The OrderPin POS System supports setting the service fees. The service fee is an additional charge collected for services related to the primary product or service being purchased — also called a service charge. It is a percentage of the total bill, often instead of a tip in some areas.
In this article:
Understanding service fee
How service fees work in OrderPin POS System
Create a service fee to help offset certain operating or administrative expenses. In OrderPin POS System, the service fee is a percentage that changes based on the purchase cost. When you add a service fee at checkout, both you and your customer will see the fee on the transaction.
- In OrderPin POS System, service fee rates and service fee settings control how much and when a service fee is charged.
Service fee rates are individual percentages. For example, a 5% service fee rate could represent the service charges in your store only. Different owners can set different rates as they wish. - OrderPin POS System provides options of both service charge-taxable and service charge-nontaxable based on local laws(if any).
How service fee is calculated in OrderPin POS System
The OrderPin POS System calculates service fees for orders based on how you set up service fee rates and calculate rules in the Back Office. An order's actual service fee amount will vary depending on whether your account is taxable or non-taxable and how payments are rounded.
- For accounts where service fees are taxable, these service charges are taxable, and the entire service charge will be taxed at the assigned rate. And the tax on the service fees will be charged at the set tax rate and will be added to the order's total amount.
After the order amount is determined, the taxable amount is calculated based on the tax rate, and the service fee is calculated based on the service fee rate. At the same time, the service fee is also calculated based on the tax rate to calculate the taxable service fee amount. Then the total order amount is product price(order amount) + service fee + order tax + service fee tax.
For example, an order amount is $21.00, the tax rate is 6.00%, the service fee rate is 10.00%
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- order tax = 21.00 * 6.00% = $1.26
- service fee = 21.00 * 10.00% = $2.10
- service fee tax = 2.10 * 6.00% = $0.126, rounded to $0.13
- the total order amount = 21.00 + 1.26 + 2.10 + 0.13 = $24.49
- For accounts where service fees are non-taxable, the amount of the service charge is not impacted by any tax rates. And the service fee will be added directly to the total amount of the order without calculating taxes. Then the total order amount is product price(order amount) + service fee + order tax.
After the order amount is determined, the taxable amount is calculated based on the tax rate, and the service fee is calculated based on the service fee rate.
For example, an order amount is $21.00, the tax rate is 6.00%, the service fee rate is 10.00%.
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- order tax = 21.00 * 6.00% = $1.26
- service fee = 21.00 * 10.00% = $2.10
- the total order amount = 21.00 + 1.26 + 2.10 = $24.36
Where to find service fee reporting
Service fee reports are available in exported reports:
- In exported local report files, you can view the total service fee directly in the report summary column. Please refer to our Report topic.
Managing service fee settings
Manage service fee settings in your Back Office to ensure the correct service fees are charged on every order at the OrderPin POS System. Define the names of your service fees and enter the service fee rates your restaurant charges, then set up service fee calculation rules to determine when the service fee is charged.
Important:
- The proportion of service fees charged to customers and the rules for collecting service fees must comply with local government laws and regulations. (if any)
Adding and editing service fee rates
In the Back Office, you can directly enter the service fee ratio so that the restaurant can charge the corresponding service fee to the customers.
Important: Once a service fee rate is added to the backend, it cannot be deleted. If you want to cancel the service fee, you can directly set the service fee rate to 0%.
You can follow the steps below:
- Log in to the Back Office with your OrderPin POS System credentials.
- From the home page, select Settings > Payment & Fee > Fee Settings > Service fee.
- Input the service fee rate, for example, "8%".
- Click "Save".
Adding and editing service fee rules
Set up service fee calculation rules in the Back Office, such as whether to levy taxes on service fees, the types of orders that require service fees, etc.
1. Service fees are taxable/non-taxable:
Regarding whether the service fee is taxable, you can refer to the previous section. And you can set it by the following steps:
- Log in to the Back Office with your OrderPin POS System credentials.
- From the home page, select Settings > Payment & Fee > Fee Settings > Service fee.
- Tap on the button "Service Charge Is Taxable" and Service fees will be taxable.
2. Apply order type:
The type of order to which the service fee applies, for example, a service fee is charged for orders with on-site service, such as dine-in orders; no service fee is charged for online orders, such as takeout or delivery orders.
You can follow the steps below:
- Log in to the Back Office with your OrderPin POS System credentials.
- From the home page, select Settings > Payment & Fee > Fee Settings > Service fee.
- Define the service fee rules.
- Click "Save".
Important notes about the service fee
If you use service fees in your business, please be aware of the following:
- Merchants are responsible for complying with all laws and regulations regarding charging service fees to customers. We encourage you to consult with legal counsel to ensure that you comply with the rules wherever your business is located.
- Even if local laws, regulations, and applicable credit card network rules permit you to charge a service fee, the fee should be reasonable and not excessive.
- When deciding on the price of your products and services, consider all operating costs and ensure that you have a sustainable profit margin.