This content is provided for informational purposes only and is not intended as legal, accounting, tax, HR, or other professional advice. You are responsible for your own compliance with laws and regulations, including card network rules. You should contact your attorney or other relevant advisors for advice specific to your circumstances. Note that this article applies to U.S. and U.S. territories only. The development, release and timing of any products, features or functionality remain at the sole discretion of Toast, and are subject to change.

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Surcharging Compliance

What is a credit card surcharge?

Credit card surcharging is when merchants charge guests a fee for credit card acceptance, typically as a means to recoup some of the merchant’s processing costs.

Why can’t I surcharge on debit/prepaid cards?

Surcharging on debit and prepaid cards is prohibited by the card brands (e.g., Visa and Mastercard) for all U.S. merchants. You cannot add a credit card surcharge to a debit or prepaid card. There are no exceptions to this rule.

Toast Credit Card Surcharging is designed to automatically distinguish between credit and debit/prepaid cards, helping ensure that a surcharge is added only when a guest uses a credit card. Learn more: .

Why can’t I assess a surcharge or additional fee that applies to all cards (credit and debit/prepaid), but not other payment methods?

A credit card surcharge that applies to both credit cards and debit/prepaid cards - but not all other types of payment methods (e.g., cash and gift cards) - is prohibited by the card brands because you would be adding a fee to debit/prepaid cards. Surcharging on debit and prepaid cards is prohibited for all U.S. merchants. Learn more: .

Can I run debit and prepaid cards as “credit” (without a PIN) so that I can surcharge?

Running debit and prepaid cards as “credit”, whether with a PIN or not, does not change the fact that these cards are debit and prepaid cards. That means the surcharge is still non-compliant. Surcharging on debit and prepaid cards is prohibited for all U.S. merchants, regardless of how they are processed.

Toast Credit Card Surcharging is designed automatically to distinguish between credit and debit/prepaid cards and will automatically add a surcharge only when a credit card is detected, even when a debit card is run as “credit." Learn more: .

Is credit card surcharging legal in every U.S. state?

No. Merchants in states where surcharging is prohibited — including Connecticut, Maine, and Massachusetts — are not eligible for Toast’s Credit Card Surcharging solution.

Note: As of November 1, 2025, Oklahoma has removed its prohibition on credit card surcharging, so Toast customers located in the state can start signing up now to use Toast’s Credit Card Surcharging solution. Please note that credit card surcharges are capped at 2% in Oklahoma. Learn more .

Important: Some states may have other laws that impose additional disclosure requirements, such as by requiring that all mandatory fees be included in the advertised price. To get compliance guidance specific to your state, first check to see if your local regulator has issued any guidance on credit card or other surcharges. For example, as of October 1, 2025, California’s attorney general has issued guidance addressing mandatory fees and credit card surcharges , and Minnesota , explaining why a credit card surcharge might not be considered a “mandatory” fee in those states. Then, if you wish to better understand how your state’s specific requirements and guidance apply to your business, consider consulting a lawyer or other qualified professional.

Is credit card surcharging legal in the state of New York?

As always, you are responsible for determining whether your business practices are permitted under the law of your state. To get the best answer, contact your lawyer or other qualified professional. We understand credit card surcharging to be legal in New York as long as businesses include the amount of the credit card surcharge in their listed/advertised prices for each item. Please note that Toast Credit Card Surcharging is available only on POS/Handheld, including manually keyed transactions, for New York locations. For more information on surcharging in New York, see our article about .

What are the risks of non-compliance with card brand rules?

As of April 15, 2023, Visa’s surcharging rules changed and the fines for non-compliance increased significantly. The card brands (e.g., Visa, Mastercard) can impose fines of up to tens of thousands of dollars for non-compliance with their rules regarding surcharging. They can even prevent you from accepting their brand’s cards entirely as a payment method. Learn more here: .

Who is responsible for fines or other penalties if I am found non-compliant?

You are responsible for any fines or penalties that you receive as a result of non-compliant surcharging or any other non-compliant practices. It is important to know the card brand rules, as well as your state and local laws, to ensure that you stay protected from any fines or penalties.

Where can I learn more about the card brands’ surcharging rules?

You can refer to and (external links).

Why can’t I use "Service Charges" feature to apply a credit card surcharge?

You will receive an error message when creating a service charge that is related to credit card surcharging. The “Service Charges” feature is intended to enable customers to add fees unrelated to the payment method used by a guest, and therefore apply to all payment methods equally.

