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Square Payroll Review: Is It the Right Choice for You?

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featured image: Square Payroll Review- Is It the Right Choice for You

Managing payroll can be a headache for small businesses, often involving complex calculations, time-consuming paperwork, and the ever-present worry of tax deadlines. Square Payroll aims to simplify this process, offering a user-friendly platform with features to automate tasks, ensure compliance, and keep your team happy.

This review dives deep into Square Payroll’s functionalities, exploring its strengths, limitations, and how it can benefit your small business.

Square Payroll Top Features Overview

square payroll top features

Square Payroll offers features designed to simplify payroll processing and team management for small businesses. Here’s a quick rundown of its top features:

  • Simplified Payroll Processing: Access payroll features easily, including direct deposits, automatic tax calculations and filings, and pay stub generation.
  • Mobile App for Team Management: Employees can use the Square Team App to clock in/out, view paystubs, track hours, and access estimated earnings – all from their phones. 
  • Time Tracking: Square Payroll integrates with Square POS for time tracking or allows employees to clock in/out via the Square Team App, eliminating manual timesheets.
  • Tax Filing and Compliance: Square Payroll handles federal and state payroll tax calculations, filings, and W-2/1099-NEC generation, reducing your workload.
  • Square Payroll Specialists: Get access to a team of payroll specialists for assistance with setup and ongoing questions.
  • Optional Add-On Features: Features like unlimited HR advice, customizable employee handbook, workers’ compensation insurance, health insurance and 401(K) plans, and instant deposit

Square Payroll Pros and Cons

Pros

  • Simple and User-Friendly: Square Payroll is known for its intuitive interface, making it easy for business owners with no prior payroll experience to navigate.
  • Cost-Effective: Square Payroll’s pricing structure is transparent and competitive, especially for businesses with a small workforce. They offer a plan specifically for contractors, making it a budget-friendly option.
  • Mobile App Convenience: Both employers and employees can access and manage payroll information through the Square Team App, offering flexibility and convenience.
  • Automated Features: Square Payroll automates many time-consuming tasks, including tax calculations, deductions, filings, and direct deposits, saving you time and minimizing errors.
  • Integrations: Square Payroll integrates with other Square products like Point of Sale, easing processes for businesses already invested in the Square ecosystem.
  • Square Payroll Specialists: Get help from a team of specialists to ensure a smooth setup and answer any questions you may have throughout the payroll process.

Cons

  • Limited Features Compared to Competitors: While Square Payroll offers core functionalities, some businesses may require more advanced features like in-depth reporting or project management tools found in other payroll services.
  • Limited Add-On Options: While Square Payroll offers some valuable add-on features, the selection might be limited compared to other payroll services with a wider range of specialized options.
  • Focus on Square Users: Square Payroll integrates best with other Square products, so businesses not already using Square may not benefit from the full range of its functionalities.

Square Payroll is a strong contender for small businesses seeking a user-friendly and affordable payroll solution. However, businesses with complex needs or those requiring a wider range of features and integrations may want to explore other payroll service options.

Square Payroll Processing: Streamlined Payroll Management

square payroll processing

Square Payroll aims to simplify the payroll process, offering features to automate calculations, facilitate payments, and manage employee information. Here’s a closer look:

Direct Deposit and Mobile Access: Square Payroll allows for direct deposits, cutting the need for printing checks and ensuring employees receive their pay promptly. Employees can also access their paystubs and other payroll information through the Square Payroll app, offering them more convenience.

Automated Tax and Deduction Calculations: Square Payroll handles tax calculations and deductions, reducing the workload for business owners. This can be especially helpful for businesses unfamiliar with payroll tax regulations.

Mobile Payroll Management: The Square Payroll app les users manage payroll functions from their smartphones or tablets. This includes reviewing employee details, running payroll cycles, and processing payments.

square payroll mobile app

Straightforward Setup and Processing: Square Payroll guides users through the setup process, ensuring a smooth connection to your business bank account. Once set up, running payroll involves entering employee hours and initiating the process. Square Payroll then handles the remaining steps, including issuing payments and filing tax forms.

It’s important to note that some users may find the setup process cumbersome, particularly for those unfamiliar with payroll software. 

Overall, Square Payroll is a good option for businesses seeking a user-friendly payroll solution with functions like direct deposit, mobile access, and automated tax calculations. Businesses requiring more advanced features or in-depth reporting tools may want to consider exploring alternative payroll services.

Compliance

square payroll compliance features

Square Payroll goes beyond processing payments, offering features to help businesses stay compliant with employment laws and regulations. Here’s a breakdown of its compliance capabilities:

Automatic Updates and Resources:

Square Payroll keeps you informed. They’ll send email alerts through the Square Team app whenever there are HR or compliance updates that might affect your business. These alerts can help you stay ahead of the curve and avoid any potential issues. In addition to alerts, Square Payroll offers a library of resources, including guides, checklists, and videos, covering key HR topics and employment laws. This library allows you to delve deeper into specific areas of compliance.

