California State law requires auto gratuity fees to be taxed. This document will show you how to set up taxed auto gratuity in OrderPort Admin.
Table of Contents
Disable Standard Auto Gratuity
To use taxed auto gratuity, you must first disable the auto gratuity function in the Point of Sale module. This will ensure you don't double up on the auto gratuity fee.
Standard Auto Gratuity can be disabled from OrderPort Admin -> Services -> Point of Sale -> Tip Presets.
Take a screenshot or write down the current auto gratuity rules prior to deleting them. This will allow you to recreate them in the Fees in the Payment Processing module.
Enable Taxed Auto Gratuity
Taxed auto gratuity is configured from OrderPort Admin -> Settings -> Payment Processing -> Fees.
Click Add Fee.
When configuring the fee, ensure the following:
1. The rule is enabled.
2. The rate is set to the first guest range for auto gratuity.
3. The type is set to Auto Gratuity.
4. The fee is set as taxable.
5. The State is set to California.
6. Add an auto gratuity rule with the appropriate guest range. The first rule will use the rate configured in step 2.
7. You may add more rules for higher guest ranges if you would like. You will need to add all rules past the first one.
If your business has tasting rooms outside California, you should recreate the rule from the Fees tab with two differences:
1. Set the fee as not taxable.
2. Select the state(s) outside of California where you have tasting rooms.
Reporting for the Auto Gratuity
Since taxable auto gratuity is set up outside of the Tips Presets tab of the Point of Sale module, you may need to adjust your reporting practices accordingly. OrderPort provides a pre-built report template in OrderPort Admin -> Operations -> Reports -> My Reports -> Compliance Reports.
The report is called "California Taxable Gratuity / Service Charge".
Before you run the report, you need to make one change to the template. Expand the Report parameters, then under the Products section, search for your auto gratuity rule(s). Once you do this, the report is ready to go. Be sure to re-save the report as a template, that way you don't have to configure the report each time you want to run it.
Here is an example of what the report would look like. The two columns in the Ordered Products section displays the total fee taken per cashier, as well as the sales tax taken on the fee.
