Square Payroll Review: Is It Right for Your Business?
Charlette has over 10 years of experience in accounting and finance and 2 years of partnering with HR leaders on freelance projects. She uses this extensive experience to answer your questions about payroll.
Robie has more than five years of content writing experience and specializes in writing about payroll and human resources software for small businesses.
This article is part of a larger series on Payroll Services.
Square Payroll is built specifically for small business owners to make payroll processing easier. It is also designed to work flawlessly with Square POS, making it an ideal payroll tool for retailers and restaurateurs who use its point-of-sale solution. In addition, Square Payroll offers flat-rate pricing ($35 per month plus $5 per employee monthly) with a cancel-anytime account option.
What We Recommend Square Payroll For
One of the things you’ll notice highlighted in our Square Payroll review is the software’s ease of use. With an intuitive and simple-to-learn interface, it makes paying employees and even tracking time easy. Apart from automated tax filings, Square Payroll has advanced features that enable you to track tips and manage workers’ compensation and deductions for healthcare.
In short, Square Payroll is best for:
- Small businesses: Square Payroll is specifically intended for small businesses. It is affordable ($35 per month plus $5 per employee monthly) and makes it easy to provide employees with benefits like healthcare, workers’ compensation, and retirement plans.
- Contractor-only companies: Square Payroll has a contractor-only plan for managing and paying 1099 workers and is one of our recommended contractor payroll services for small businesses. At $5 per person monthly, it can pay contractors via direct deposit and file 1099-MISC forms for you. The per-contractor processing fees are also waived during months when you don’t have contract workers to pay.
- Square POS users, especially retailers and restaurants: If your business works with Square’s POS solution, simply add its payroll tool to your subscription to start running employee payments. The seamless integration between Square POS and Square Payroll allows you to track and capture employees’ actual hours worked and tips earned for easy pay processing.
Need to learn more about Square POS? Review our Square POS Ultimate Guide.
When Square Payroll Would Not Be a Good Fit
- Large businesses: Square Payroll is not designed for large operations with thousands of employees; the flexibility and customization needed aren’t available. If this describes your business, consider either ADP or Paychex since both offer flexible pricing plans and robust HR features.
- Companies looking for professional employer organization (PEO) services: While it provides efficient pay processing tools, Square doesn’t offer PEO services to help you manage day-to-day HR tasks. Read our guide to the best PEO companies if you want to find a good option for your business.
Looking for something different? If you need something even more low-cost than Square Payroll, check out our free payroll software guide.
Square Payroll Overview
| PROS | CONS |
|---|---|
| Easy to use | Basic HR features only |
| Flat-rate pricing | Lacks a dedicated payroll specialist |
| Seamlessly integrates with Square POS | Phone support requires a customer code; difficult to reach at times |
| Offers instant and next-day payment options via Square’s Instant Payments | Standard direct deposit has a four-day processing timeline |
Square Payroll Pricing
Features | Employees and Contractors | Contractors Only |
|---|---|---|
Monthly Pricing | $35 plus $5 per employee/contractor | $5 per contractor |
Unlimited Pay Runs | ✔ | ✔ |
Full-Service Payroll | ✔ | ✔ |
Pay by Check, Direct Deposit, and via Square’s Cash App | ✔ | ✔ |
Direct Deposit Timelines | Four days; next-day and instantly with Square’s Instant Payments | |
Automatic Tax Payments and Filings | ✔ | ✔ |
Year-end Tax Reporting | ✔ | ✔ |
Time Tracking via Square POS or the Square Team App | ✔ | ✔ |
Workers’ Compensation | Pay-as-you-go plans | N/A |
New Hire Reporting | ✔ | N/A |
Square Payroll Features
Unlike similar payroll providers that bundle advanced features in its higher tiers, Square Payroll has only one plan that includes all of the tools you need to pay employees, file payroll taxes, and even offer benefit options. Plus, you get software that’s easy to learn and use. Let’s take a look at some of Square Payroll’s essential features to help you decide whether or not it fits your requirements.
Payroll Processing
Whether you employ hourly workers, monthly paid staff, or contractors, finding a payroll service to manage wage payments is critical for small businesses. Square Payroll can help you accurately calculate the prorated salaries of both new hires and resigning staff (especially if they’re joining or leaving outside of your company’s pay periods), and you can pay employees and contractors through direct deposits, manual paychecks, and the Square Cash App.
Aside from unlimited pay runs, you can process off-cycle and bonus payouts for free. Square Payroll also supports multistate payroll, custom pay schedules, paid time off (PTO) tracking, and multiple pay rates. If you’re a Square POS user, its employee tip and commission data are automatically imported into Square Payroll for easy pay processing.
