How does surcharging work with tips?

Published 10/25/2019

We often get asked if it is possible to set up credit card surcharging in a restaurant.  The answer is yes!  Below you will find a breakdown of how the cardholder and the business owner get charged to run the transaction:

The 4% is charged to the bill amount, not the total sale with tip amount.  Here is an example on a $100 sale.

This means the $100 sale will be charged $104 to the cardholder. If they add the $20 tip the total charge to the cardholder is now $124.

Because the 4% surcharge for the tip is not taken from the cardholder the merchant covers it which means the deposit they receive will be the $120 minus the 4% charge on the $20 tip ($0.80 fee). The merchant will receive $119.20.


               $100      bill

               +$    4      surcharge cardholder pays

                $104      bill + surcharge

               +$  20      tip entry  

                $124      bill + surcharge + tip



               $20..     tip amount

               -$0.77   surcharge merchant pays 3.846% surcharge

               $19.23     remaining after surcharge on tip amount



                $124      total charge to cardholder

                -$4      surcharge drawn back for fees

                -$0.77     surcharge drawn back on tip amount

               $119.23 deposited to merchant bank account

As you can see the business owner pays a small percentage on the tip amount only - while still saving a ton of money on the total transaction!

Call Now: (877)-986-4445