Configure Cash Rounding During U.S. Penny Phase Out

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 any applicable to cash adjustment practices. You should contact your attorney or other relevant advisors for advice specific to your circumstances. The development, release and timing of any products, features or functionality remain at the sole discretion of Toast, and are subject to change. You are also solely responsible for informing your customers about any cash adjustment or related business practices.

In this Article:

Cash Rounding Overview and Setup
Examples of Cash Rounding on Your Devices
Cash Rounding in Your Reporting
Cash Rounding for Tip Payouts

Cash Rounding Overview and Setup

Cash rounding is a non-taxable service charge adjustment for cash payments only that is used to simplify transaction totals as the U.S. removes the penny from circulation. It is only applied when change is given. When using cash rounding, the total is rounded to the nearest five cent increment if the total amount ends in an amount that does not end in .00 or .05. Cash rounding is applied after taxes and discounts are applied to the check. Guests paying with exact change won’t see any adjustments; their total stays as-is.

Note: To configure cash rounding, you must have the 6.3 Payments Setup permission.

To set up cash rounding in Toast Web, use the left rail to navigate to Finance > Related > Settings > Cash Rounding.

There are three ways to set up cash rounding:

Always round down in the guest’s favor: The total amount is rounded down to the nearest nickel so the guest pays less. For example, if the total due is $3.97, the guest is charged $3.95. The cash rounding service charge adjustment is always negative.
Always round up in the location’s favor: The total amount is rounded up to the nearest nickel so the guest pays more. For example, if the total due $3.97, the guest is charged $4.00. The cash rounding service charge adjustment is always positive.
Round to the nearest nickel: The total amount is always rounded to the nearest nickel and fluctuates based on the total. For example, if the total due is $3.98, the guest is charged $4.00 (positive adjustment), but if the total due is $3.96, the guest is charged $3.95 (negative adjustment). The rounding rules are as follows:
1. .01 and .02 round down to .00
2. .03 and .04 round up to .05
3. .06 and .07 round down to .05
4. .08 and .09 round up to .10

If your restaurants use Multilocation Management (MLM), you can set a default cash rounding setup for your locations using the location picker dropdown menu.

Cash Rounding Overview

Examples of Cash Rounding on Your Devices

Below are examples of cash rounding in action on the POS. In the images below, the balance due is $19.03, and the guest is paying with $20 in cash.

This is the server-facing POS screen detailing the change due using the Always Round Down in the Guest’s Favor option:

This is the guest-facing display screen detailing the change due using the Always Round Down in the Guest’s Favor option:

On your guest-facing screens and Toast Mobile apps/sites, you will also see a disclaimer stating: “If you pay with cash, your total may be rounded per this location’s policy”. You can see examples of this in the images below.

Guest Facing Display

Toast Go Handheld

Kiosk

This disclaimer will also be visible on printed receipts, as seen in the image below.

Pre-payment receipt

If a guest chooses to pay for their bill with cash, they will see a line for cash rounding on their receipt that differs based on the policy you have selected for your restaurant as described in the Cash Rounding Overview and Setup section.

Toast Mobile

When cash rounding is applicable, guests using Toast Mobile will see the following message at checkout: "If you pay with cash, your total may be rounded per this location’s policy."

Cash Rounding in Your Reporting

Where applicable, cash rounding will show as its own line item on reports. You can think of cash rounding as cash drawer adjustments since they don't reflect the value of the services or products you've sold. Cash rounding adjustments aren’t included in your Net Sales or Sales tax reporting since rounding is not considered a sale. Cash rounding adjustments are recorded as cash over/short, which is considered non-taxable income or an expense.

When reviewing your Sales Summary Report, you will see a line for Cash rounding in your Revenue Summary listed with either a positive or negative amount listed depending on the cash rounding selection you made for your business.

Cash Rounding for Tip Payouts

To configure cash rounding in your shift review, navigate to Finance > Related > Settings > Cash Rounding. From here, you can edit an existing rule or select + Add custom cash rounding, where you'll find the toggle to enable or disable the feature.

Once the cash rounding is enabled, choose one of the three rounding rules for your total amounts:

Always down to the nearest $0.05 (FAVORS GUEST)
Always round up to the nearest $.05 (FAVORS BUSINESS)
To the nearest $0.05 (BALANCED)

In your shift review, you will see a line item for Cash Rounding.

This cash rounding calculation is also added to the Reconcile cash & tips step of your employee’s shift reviews.

This can also be found under the SERVER TIPOUTS section of your Z-Report.