Toast’s “” feature is not intended for surcharging as service charges cannot automatically be applied exclusively to credit card transactions. Incorrectly surcharging can lead to costly fines if noncompliant with card brand rules.

Visa actively enforces their rules through in-person audits (mystery shoppers) and cardholder complaints submitted here. Other card brands are starting to follow suit. Violations start at $1,000 and will increase for repeated violations.

Can I use Toast’s “Service Charges” feature to apply a fee to ALL payment methods, including credit cards, debit cards, cash, and gift cards?

Yes. You may implement a guest fee using the service charges feature as long as it is applied equally to all payment methods and not removed for any given payment method. For example, you cannot implement a fee and remove it if a guest pays with cash, because that is the equivalent of a non-compliant surcharge since it is being applied to debit cards. Surcharging on debit and prepaid cards is prohibited for all U.S. merchants. If you do choose to implement a compliant service charge, please review the important requirements here: .

You may choose to use Toast’s Credit Card Surcharging product and apply service charges at the same time. Credit Card Surcharging helps you offset your credit card processing costs, while service charges are related to operational costs other than the cost of accepting payment cards, or for other reasons not specific to the payment method used.

Please note, however, that some jurisdictions may have additional requirements, such as requiring that any extra fees are included in advertised menu prices. If your local laws, regulations, or applicable card network rules have additional requirements that prevent your use of Toast’s existing service charge functionality, please remember to keep all of your operational costs in mind when implementing pricing to help promote sustainable margins. If you are unsure about the local laws, regulations, or applicable card network rules applicable to you, please consult an attorney or other professional for advice based on your unique circumstances.

Why is the surcharge amount lower than anticipated?

Surcharge amounts may appear lower due to being calculated only on pre-tax, pre-tip amounts, and exclusions for certain card types like debit cards.

Toast Credit Card Surcharging

Who is NOT eligible for Toast Credit Card Surcharging?

Merchants in states where surcharging is prohibited — including Connecticut, Maine, and Massachusetts — are not eligible for Toast’s Credit Card Surcharging solution.

Merchants based outside of the U.S. (including those in U.S. Territories) are not eligible for Toast Credit Card Surcharging.

Merchants that have a direct Card Acceptance Agreement with American Express are not eligible for Toast’s Credit Card Surcharging functionality. These agreements include provisions governing the merchant’s surcharging of American Express cards.

Certain merchants that participate in American Express’ OptBlue program are not eligible for Toast’s Credit Card surcharging functionality.

How long will it take from when I sign up until I can begin surcharging?

If you are a new Toast customer eligible for Credit Card Surcharging and you indicated an interest in surcharging during the initial sales process, you must wait at least 30 days after you are onboarded to Toast Web to begin surcharging. Please note that you need to sign up for surcharging and configure your surcharge settings in Toast Web in order for surcharging to begin.

For other eligible Toast customers, it can take anywhere from 30-60 days to begin surcharging after signing up for Credit Card Surcharging. Please note that — in these cases — surcharging can only begin on the 1st of a month (after 30 days has passed) for consistent reporting and reconciliations. For example, if you sign up on April 15, then surcharging will begin on June 1.

To see how soon you can begin surcharging after signing up, navigate to Payments > Credit Card Surcharging in Toast Web. Near the top of the screen, you will be shown the earliest date that you can start to surcharge your guests. After you complete the sign-up process, Toast will automatically enable your credit card surcharge on that date at 5:00 a.m. local time.

Why do I need to wait to begin surcharging after I sign up?

Card brand rules dictate that a merchant must wait a minimum of 30 days before you can begin surcharging. Learn more: .

Will I be notified when surcharging takes effect?

Yes, Toast will send you an email 3 days prior to your surcharge start date to remind you that your credit card surcharge will begin shortly and to post your signage for guests.

Can I delay my surcharging start date?

While you cannot delay the surcharging start date once you have signed up for Credit Card Surcharging, you can disable your surcharge by toggling Surcharging Off on the Credit Card Surcharging page in Toast Web on your surcharging start date (or any time thereafter). Make sure to Save and Publish the change.

How do I disable surcharging?

You may disable your surcharge at any time after the surcharge becomes effective by toggling Surcharging Off on the Credit Card Surcharging page in Toast Web, and saving and publishing the change. Toggling Surcharging Off will prevent your surcharge from being applied to guest orders, but will not change your card processing rates.

I am a multi-unit operator with locations in both eligible and ineligible states. Can I surcharge?

