Tips, or gratuities, allow customers to show their appreciation by leaving a little extra money for your staff. Managing tips properly helps keep reporting accurate for staff and business records. This guide explains how to add, declare, and track tips in Lightspeed Restaurant, as well as change tip settings if needed.

Speak with a tax professional to ensure you follow the correct rules for declaring, distributing, and reporting tips in your region. Laws are different in every area and can change over time.

Enabling tips

For most Lightspeed restaurants, tipping is automatically enabled when completing your initial account setup. If it wasn't, or you want to disable tipping, do so from the Back Office. There are two methods of enabling or disabling tips:

• Update your POS configuration, covered in the following steps, to enable or disable tipping for all POS devices linked to that configuration.
• Alternatively, you can enable tipping for specific payment methods if you first disable it on the POS configuration.

1. Log in to the Back Office with your Lightspeed credentials.
2. From the navigation menu, go to Configuration > Configurations.
3. Click the name of a POS configuration to edit it.

   

4. Within Payments, toggle the Allow tipping at payment setting to enable or disable tipping.

   This change will affect all POS devices that are linked to the configuration you are editing.

   

5. Configure your tip settings, including in other areas of the Back Office, as desired for your account.
6. Click Save to finish, then reload your POS devices for changes to take effect.

Adding and adjusting tips

The process for adding a tip to an order is different when a customer pays in credit versus cash. Depending on your settings, you may also be able to modify the tip on a closed order or add one automatically using an order profile. 

Tips are attributed to the employee who started the order, not necessarily who processes the payment.

Credit payment

When paying by credit card, a customer's tipping experience depends on the Lightspeed Payments hardware and tip settings you use. There are different steps for tipping on the payment terminal itself, on the POS, on a signed receipt, or in cash.

To learn more about each method, click to expand the following toggles.

• Tip on payment terminal or POS device

  For payment terminals with a screen, such as the Smart Terminal, customers can tip on the terminal itself. For terminals without a screen, like the Mobile Tap, customers can select a tip on your iPad or iPhone.

  You must enable these tipping methods in the tip settings for your POS configuration.

  1. Open an order on the Register screen and tap Pay.
  2. Tap the appropriate Lightspeed Payments payment type and then Pay.
  3. Select or enter a tip on the payment terminal or POS device, or tap Skip.

     The suggested percentages or amounts can be customized in your tip settings.

     

     

  4. Tap, insert, or swipe a credit card or supported contactless payment method. Finish processing the transaction as usual. 

• Tip on receipt

  When customers sign and tip on paper receipts, enter the tip from the receipt after you have pre-authorized their payment.  

  Tipping on receipt requires the 'Pre-authorized or batch' capture method in your Lightspeed Payments settings (AU, UK, and US only).

  1. Open an order on the Register screen and tap Pay.
  2. Choose the appropriate Lightspeed Payments payment type and then Pay.
  3. Tap, insert, or swipe a credit card or supported contactless payment method.
  4. Finish processing the transaction to pre-authorize the customer's card for the order total.
  5. The customer signs and leaves a tip on the payment receipt.
  6. Add the tip after payment to the transaction.

     Important: Tips must be added before the following morning when the payment is automatically captured.

     

• Tip on bar tab

  When customers open a bar tab, you can automatically pre-authorize their card for a set amount. Closing the bar tab allows you to settle the customer's order and add a tip to their final charge.

  Enabling bar tabs requires the 'Pre-authorized or batch' capture method in your Lightspeed Payments settings (AU, UK, and US only). 

  1. Begin the steps to close a bar tab.
  2. On the payment screen, select the pre-authorization payment method. 
  3. Enable the Print receipt option, and tap Complete payment.
  4. The customer signs and leaves a tip on the payment receipt.
  5. Add the tip after payment to the transaction.

     Important: Tips must be added before the following morning when the payment is automatically captured.

     

• Tip before payment

  If you know a customer's tip before processing their order payment, you can add it directly to the order.

  1. Open an order on the Register screen and tap Pay. 
  2. Choose the appropriate Lightspeed Payments payment type.
  3. Tap Add tip.

     

  4. Enter the tip, then tap Confirm.
  5. Select Pay. 
  6. If prompted, the customer confirms the tip amount on the payment terminal.

     

  7. Tap, insert, or swipe a credit card or supported contactless payment method.
  8. Finish processing the transaction as usual.

• Tip in cash

  If a customer pays with credit and tips in cash, an employee should declare the tip instead of adding it to the order.

Cash payment

When a customer pays in cash, you can calculate a tip based on the amount they give you or enter their tip manually. If you already processed their payment, you'll need to add a tip to the closed order instead.

1. Open an order on the Register screen and tap Pay. 
2. Select Cash on the Payments screen, and enter the Received amount from the customer.

   Note: By default, Lightspeed Restaurant will count the difference between the received amount and the order total as a tip. To give change instead, edit the cash payment method in the Back Office and enable the Calculate change setting.

3. To manually add or edit the tip, tap Add tip and adjust as needed.
4. Finish processing the order as usual.

   

Tipping after payment

When a customer tips after you close their order, such as on a signed credit card receipt, add the tip to the payment you processed. Adjusting a tip is also possible, for example, if a mistake happens.

Tips can only be managed during the same business day as the original order.

To manage credit card tips after payment, enable the Pre-authorized or batch capture method in your Lightspeed Payments settings (AU, UK, and US only). This allows you to pre-authorize a customer's card so that their tip can be entered later before the final amount is captured.