Optional Add-On Features:

Square Payroll offers several optional add-on features that can further strengthen your compliance efforts:

  • Unlimited HR Advice: Gain access to a team of HR experts certified by HRCI or SHRM. This service allows you to consult with HR professionals on any questions or concerns you may have, ensuring you’re making informed decisions regarding your workforce.
  • Customizable Employee Handbook: Develop an employee handbook tailored to your specific business needs. Square Payroll helps you create this handbook and sends alerts when policies become outdated, prompting you to make necessary revisions.
  • Workers’ Compensation Insurance: Square Payroll integrates with pay-as-you-go workers’ compensation insurance. This simplifies the process of getting coverage and ensures synchronization with your payroll data.

Time Tracking

Managing employee hours and calculating payroll can be a time-consuming task. Square Payroll aims to simplify this process with built-in time tracking features. Here’s what it offers:

Simplified Timekeeping

square payroll time tracking

Square Payroll offers multiple options for employees to track their work hours. They can use the Square Team App to clock in and out, taking out the need for manual timesheets. 

Square Payroll integrates with Square POS, allowing employees to clock in/out directly from the point-of-sale system if your business uses it. This approach minimizes data entry errors and simplifies the time tracking process.

Automatic Accrual and PTO Tracking:

Square Payroll goes beyond capturing work hours. It can also calculate and track paid time off (PTO) balances for vacation and sick leave policies you define. This eliminates the need for manual calculations and ensures accurate tracking of accrued PTO for your employees.

Integrated Tip Management (for applicable businesses):

square payroll tip management

For businesses where employees receive tips, Square Payroll helps with tip management. It allows you to import tip data directly into your payroll run, automatically calculating direct tips earned by employees. This integration saves time and reduces the risk of errors during payroll processing.

Advanced Scheduling and Labor Cost Insights (Add-On):

Square Payroll offers an optional add-on feature that provides scheduling capabilities. This allows you to create, manage, and publish work schedules for your entire team. 

You can get insights into labor costs with reports that detail all wages, including those associated with multiple pay rates and flexible payment options. Giving you a clearer picture of your overall payroll expenses.

While Square Payroll’s core time tracking features are convenient, it’s important to note that some businesses may require more specific features offered by dedicated time tracking software. These might include features like project management tools, detailed timesheet views, or mobile apps optimized specifically for timekeeping.

Filing Taxes

square payroll tax forms

Square Payroll positions itself as a full-service payroll solution, that wants to remove the complexities of payroll taxes. Here’s how Square Payroll handles tax filing for your business:

Automated Tax Filings and Calculations:

It automatically calculates federal and state payroll taxes for your employees, so you don’t have to do manual calculations or rely on separate invoicing software (like 1099 contractors). Square Payroll also takes care of withholding these taxes from your employees’ paychecks and filing them with the appropriate tax agencies on your behalf. This can reduce the time and effort you need to dedicate to tax-related tasks.

W-2s and 1099-NEC Generation and Filing:

1099-nec tax form on square payroll

Square Payroll helps with year-end procedures by automatically generating and electronically filing W-2 forms for your employees and 1099-NEC forms for any independent contractors you work with. These forms detail income earned throughout the year and are crucial for both employees and contractors when filing their tax returns.

Multiple Tax Jurisdiction Support:

Businesses operating in multiple states or tax jurisdictions can benefit from Square Payroll’s ability to handle complex tax situations. The platform can manage tax calculations, payments, and filings for each relevant tax authority, ensuring compliance regardless of your business location.

New-Hire Reporting:

Square Payroll offers an optional feature for new-hire reporting. When adding a new employee, you can choose to have Square Payroll automatically report the new hire to the appropriate state agencies, fulfilling a legal requirement in most jurisdictions.

It’s important to note that Square Payroll’s tax features may not be suitable for all businesses. Businesses with highly complex tax needs or those requiring in-depth tax reporting capabilities may want to consider consulting with a tax professional or exploring alternative payroll solutions.

Customer Support

Square Payroll offers various customer support options to assist users. Here’s a breakdown of the available channels:

Contact Options:

  • Phone: Square Payroll provides live support during business hours (likely Pacific Time) for users seeking immediate assistance.
  • Email: For less urgent inquiries, users can submit email support tickets and receive a response from the Square Payroll support team.
  • Chat: For real-time chat support, users can connect with a Square Payroll representative through the platform’s chat interface. This can be a convenient option for quick questions or troubleshooting.
  • Online Help Center: Square Payroll offers a collection of online resources, including FAQs, how-to articles, and video tutorials. This self-service option allows users to search for solutions at their own pace.
  • Community Forum: The Square Payroll community forum allows users to connect with other Square Payroll users and exchange knowledge, ask questions, or share best practices. While not a direct support channel from Square itself, the forum can be a valuable resource for finding answers or solutions from other users.

