Set up and manage instant tip payouts

About instant tip payouts 

With instant tip payouts sellers can pay out collected tips to their team members instantly via Cash App, outside of traditional cycles. Team members receive their tips directly in their Cash App wallet the same day they're submitted by sellers for payment, providing faster access to their money. This eliminates the need for nightly cash counting, lost cash envelopes, and bank runs when issuing your team their tips.

Before you begin

• Team members must have accepted their Square team invite, have linked a Cash App account to their Square team account to receive instant tip payouts, and have a tip eligible job. Learn about getting started with Cash App and how to set up tip pooling.

• There’s no added subscription or per-payout fee for sending instant tip payouts to your team. Team members also incur no fees to accept or withdraw instant tip payouts via Cash App. 

• Only tips collected via transactions processed through Square are eligible for instant tip payouts. 

• Instant tip payouts isn’t a payroll product and is not a replacement for your existing Payroll processes or system of record. Instant tip payouts don't include wages or taxes, and employers are responsible for ensuring regulatory compliance.

• Instant tip payouts are either deducted from your Square Checking account or your Square balance. If you don’t have a Square Checking account, the tip amount is withdrawn from your payments balance. Learn how to set up a checking account and debit card.

• Instant tip payouts are deducted from each business location’s Square Checking account or payments balance. Learn to create and manage multiple locations.

• If you have an insufficient balance, tip payouts will fail. Ensure your Square balance or Square Checking account has enough funds to cover the total tip payout to your team. Learn how to manage checking account transfers.

• Tip payouts are final once they’ve been processed. If there is an error, you need to resolve it directly with the team member and correct it in your payroll records.

Invite team members to instant tip payouts 

1. Sign into Square Dashboard and go to Staff > Tip earnings > Tip payouts.

2. From the Make tip payout section, click Set up. 

3. Toggle on Enable tip payouts and if needed, choose an optional Tip holdback percentage to withhold a percent of tips to keep to cover payroll and tax liabilities.

4. Toggle on Run payouts automatically if you want daily tip payouts automatically sent to your team and a payout schedule. 

5. Click Save > Confirm and invite team.

Cash App invites will be sent to all tip eligible team members via email, and through the Square Team app, based on the contact information that’s saved in their team profile from Staff > Team > Team members in Square Dashboard.

Accept an invite for instant tip payouts

Team members can accept an invite to instant tip payouts from the Square Team app or via email invite. If a team member doesn’t want to use Cash App or prefers not to receive instant tip payouts, they can opt not to link a Cash App account and continue receiving tips at the regular cadence and method that was set up by the Square account owner.

Send instant tip payouts 

You can send tip payouts to your team from Square Dashboard. To do so:

1. Sign into Square Dashboard and go to Staff > Tip earnings > Tip payouts.

2. From the Tip payment screen, click Pay tips. 

3. Review the tip payment amounts for your team. If needed, click Edit to change the tip payment date and business location > Save changes. 

4. If needed, manually update your team’s tip payout amounts > Continue to review. 

5. For any team members that haven’t activated their Cash App accounts, click Manage > Send reminder to notify your team to complete setup of their Cash App account. 

6. Select Confirm withdrawal > Done to send your team their daily tip payouts.

View your team’s tip earnings report

You can view your team’s tip earnings report from Square Dashboard. To do so:

1. Sign into Square Dashboard and go to Staff > Tip earnings > Tip earnings report.

2. Use the date selector at the top of the page to view tips by your preferred date range. 

3. If needed, change or update the business location you want to view instant tip payouts for. 

4. Filter your report by Total transaction tips, Unattributed tips, or Already paid. 

5. Click Export to download your tip report as a CSV file.

Related articles

• Add and manage team members

• Require passcodes at point of sale

• Set up tip pooling

• Settle payments and manage tips