Square Payroll has a very simple two-tier pricing package.  The first is comprised of a monthly charge which combines a flat fee of $29 plus an additional $5 per employee or contractor who needs to be paid that month. If a business only works with 1099 contractors, then it’s only $5 per contractor with no added monthly charge. This is an advantage over other payroll software providers which often charge additional fees for various tasks such as number of pay runs per month.

Square’s services include Full Service Payroll, filing Federal/State/Local taxes on the business’ behalf, PTO, Benefits and customer support.  A free trial period is also offered. No annual contract or other kind of long-term commitment is required. Square Payroll also has a special option to track and distribute tips, which is an excellent feature designed for the hospitality industry.

Square Payroll is a cloud-based application service designed primarily for small and medium sized businesses. The services allow owners and managers to make quick work of bookkeeping tasks while ensuring that both employees and tax authorities are paid on time and accurately.

Automatic Payroll and Tax Payments 

Square’s primary function is to automatically make all payments to W-2 employees, 1099 contractors as well as to federal, state and local tax authorities. It also handles the business’ quarterly and annual tax filings. At the end of the year, the system will automatically file and mail the business’ W-2’s and 1099’s.

Automatic payroll allows the system to pull the employee’s time sheet and salary information, determine any overtime or other factors which would impact their pay. From there it calculates the amount due to the employee and tax authorities and carries out the disbursements. The suite accommodates multiple pay rates while allowing workers to receive their funds either through direct deposit or paper check. Employers can easily administer benefits such as 401Ks, health benefits and more. There are also additional options which allow them to get a percentage of their pay immediately thanks to several new features.   There are no additional charges for the number of pay runs per month.

Interface for Employees and Contractors

Full time and contracted workers can create their own personal account in the system. Once you enter their basic information, they will receive an email where they will be asked to create a login. Upon opening their account, they will have access to their payroll information at all times. This includes their paystubs, tax information, benefits and more. Employees will be asked to enter and update other information such as direct deposit accounts, W-4 tax withholdings and more.

Benefits Management

Square allows small businesses to pick and manage benefits packages they want to offer their employees. This includes health insurance, workers’ compensation, pre-tax spending accounts and retirement. The employer determines how much will be paid/deducted from every paycheck for each worker separately which is then carried out automatically. Employees will be asked to sign up through their personal accounts, saving the headache of dealing with enrollment paperwork.

Ongoing Rollout of Features

In September 2020, Square rolled out two new features – Instant Payments and On-Demand Pay.  Instant Payments allows employers to immediately issue a payment to an employee or contractor by using their Square Balance. This process bypasses payroll processing delays, can be used as many times as the employer wants and is free of charge. On Demand Payment allows employees access of up to 50 percent of their earned income in their pay cycle, with a $200 limit, immediately upon the completion of their hours. The money can be transferred to a linked debt card for a 1% fee or to Cash App, another Square service, free of charge.

These features are really designed help employees manage their wages by giving them access to funds without having to wait and can be a real boon, especially for hourly workers.

Square Payroll is part of the Square family of solutions which might be why it’s not too strong with integration with other software. Outside of QuickBooks Online, Square payroll doesn’t seem to integrate with other accounting software or more common apps such as the Google suite of products, Microsoft 365 and more. As expected, it works seamlessly with Square Point of Sale & Square for Retail apps.

The entire setup for Square Payroll can be time consuming, especially if the bookkeeper is tasked with manually entering the business’ past records and employee data by themselves. Fortunately, there is the aforementioned employee interface but that sometimes is only be used further down the line from the initial set up but before the first pay run.

The navigation is pretty straight forward and simple and the functionalities cover all of the key bases the software should handle – set up, payroll runs, taxes and basic reports. The designs of each screen themselves are also very fundamental. A good example would be the main employee listing which reminds you of an Excel sheet. All in all, the interface seems to be considerably less polished than similar types of software.

Each employee profile can be accessed at any time to review and change all of the payroll information. Payments are easily scheduled as well as any one time changes which need to be made in cases of reimbursements, bonuses and more. A key advantage is dealing with hourly workers whose salary needs to be recalculated every pay cycle. The integration with time tracking software makes this a simple task.

The issue seems to be taking the service a step further to make it more customizable, provide a more extensive selection of reports and expand their services which information on other topics like HR, changes in tax regulations etc. which are available on other payroll suites.

Finally, the software was clearly designed to be a part of the Square suite of products. When you log in, the dashboard on the left hand side presents a list of other Square solutions you could buy into and link with.  Whether you consider that a plus or minus, depends on what your expectations are of the software.