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.

[fsalazar]

I am wondering where everyone is with this payroll and tipping situation. After all the discussion and issues when this was originally changed, we had received notification that we would be able to continue the pool/split by week as we were, and were under the impression that it had continued as before. 

We just recently discovered that there are actually still discrepancies in tipping, and I have spent hours trying to resolve this issue with Square Payroll but have been unable to. At issue, they indicate that the pooled tips are split among all hours worked for the week and then attributed to employees by their hours worked. If that were the case, all employees would receive the same hourly tip amount (as shown in their own example). That is not happening and every single employee has a different gross hourly rate when you add up the base rate plus tips. I cannot seem to get this very simple concept across to anyone at Square, and hoping maybe someone here would be able to understand and/or get through to Square to get this resolved. 

[MFNC206]

You are correct, we (also) have to audit the tip distribution each pay period to fix errors in Square payroll calculations. (Simple math). We only have 9 employees so it only takes 5 minutes.

We have found that if a time card gets edited for some reason (during they pay period), e.g. "employee forgets to clock out, etc" Square algorithm does not re-adjust and redistribute. We just do it by hand each pay period is the easiest fix. -Bruce@MFNC

[2ndCharter]

Another anomaly that we've found is with new employees. If they start working after a cycle ends but before payroll is run, they often get a check from that previous cycle for "owed tips". There is a great deal more work on our part to handle payroll and it sucks.

[fsalazar]

I'm just shocked by their lack of common sense in this payroll issue, especially since it's so blatantly simple and was already working before they "enhanced" it. So strange.