Toast Credit Card Surcharging is available on a location-by-location basis, so any locations that are eligible are permitted to surcharge. Locations in ineligible states will not be allowed to surcharge despite their parent/sibling locations existing in eligible states. See below for more information on eligibility.

What surcharging rate can I charge?

Most customers may surcharge up to 3%, which is the maximum set by the card brands. If you see a note under the “Surcharge rate” field on the Credit Card Surcharging page that reads “Max. set by card brands: 3%”, then you may set your surcharge rate up to 3%. Please note that customers based in Oklahoma will see a note that reads: “Max. set by your state: 2%,” since surcharges are capped at 2% in Oklahoma.

However, some customers may see a note with a “suggested compliant surcharge rate” that is less than the above caps (3% or, in Oklahoma, 2%). Your suggested compliant credit card surcharge rate is an estimate of your credit card processing costs at this location, based on data available to us. The card brands, such as Visa and Mastercard, do not allow merchants to profit from surcharges, so your surcharge rate should not exceed this figure.

You are free to choose a lower percentage should you wish to surcharge less.

What channels are currently available for surcharging?

Check out for a complete list of supported channels and some required steps to surcharge in digital channels.

Will Toast Credit Card Surcharging work with payments made by digital wallets like Google Pay and Apple Pay?

If your guest is using a credit card in their Google Pay or Apple Pay wallet, the credit card surcharge you set up using our surcharging product will be applied automatically to transactions in the supported channels. The surcharge will not apply if your guests use a debit card (or another payment method that is not a credit card) in their digital wallet and will not apply for transactions via unsupported ordering channels.

Can checks that are split and paid with different payment methods be surcharged?

Yes. The portion of the check that is paid with a credit card will be surcharged, and the portion paid with debit card, cash, or gift card will not be surcharged. If the check is split between multiple credit card payments, each guest that pays by credit card will be required to pay the applicable surcharge on their portion of the check. As a reminder, tips and taxes are NOT surcharged.

What options do my guests have to avoid the surcharge?

Guests can always avoid the surcharge by paying with cash, debit/prepaid card or any payment method other than a credit card. This will be stated on the signage you post physically in the restaurant as well as on guest-facing displays, pre-payment bills (checks) and in digital environments (if applicable).

Do guests need to pay sales tax on credit card surcharges?

Generally, credit card surcharges are subject to sales tax. However, credit card surcharges are not subject to sales tax in Colorado for merchants located in that state, so long as they are otherwise compliant. You may use this information to determine whether a credit card surcharge is subject to sales tax in the state where your restaurant is located. However, this information does not constitute the provision of tax advice by Toast and you should consult a tax advisor if you have specific questions regarding the imposition of sales tax on a credit card surcharge.

Can I apply a credit card surcharge to custom tips added by guests for servers?

Surcharge amounts are not calculated on custom tips added by guests. Credit Card Surcharging calculates the surcharge amounts pre-tax and pre-tip. The only fees that can be surcharged are pre-configured gratuity & non-gratuity service charges, but NOT custom tips.

Can I manually remove a surcharge for select transactions?

No. To ensure compliance, it is not possible to manually remove the credit card surcharge for select transactions.

Do I need to disclose the credit card surcharge to my guests?

Yes. According to card brand rules, clear and conspicuous signage must be posted at the point of entry (e.g., the outside face of the restaurant, entryway, etc.) as well as at the point of sale or point of interaction (e.g., next to the cash register, etc.). The signage must include a statement that the surcharge only applies to credit cards, along with the specific credit card surcharge rate, does not exceed your cost of acceptance, and must not suggest that the fee is being charged by Toast, a card brand, or other third party.

Toast provides compliant signage you may use for this purpose, but it remains your responsibility to ensure they are posted in the proper areas and in compliance with applicable law and card brand rules. Be sure to check whether your local jurisdiction imposes any additional disclosure requirements.

You are not required to use the signage templates required by Toast. You may choose to create your own signs and disclosures in accordance with card brand rules. However, you remain responsible for posting signage in accordance with applicable laws and rules, and making any changes necessary to comply.

We recommend you also disclose any credit card surcharge on your menus, in your seating areas and any other locations on your premises as necessary to inform guests, or as required by applicable laws in your jurisdiction.

If you accept orders through Toast Online Ordering or Local by Toast, in addition to posting physical signage in your restaurant, you should add the surcharging disclosure to your website and any menus posted online. Please note that if you reference any specific card brands on your website or any menus posted online, you must include the surcharging disclosure to comply with card brand rules.