1. In the Restaurant POS app, tap Settings to open the Settings menu.
2. From the Settings menu, select Payments to open the Payments list screen.
3. Tap the field in the Tip column for the payment of the order whose tip you're editing.

   

4. Enter a new Tip amount, or enter the Total amount and watch the tip calculate automatically.
5. Tap Done to confirm the tip. If it seems like too much, an alert will prompt you to verify it again. 

   

Automatic tips

To apply an automatic tip, such as for a large party, you must first set up an order profile with the gratuity percentage. After setting that up, use the following steps to apply the order profile (with gratuity and other settings) to an order at the POS. 

1. Open an order on the Register screen.
2. Tap the order tag to select an order profile.

   

3. Choose the order profile with automatic gratuity to add a tip to the order. If the total changes, the tip will update accordingly.

   

Declaring tips

In some regions, staff must declare tips they take home at the end of their shift for tax and payroll purposes. Declared tips can differ from those recorded in the POS app, such as when employees pool what they earn. After enabling this feature, all POS users in a user group will be asked to declare tips when clocking out.

For more on tip declaration, see our blog post Should I Be Claiming All Of My Tips? Advice for Restaurant Servers.

Enabling tip declaration

Enable the tip declaration setting in the Back Office for specific POS user groups to prompt users in those groups to enter their total tips received when clocking out at the POS.

1. Log in to the Back Office with your Lightspeed credentials.
2. From the navigation menu, go to Configuration > Users > POS user groups.
3. In the Actions column, click the down arrow and select Configure next to a user group.
4. Enable the Servers declare tips when clocking out setting in the Server settings section.
   
   To learn about the other available server settings, see Configuring user group settings.
5. Click Save.
6. (Optional) Repeat steps 1–5 to enable the feature for additional user groups.

   

Declaring tips at the POS

After enabling tip declaration, the Restaurant POS app will prompt employees in relevant POS user groups to declare a tip amount when clocking out. Servers should enter the total tips they took home via all payment methods after paying out tips to other staff, and non-server employees should enter their total tips received. 

1. In the Restaurant POS app, tap Clock in/out on the Home screen.
2. Select your username from those listed under Clock in. Don't see your name? Use the search bar to find it.
3. If prompted, enter your PIN code or place your QR code in front of your device's camera to scan it.
4. If prompted, count and close the cash drawer. 
5. Tap Yes to clock out and end the user shift. 
6. Enter the amount of tips to declare and tap Done, or tap Skip to proceed with zero.

   Important: The declared tip amount should be the total you leave with across all payment methods. Factor in any tips you receive from, or pay out to, other staff.

   
7. If prompted, tap Yes or No to decide whether to print a summary of the user's shift.
8. Report declared tips to the tax authority for your region as required.

Tips can only be declared when clocking out, and declaration amounts cannot be changed later.

Viewing earned and declared tips

Reporting on earned and declared tips is viewed differently depending on your level of access. POS users, like restaurant employees, check their tips directly in the app. Back Office users, such as managers, can access more detailed reports through the Back Office.

Note that an employee's declared tips will differ from their earned amount when they pay out tips to others or receive tips outside the POS app.

POS users

POS users with the appropriate Report access settings can view a User report from the Restaurant POS app with their earned tips and other shift information. After clocking out, these employees are prompted to print a summary that also includes their declared tips.

Report access settings for user groups can be configured as follows:

• Can see their own reports: Employee can view only their own User report.
• Can see manager reports: Employee can view all POS reports for the business.
• Has no access to reports: Employee cannot view any POS reports.

The User report in the POS app

Back Office users

Back Office users with reporting access can view earned and declared tips in several key reports, including:

• Labor Report: Displays employee-specific data, including tips and service charges, alongside everyone's hours worked.
• Business Report: Shows total earned and declared tips for the business, alongside sales, taxes, service charges, and overall financial activity.
• Receipt Report: Used to look up individual orders and to edit or print receipts, including canceled or corrected ones.

The Business Report in the Back Office

Distributing tips

Properly distributing tips to employees is important for meeting legal requirements and ensuring a positive work environment. Clearly defined processes help build trust among staff and customers while staying in compliance.

• Understand the law: Tip-related laws vary by region. Some areas allow deductions for service charges or payment processing fees, while others require employees to receive the full tip amount. Ensure you understand local regulations and the reporting you use for tip payouts.
• Distribute fairly: Whether tips are kept by the employee who earned them or shared through pooling, consistency is key. Distribute tips uniformly to prevent conflicts and ensure compliance with regional laws.
• Communicate a policy: Posting your tip distribution policy in your restaurant or on customer receipts is a good idea and may be required by law in some regions. This transparency helps build trust with both employees and customers.
• Manage the cash drawer: If you pay out tips directly from a cash drawer, record the cash removal in the Restaurant POS app to avoid balance discrepancies.

Some regions, such as the UK, have laws governing the fair handling of tips. If you're unsure about the rules in your area, consult a tax professional. Consider using a third-party service, such as TipJar, to help manage tip distribution and meet legal requirements.

Managing tip settings

Several groups of settings affect how tips function in Lightspeed Restaurant. Adjust them according to your business needs and local laws to ensure proper tip management.

• POS configuration: Enable or disable tipping entirely, control whether tips can be added after payment, and customize other tip settings for all POS devices using a given configuration.
• Lightspeed Payments: These settings, found in several Back Office sections, allow you to configure your capture method, payment terminal, and other options for processing payments and tips through Lightspeed Payments.
• Payment method: Customize settings for specific payment methods, such as whether to calculate tips or change when accepting cash.
• User group: Set access permissions on the POS, including reporting and tip declaration, for all employees in each user group.

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