Considerations:

  • Availability: Phone support may not be available 24/7, and response times for email or chat support might vary depending on volume.
  • Depth of Knowledge: While the online Help Center offers valuable resources, some users might require more in-depth support from a qualified representative.
  • Specialized Needs: Businesses with complex payroll needs or those encountering intricate tax issues may require assistance from a tax professional or Square Payroll’s paid add-on features, such as access to HR experts.

Team Management

Beyond core payroll functionalities, Square Payroll offers additional features designed to ease team management tasks. Here’s an overview of its team management capabilities:

Central Communication and Timekeeping:

Square Payroll integrates with the Square Team App. This mobile app empowers employees to clock in and out of work shifts directly from their phones, cutting the need for paper timesheets and minimizing data entry errors. Additionally, the app allows team members to view their current and past hours worked, track accrued paid time off (PTO), and access estimated earnings and pay stubs.

Integrated Payroll and Tax Filing:

Square Payroll eliminates the need for separate systems to manage payroll and file taxes. When you run payroll through Square Payroll, employee hours and wages automatically sync with the tax filing system. This cuts out the need for manual data entry between different platforms, streamlining payroll processing and ensuring accurate tax filings.

Employee Benefits (Add-On):

Square Payroll partners with external providers to offer additional employee benefits, expanding its functionality beyond core payroll features:

  • Health Insurance: Partner with SimplyInsured to offer medical, dental, and vision insurance to your employees. This can be a valuable perk for attracting and retaining talent.
  • 401(k) Retirement Savings: Square Payroll integrates with Guideline, allowing you to offer your employees a 401(k) retirement savings plan. This benefit helps employees save for the future and can be a competitive advantage for your business.

Instant Deposit (Limited Availability):

Square Payroll offers an “Instant Deposit” feature for eligible team members who use Cash App. This allows employees to access a portion of their earned wages two days earlier than the designated payday. However, this feature is only available in specific states.

While Square Payroll doesn’t offer functions like managing inventory or directly importing timecards from third-party systems, it integrates with Square Point of Sale for businesses that use it. This integration allows employees to clock in/out directly from the POS system, further improving time tracking processes.

Square Payroll Pricing: Straightforward Options

square payroll pricing

Square Payroll offers two pricing plans:

  • Pay Employees & Contractors: $35 per month + $5 per employee or contractor paid per month. This plan is ideal for businesses that pay both employees and independent contractors.
  • Pay Contractors Only: $5 per contractor paid per month. This is a cost-effective option for businesses that solely utilize independent contractors.

Square Payroll has transparent pricing, and customers pay when you process payroll, not for inactive months. Keep in mind that some advanced features, like HR advice or 401(k) plans, require additional add-on fees.

Visit their pricing page

Square Payroll: A Final Verdict

Square Payroll offers a user-friendly payroll solution ideal for small businesses, especially those already using Square products and with a focus on hourly workers or contractors. 

Its core features like automated tax filing, direct deposit, and mobile access for employees make payroll processing a breeze. 

Businesses with complex needs or those requiring a wider range of features and integrations may want to consider exploring more robust payroll service options.

So, is Square Payroll right for you?

Consider Square Payroll if:

  • You’re a small business owner looking for an easy-to-use payroll system.
  • You primarily pay hourly workers or contractors.
  • You already use Square products and want a seamless integration.
  • You value features like automated tax filing, direct deposit, and mobile access for employees.

If your business has complex payroll needs, requires in-depth reporting, or needs integrations beyond the Square ecosystem, then exploring other payroll service options might be more suitable.

Square Payroll FAQs:

How does payroll work with Square?

Square Payroll automates tax calculations, deductions, and payments for your employees. You simply enter their hours, and Square Payroll handles the rest, including direct deposits and tax filings.

Can I get a pay stub from Square?

Yes, employees can access their paystubs and other payroll information through the Square Team App.

Does Square Payroll automatically pay taxes?

Yes, Square Payroll automatically calculates, withholds, and files federal and state payroll taxes for your employees.

Is Square Payroll good?

Square Payroll is a good fit for small businesses, especially those already using Square products and with a focus on hourly workers or contractors. Its user-friendly interface and mobile app make it convenient. However, for complex needs, consider alternate payroll services.

What are the benefits of Square Payroll software?

Benefits include:

  • Simplified payroll processing
  • Automated tax calculations and filings
  • Direct deposit for employees
  • Mobile app for employee access and time tracking (for some features)
  • Cost-effective pricing for basic plans
  • Square Payroll may not be as feature-rich as some other payroll services.
  • Customer support availability might be limited compared to other options.

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