling and splitting tips by transaction or paying the tips directly to the team member who collected the tip. If you are pooling and splitting tips through another method, you can also manually enter these when processing payroll. At this time, Square Payroll does not support the following tip importing features or methods:

• Deducting credit card processing fees from tips

• Pool and split tips by work day 

• Pool and split tips by pay period

• Auto-gratuity with Square for Restaurants

• Importing tips for salaried team members that do not use timecards

• Contractor tip importing

[Donnie-M]

@kellyj before the new feature was added to teams the payroll module only had the option to split tips by hours worked when importing to payroll is what I understood.

With the new feature you only get 2 options...split by team member doing transaction or all team members clocked in during transaction.  Both are different, and there is language in the new information guide that contradicts this.

Donnie-m

[MFNC206]

This is a very bad move Square!!! We have attracted alot of great talent by offering split tips amongst the entire crew. 28-32 dollars per hour by tip pooling and a $13.69 minimum wage. Please reconsider... Bruce at Monroe Fish and Chips.

[Donnie-M]

@MFNC206 If you don't care you can add your thoughts here:

https://www.sellercommunity.com/t5/Questions-How-To/Updates-to-Square-Payroll-tip-distribution/m-p/3... 

The new system will still split tips but it does it by who all is clocked in at the time of the transaction, but there is also a work around.  Do you use square payroll?

Donnie-M

[_Violet]

Hi @MFNC206 - Thanks for reaching out!

I've merged your post with an existing thread where other sellers are discussing the new Tip Pooling feature as well. Please see the post marked as Best Answer from one of our Beta Managers, kellyj. Feel free to provide your feedback on the Tip Pooling feature on this thread.

I hope this information is helpful but please do let us know if you have any additional questions. Always happy to help! 😊

[dkhtodd]

To be clear, Square has changed the way I have been doing tips for a year. Is that what you are saying? You're now say, if I want to continue having tips by pay period - that's been working for a year - I have to do Manual work now?

Please be clear in your response. 

I don't care about tips on a single day nor I care who was at the register at that time and collected tips. And with the comments I am reading, no one else cares about it either.

[MFNC206]

I agree!!! We have been able to recruit top talent for our restaurant by offering "tip pooling" which raises their average hourly wage significantly. We have an entire crew that was hired on this promise to split tips collected during the entire pay period during all day parts!!! If Square changes this "one click" calculation we will break our agreement with our staff!!! 

[2ndCharter]

---

@kellyj wrote:

@dkhtodd 

...At this time, Square Payroll does not support the following tip importing features or methods:
...

• Pool and split tips by pay period

---

It most certainly has been "supported". I've been doing it through Square Payroll for over 3 years. We've also been doing it without any sort of work-around or manual process. 

[ERBC]

Why would you guys do away with the pooling by pay period? This used to be the way it was handled. If you own a business that has slower week days and busier weekends pooling by pay period helps to fill the slower shifts. I don't want to have to manually enter this, that's why I pay square for payroll for the feature. Please reinstate this feature. Its easy enough to give us the option to select between a 24hr period or pay period.  

[JJ_]

I will pass your feedback over to our product team for their visibility.

Thank you for taking the time to share this experience @ERBC.

[Donnie-M]

One thing I think/or idea that could bridge this gap would be a report in the dashboard that would show the "split by pay period" as an option.  A custom report would be the best place to put it where the report would have total tips collected, employees (by location), and total hours worked.  The report dates would be custom just like we have now so for any reporting period we could see what the tips could be if split evenly by hours worked.

With this simple report in the dashboard, it would be relatively easy and cut down on the time to manually enter this into square payroll for those sellers effective.

In a nutshell, if I have to enter it manually, don't make it hard on me to get the number/info.

[JJ_]

Will make sure to pass this one as well @Donnie-M. Great suggestion. 

[lgmbts]

I just got off the phone with Square Payroll and can confirm that if you are pooling tips by day and NOT by shift worked during the day, the workaround is a huge problem that adds significant administrative time to the person in charge of payroll.  According to the payroll rep I talked with, a spreadsheet needs to be built to manage pool tips manually individually each day.  Then, at the end of the pay period, I have to run payroll and then override the tips earned for each individual team member.  When asked why the change, the rep said it was to enhance the product.  This "enhancement" is anything but for any business that pools/splits tips by day and hours worked, not who was signed in at the time of the transaction. 

[weaglesf]

I couldn't agree more. Why is REMOVING a feature an "enhancement"?!!! What is wrong with leaving this option that already exists? I have a business that sells vastly different products during the morning and evening shifts at a counter service establishment. It just so happens that the morning shift is higher work intensity at lower average transaction cost, while the evening is lower intensity at significantly higher transaction cost. WHY can't you just enhance the product and not re-make it like you have just done? Is tip pooling by day or pay period illegal or problematic? Does it expose Square Payroll to liability? If not, just leave the feature that already exists!!

[Donnie-M]

@lgmbts You can get this info from a team member sales report for a pay period (custom dates) and then export the file to a .csv and in excel set up a macro to auto calc and split by hours worked.  I can send you a copy of a spreadsheet I use and the macro I use in a PM if you need.  It does require the manual entry in your payroll software but it takes 30 seconds to split tips for me in a 2 week period including online unattributed sales.

[dkhtodd]

I'd love to have this if you don't mind.

[Berolina]

I usually do payroll on my phone while traveling, how am I supposed to set up a macro in excel for that?

[dkhtodd]

So if I am reading this right @lgmbts you're being told they took away the feature that so many of us were using? And we're expected to do manual work for this now?