Compliance
What Is a Tip Function in EFTPOS?
Enabling tipping in EFTPOS terminals, how it works for drivers
Intro
The tip function enables passengers to add a gratuity when paying with a card through an EFTPOS terminal. It provides an easy and transparent way for drivers to receive tips, improving earnings and customer satisfaction.
Main Definition
In the context of taxi payments, the tip function is a feature on EFTPOS terminals that prompts customers to leave a tip before completing their payment. This feature can offer preset tip percentages (such as 5%, 10%, or 15%) or allow customers to enter a custom amount. For drivers, this function creates an opportunity to receive additional income directly through the payment process. It simplifies the tipping process, eliminates the need for cash tips, and ensures accurate reporting. Importantly, tips collected via EFTPOS are recorded separately from fares for accounting and tax purposes.
Examples
A passenger takes a taxi and pays the $40 fare via card. The terminal prompts them to add a tip, and they choose to leave 10%, adding $4 to the transaction.
A CabFare terminal allows tipping via fixed options like $2, $5, or a custom amount, making it easy for riders to reward good service.
Some terminals are configured to automatically suggest a tip on the payment screen before final confirmation.
Key Relationships
The tip function is directly related to driver income, customer experience, and transaction processing. It also affects compliance and reporting, as tip amounts must be clearly distinguished from fares and handled in accordance with tax laws. Furthermore, it links with payment gateways and POS systems, which must support split amounts and detailed receipts.
Frequently Asked Questions
1. Are tips through EFTPOS taxed?
Tips are considered income and may need to be declared, depending on local tax regulations. In some cases, they are treated separately from regular earnings.
2. Can the tip function be disabled?
Yes, merchants or fleet managers can configure their terminals to enable or disable tipping, depending on business preferences or regional laws.
3. Do drivers receive the tip immediately?
Tips are usually included in the same payout cycle as fare payments, but this can vary by payment provider or terminal configuration.
