What are service charges in Micros Simphony, and how do we configure them?
Service Charges are additional $ amounts added to a customer’s check for providing a service.
Is a service charge the same as a tip?
The short answer is no. A tip is a type of service charge that is given to an employee of the restaurant for good service. There are several other kinds of Service Charges besides Tips, so let’s discuss them in more detail.
Service charges can be posted in two ways:
- To the Restaurant
- To the employee
In Micros Simphony (1), we can configure multiple types of service charges:
- House Service Charges: corkage fees, delivery fees
- Non-revenue Service Charges: Deposits for events or catering
- Gift Certificates Sold: Gift Cards sold but not yet redeemed
- Tips to employees: Extra money given for good service
- Service Charges to employees: Bartender fee (set amount for bartending a special event, paid by the customer)
Programming service charges in Simphony can be done in two ways:
- Automatic – Auto 18% Gratuity, Cover Charges (6 or more)
- Manually – Added by pushing a button on the workstation when necessary.
Service Charges can get quite complicated, especially when adding special fees or automatic ones when the number of guests exceeds a certain number. If you want to learn how to program them correctly, check out our comprehensive Simphony Training, we have a complete online course and support platform. More details below.
Configuring Service Charges
Service charges can be configured at the enterprise level or property level in Micros Simphony. We can locate them in the configuration tab under the sales area.
In the General tab, we have several fields and option bits available. Let’s take a look at the fields first.
Enter the service charge percentage. This field becomes available only when you deselect option 2 – ON = Amount; OFF = Percentage.
Enter the service charge amount. This field becomes available only when you select option 2 – ON = Amount; OFF = Percentage.
Tips Paid Tender/Media
To link the service charge to a Tips Paid Tender/Media, select the Pickup configured as Tips Paid from the drop-down list.
When a service charge linked to a Tips Paid Tender/Media is added to a check, it automatically posts to Tips Paid.
To link a pickup tender to the service charge, select the Tender/Media from the drop-down list.
Only the tenders that have 3 – Pickup set in the Key Type field of the Tender/Media module appear.
Enter the High Amount Lock Out (HALO) value for the service charge. This setting limits the amount workstation operators can enter for the service charge.
When you set the value to 0, there is no HALO for the service charge.
This field does not apply to automatic service charges.
Select the Print Class for the service charge.
To apply a tax class to the service charge, select a Tax Class from the drop-down list.
Select a Privilege Group to restrict use of this service charge to employees who are linked to the same privilege group. You can set the field to “0″ to allow all employees to use the service charge.
Percent to Tips Paid
Enter the percentage of a charged tip that posts to the Tips Paid Tender/Media.
Select the report group to which this service charge record belongs.
Report groups are subcategories that allow reports to show similar service charges grouped and subtotaled together. You can configure report groups from the Report Groups module, in the Reporting section of the Property tab.
Next, let’s explore all the different Option Bits
1 – ON = Open; OFF = Preset
Select this option to make the service charge an open service charge, prompting the workstation operator for the amount or percentage. Deselect this option to use a preset amount or preset percentage for the service charge.
2 – ON = Amount; OFF = Percentage
Select this option to make the service charge an amount service charge. Deselect this option to make the service charge a percentage service charge.
3 – Post to Charged Tips Total on Tip Reports
Select this option to post the service charge to the Direct Charged Tips total. This option records charged tips that employees receive directly from customers. If you select this option, workstation operators who use it must also enter a charge payment using a tender with Tender/Media option Post to Charged Receipts on Tip Reports set.
Select either 3 – Post to Charged Tips Total on Tip Reports or 11 – Do Not Post to Gross Receipts, but not both.
Select either 3 – Post to Charged Tips Total on Tip Reports or 4 – Post to Service Charges Total on Tip Reports, but not both.
4 – Post to Service Charges Total on Tip Reports
Select this option to post the service charge to the Service Charges total, but not the Total Tips or the Gross F&B Receipts total. Deselect this option to post the service charge to the Gross Food and Beverage Receipts, but not to the Service Charges total. The Service Charges total on tip reports meets the reporting requirements of United States IRS Form 8027, which states that this total should equal all tips that are paid to the employee as wages, and are less than 10% of the transaction total.
5 – Reference Entry Required
Select this option to require the workstation operator to enter an alphanumeric reference entry when using the service charge.
6 – Validation Required
Select this option to print a validation chit when the workstation operator uses the service charge.
7 – Non-Revenue Service Charge (No Post to Sales)
Select this option to create a service charge that does not post to Simphony sales totals (for example, cash back through the SPI). (A tracking group total can track this amount if necessary.)
This option is used to create a service charge for gift card/certificate sales as the customer can pay for the gift certificate with a credit card. If you are using gift cards through the SPI, you need to create non-revenue service charges for:
When you select this option, you must configure the service charge as an amount service charge. A non-revenue service charge cannot post to a check that contains menu items. If a cashier link is required for tendering, a cashier link is also required for posting a non-revenue service charge. When using this option, deselect options 3 and 4.