Do I need to use the Toast-provided signage and disclosures when using Toast Credit Card Surcharging? Can I create my own signage?

You are free to design your own signage and disclosures. The templates provided by Toast are examples intended to comply with card brand rules. You may choose to create your own signs and disclosures, and you are responsible for posting signage in accordance with applicable law and all card brand rules. We encourage you to use the same language in the signage and disclosures we provided to you, but it is not required. Please note also that some jurisdictions impose unique disclosure requirements –– be sure to check local legal requirements and make any necessary changes to your disclosures.

Language on Toast's guest-facing displays is not customizable.

Learn more about signage and disclosure requirements .

Why do I need to post signage when I apply Credit Card Surcharging?

It is required by the card brands. For example, under , you must “clearly alert consumers to the practice at the point of entry, the point of sale or transaction, and on every receipt.”

This also helps give your guests a better experience and allows them to pay by other means, if they choose to do so. You can take a look at for more information on surcharging rules.

Do my staff need to perform any specific actions when working with our guests, related to Credit Card Surcharging?

We recommend that you train your staff to explain to guests that your restaurant’s credit card surcharge helps your business offset processing costs and is not more than what you currently pay in fees. Your staff should also inform guests that the surcharge does not apply to debit/prepaid cards, cash, and gift cards. We also recommend training your staff to tell guests before they pay that credit card payments will be surcharged in case they miss the disclosures.

For phone orders, you or your staff must make the disclosure verbally when taking the order, before the transaction is complete, to inform your guests. Guests must be given the opportunity to opt out of their order or pay by other means (such as cash or debit card) before the surcharge is applied to their ticket.

Is my surcharge compliant?

Our product helps you comply with card brand requirements. You remain responsible for compliance with physical disclosures and other legal requirements that may apply in your state.

How do refunds and chargebacks work for surcharges?

Toast’s Credit Card Surcharging product automatically refunds or credits back the surcharge amount to your guests. If it is a partial refund or chargeback, Toast’s Credit Card Surcharging product will automatically prorate the surcharge amount that is refunded or credited back to your guest.

Note: You are not able to manually remove surcharges from being refunded or credited back due to card brand compliance rules. Surcharges are required to be refunded or credited back to guests for both refunds and chargebacks.

Where can I see my surcharges in my reports?

Your total number and amount of credit card surcharges will appear in your reports as follows:

Sales Summary Report
- A separate line item “Credit Card Surcharges” under the “Service Charge Summary” section. The total number and total amount of surcharges also is counted among your “Non-Grat Svc Charges” totals under the “Sales Category Summary” section. Although your credit card surcharge totals are reflected in both places, your surcharge revenue is not counted twice for purposes of revenue reporting.
- “Non-Grat Svc Charges” includes both the total number of credit card surcharges you have configured, and the total number of any other service charges that are not configured as gratuities, such as a large dining party fee or bottle service charge.
Order Details
- If a credit card surcharge was applied to an order, it will show up on the order details for that specific check.

Note: The credit card surcharging amount is included in your net sales.

I am unable to see the surcharging settings in Toast Web; I receive a 404 error.

Surcharging functionality is restricted only to customers with both financial accounts and payments setup permissions in Toast Web. If you are receiving this 404 screen, you do not have the proper permissions and need to consult your financial manager. Learn more .

Why am I still paying credit card processing fees on my monthly statement? I am using the new Credit Card Surcharging product.

Toast's Credit Card Surcharging product can be used to help offset your credit card processing costs, allowing you to generate incremental revenue on credit card transactions by charging your guests an additional fee. Surcharges that you collect are not deducted from your processing fees, but instead, result in an increase to your sales volume to offset your processing costs.

Using Toast's Credit Card Surcharging product does not mean that you will no longer pay credit card processing fees. You are still responsible for paying your full, contractual processing rate on the gross amount on all card transactions you process, including both credit and debit cards.

Credit card surcharges are NOT applied to custom guest tips or taxes. Surcharges are also applied to other service charges configured by the restaurant including automatic/mandatory gratuity; processing fees also apply to surcharge volume.

Since you are not permitted to surcharge debit/prepaid cards under card brand rules, you will not be able to offset your card processing costs entirely. In other words, the amount you collect in credit card surcharges will not exactly match the amount you pay in processing fees. Consider too that your fees for card-not-present transactions will also not be covered entirely by credit card surcharges.

Can customers outside the U.S. sign up for Toast Credit Card Surcharging?

No, Toast Credit Card Surcharging is not offered outside of the U.S.

Credit Card Surcharging FAQ