8 – Taiwanese Paid Out
Select this option to create a service charge that is used to record the repayment of cash from a Taiwanese paid out.
9 – Reset Itemizer(s)
Select this option to reset service charge itemizers. When set, service charges can only apply once to menu items that post to the same service charge itemizers. Deselecting this option allows multiple service charges to apply to the same service charge itemizers.
10 – Service Charge Adds to Guest Count
Select this option to increment the transaction’s guest count by one every time the service charge applies to the transaction. This option is often used for non-revenue service charges that apply as cover charges. Selecting the RVC Parameter option 8 – Use Number of Seats for Guest Count overrides the setting of this option. When the workstation operator presses the Number of Guests key during a transaction, the guest count no longer increments when the service charge applies to the transaction. The workstation operator must maintain the guest count manually from that point.
11 – Do Not Post to Gross Receipts
Select this option to prevent checks with this service charge from posting to gross F&B receipts on tip reports. This is intended for service charges that meet the United States Internal Revenue Service’s definition of non-allocable receipts (as defined in the IRS Instructions for Form 8027). Deselecting this option allows the service charge to post to gross F&B receipts on the tip reports.
Select either 3 – Post to Charged Tips Total on Tip Reports or 11 – Do Not Post to Gross Receipts, but not both.
12 – Item is Shareable
Select this option to share the item between two or more seats or two or more checks when using TouchEdit or TouchSplit.
13 – Cash Tips
Select this option to add the Direct Cash Tips total on the tip reports. Selecting option 3 – Post to Charged Tips Total on Tip Reports or 4 – Post to Service Charges Total on Tip Reports overrides this option. This option is used in a cashier environment where the guest leaves the table and pays the check directly with a cashier. When paying the bill, the guest indicates to the cashier to give the change to the server. After receiving payment, the cashier can post a value to a Cash Tip Service Charge. This Cash Tip Service Charge posts to the employee’s Direct Cash Tips total on the Employee Tip Report.
14 – Service Charge Used For Stored Value Transactions
Select this option if the service charge is used for stored value transactions.
17 – Use Floor Amount (Automatic Service Charges Only)
Select this option to require a minimum value for the automatic service charge. Then enter the minimum floor amount in the Amount field, which is only active for percentage service charges when you select option 17. This option only applies to the service charge in revenue centers where it is used as an automatic service charge.
18 – Gift Certificate Sold
Select this option to create a service charge that can be paid without posting to sales totals. (A tracking group total can track the amount if necessary.) This option is similar to 7 – Non-Revenue Service Charge, except that menu items can be present on the check in addition to the service charge. When you select this option, you must configure the service charge as an amount. If a tender requires a cashier link, posting a non-revenue service charge also requires a cashier link. Selecting this option dims option 7.
22 – Add to Checks Begun/Paid Count if Non-Revenue
This option applies to the service charge if it is configured as non-revenue (option 7 is set). Selecting this option increases the checks begun or paid count on reports when the non-revenue service charge applies to a transaction. Deselecting this option results in no change to the checks begun or paid count.
23 – Rental Deposit
Select this option to use the service charge as a rental deposit. Rental deposits work with the deposit handling feature and are necessary to apply a deposit to a check. Service charges with this option set may be non-revenue service charges. However, unlike traditional non-revenue service charges, a check may contain more than one rental deposit service charge.
26 – Configure as Banquet Tip
Select this option to include the amount of the service charge transaction in the Tip Summary Total of the banquet check.
27 – Configure as Banquet Fee
Select this option to include the amount of the service charge transaction in the Fees Summary Total based upon the selected service charge on the banquet check.
28 – Cash Management Transaction Item
Select this option to include the service charge in Cash Management tracking and reporting.
30 – Prorate Service Charges to Menu Items
Select this option to prorate the service charge based on the value of the menu items. This overrides the requirement for the minimum guest count for a memo check, if the minimum guest count requirement is met for the entire check.
We can use the itemizers tab to allow or not allow certain Service Charges to apply to menu items.
I have only two options here:
- add service charges
- no service charges
All my service charges are part of the first option.
For regular menu items, I select the “add service charges” option so that gratuities and tips can be applied.
Some examples of items that should not allow service charges are: retail items, deposits, and fees. (if set as menu items)
Menu Levels Tab
Service charges should be configured to apply on all main levels and sub-levels unless you need to configure some special programming.
We can use the Numeric Look Up (NLU) to quickly find a specific service charge when we have many of them programmed in the system. This is not very common.
For service charges, we usually use an SLU or hard-code them to the screen. I prefer to add my Service Charge SLU somewhere on the payment screen and populate all my manual service charges there. Automatic Service Charges don’t need to be assigned to the screen.
We can use the Output tab to print service charges on Customer Receipts, Guest Checks, and the journal.
We can even have them print on the Order Devices if needed.
Finally, we have the Effectivity Group, where we can assign the Service Charges to be part of a group for advanced programming.
Open $ and % Service Charges
Now that we have a better understanding of all the different options available for service charges, let’s take a look at how we can program a few of them.
We can start with a general Open $ service charge that every restaurant should have. This can be used by a manager for any unforeseen scenarios.
The General Tab is where the majority of the programming is done. The percent and amount fields should be left at zero since this is going to be an “open service charge,” and the employee will enter the amount every time.
Everything else should be undefined except for the reporting group, it should report under the service charge group.
For option bits, I have selected: 1,2,5, and 12.
For the Open % Service Charge, everything is the same, just de-select option bit #2.
Gratuity - Open Amount
This is the main Gratuity we use for extra tips on Credit Cards, Room Charges and Gift Cards. We can also use this to manually add a gratuity to the check when necessary.
In the general tab, the percent and amount will be left at zero, but we will define the Tips Paid Tender Media and Percent to Tips Paid and link them accordingly.
For the option bits, I selected 1,2,3, and 12.
We can also define an Open % Gratuity to have available by de-selecting option #2. This can be used when an employee needs to add a custom gratuity to the check.
Preset Gratuity - 18%, 20%, 24%
These are automatic Gratuities that we use for restaurants. We have several for different scenarios.
- 18% applied to every check, house rule
- 20% for parties of 10 or more
- 24% for In Room Dining
These are defined exactly the same, the only difference is the name and percent field.
In the general tab, we enter the percent as 18,20 or 24, and the amount field will be disabled. We link the Tips Paid and Percent to Tips paid, just as we did in the open $ Gratuity, this is used as a tip to the servers and bartenders, so 100% of the amount is reported to Tips Paid.
For option Bits, I only selected #12.
Gift Card Issue and Reload
Both the Gift Card Activate and Reload are programmed the same, we have them separately for reporting purposes only.
We use this type of Service Charge to issue and reload Gift Cards for customers. This type of service charge is non-revenue, meaning we don’t consider them as sales (or income) until the guest actually redeems the amounts. We achieve this by using option #7 or option bit #18, but not both at the same time. The difference between them is that option bit #7 will not allow menu items to be present on the check.
The Percent and amount fields will be zero since this is an open service charge, and we only need to link the report group.
For the option bits, I selected: 1, 11, 12, 14, 18, and 28.
Deposit Service Charge
We use this type of service charge to take deposits for catering events, rentals, or large orders such as custom cakes. These are also non-revenue, so they will not count toward sales because they either get returned to the customer (in the case of rentals) or we report the sale when they pay for the catering event or food order.
For the General Settings, I only set Reporting Groups, leaving everything else to default.
For option bits, I selected: 1,5,7, and 12.
If you use this as a rental deposit and need to add several service charges to the same check (3 x kayak rentals), also select option bit #23.
Other Service Charge Settings
We use the Tender Parameters to define Automatic Service Charges and Cover Charges.
Automatic Service Charges are pre-set percent charges defined in the system. Examples: 18% Gratuity, 24% Gratuity.
Cover Charges are pre-set amount charges that apply for each gust present on the table. These service charges also need to have Option Bit #7 – Non-Revenue Service Charge (No Post to Sales) and #10 – Service Charge Adds to Guest Count.
If you need to have different Automatic Service Charges for different Revenu centers, such as 18% for the restaurant and bar and 24% for In Room Dining, you can create Overrides to the Tender Parameters module at the Revenue Center Level and set each Automatic Service Charge accordingly.
If your Automatic Gratuity applies to all checks, set the Number of Guests before Auto Gratuity to zero.
But, if you apply the auto gratuity after a certain number of guests (tables of 6 or more), then you can enter the number here, and you will also have to select the option bit “#10 – Auto Service Charge Defaults to Off” in the general tab.
In order to remove a manual Service Charge, you can just Void it from the check, like any other menu item.
In order to remove an Automatic Service Charge, we need to add a special button in Page Design: Function -> Exempt Automatic Service Charge.
The best way to add your service changes to the Screen is using a Screen Loop Up (SLU). In the Payment section, I added a service charges side tab and inserted an SLU. I linked it to SVC SLU 1, and all my Service Charges Will appear here.
You can also choose to hardcode the service charge to an individual button if they are used very often and add them to a bottom or sidebar.
One item that needs to be hardcoded is the Exempt Auto Service Charge Button, which is necessary when you use automatic service charges.
Service Charges can get quite difficult to program. Luckily for you, we have a fantastic Facebook community of like-minded individuals that can answer all your questions! Join for free below!
Now it's your turn!
I hope you enjoyed my guide on Service Charges and that you found it helpful.
- Do you have any questions regarding Service Charges?
- Do you use Automatic Gratuities in your Restaurant?
- Let me know in the comments below!