Square Payroll has a mobile payroll app designed specifically for employers and/or payroll administrators—It ranked in our best payroll apps. This allows you to run payroll, track PTO, manage pre- and post-deductions, and view benefits plans on iOS and Android devices—provided an internet connection is available.
Square Payroll can process payroll once per week, every two weeks, once per month, or twice per month.
Instant Payments
While Square Payroll’s standard direct deposit processing time is four days, Square’s Instant Payments feature lets you pay employees the next business day and even instantly through its Cash App—provided you have available funds in your Square balance. This is ideal for businesses that accept customer payments through Square and maintain funds in their Square account.
Tax Filing Services
Square Payroll provides automated tax calculations, payments, and filings for federal, state, and local taxes. At the end of the year, it generates and files W-2 and 1099 MISC forms. Your employees can also download the tax forms and view their pay stubs via the Square Team app (for iOS and Android devices).
Time Tracking
With Square, you can capture employee work hours through the Square POS and Square Team app since both have clock-in/out functionalities. Both also sync directly with Square Payroll so you don’t have to manually import employee timecards.
Employee Benefits
Square’s partnership with SimplyInsured, Guideline401(k), and AP Intego enable you to access and offer benefit options to your employees, such as health insurance, retirement plans, and pay-as-you-go workers’ compensation. Employees can even enroll in benefits online—saving you from having to manage the entire enrollment process by yourself. You also don’t have to manually track benefits deductions since Square Payroll automatically syncs all deduction and contribution data every pay run.
With Square Payroll, you can create a custom benefits package that you can offer to employees.
Integration With Square Products
Many business owners find that using fully integrated solutions saves them a lot of time and stress compared to integrating products from different software providers. One of the biggest appeals of Square Payroll is that it connects seamlessly with other Square products, not just its POS solution. It works with Cash App, a mobile tool for accepting and sending payments, and Square Capital, which provides business loans that could be used to help manage payroll if needed.
Spas, salons, and groomers can use its appointments tool, Square Appointments, with its POS solution to track tips that clients may leave after booking multiple services for a single appointment. Then, tip payments to employees can be processed easily and accurately through Square Payroll.
Third-Party Software Integrations
Given that Square’s product suite integrates with several third-party software, in this Square Payroll review, we’ve listed systems that its payroll module automatically syncs with.
- Accounting: QuickBooks Online
- Time and attendance: Deputy, Homebase, Humanity, When I Work
Square Payroll Ease of Use
- User-friendly interface
- Mobile payroll processing
- Live support for account setup
- Helpful how-to guides
- US-based onboarding and customer support
- Integrates with other Square business solutions
Square Payroll is simple to use and set up. Getting the software up and running takes very little time, especially if you have all of your business and staff information on hand and only need to add a few employees to the system. If you need setup assistance, Square offers live support for new clients.
The overview screen is Square Payroll’s main dashboard. From here, you can easily access basic functions such as adding employees.
While it has user-friendly tools that even allow you to process payroll on mobile devices, in case you have questions about its features, Square has a library of how-to guides that you can easily access. You may also contact its support team via email and phone—although you’ll need a customer code if you want to call Square’s customer service.
Top Square Payroll Alternatives
Best for: Small businesses needing full-service payroll and solid HR tools | Best for: QuickBooks accounting small business users | Best for: Small agricultural companies that need to file Form 943 |
Base monthly fee from: $40 | Base monthly fee from: $45 | Base monthly fee from: $40 |
Per employee monthly fee from: $6 | Per employee monthly fee from: $4 | Per employee monthly fee from: $6 |
If you’re not sure if Square Payroll is right for you, see how it compares with other online payroll services.
What Users Think About Square Payroll
Users who left Square Payroll reviews online like its ease of use, adding that it helps simplify payroll and payroll tax processing. They also appreciate its seamless integration with Square products (such as its POS solution), including the automatic imports of tips and employee time data into its system. Some commented that while Square Payroll is affordably priced, it can get expensive as you add more employees. A few others said that one-on-one customer support can be challenging to reach, and time cards are a pain to review.
At the time of publication, Square Payroll earned the following scores on popular user review sites:
- Capterra: 4.7 out of 5 based on 550 reviews
- G2: 4.4 out of 5 based on some two dozen reviews
These are some of the trends I noticed when reading through online Square Payroll reviews:
Users Like | Users Don’t Like |
|---|---|
Easy to use | Can get expensive as you add more employees |
Affordably priced | Its phone support is difficult to reach at times |
Simplifies payroll processing | Timecards are hard to review |
Bottom Line
Square Payroll is simple to use, and you don’t need a lot of accounting or HR experience to figure out how to set it up—making it ideal for small business owners. If you are already using Square POS, it makes sense to add this payroll service to help you efficiently manage employees’ hours worked, PTO, deductions, and tax obligations. Square Payroll pricing is also affordable with flat rates to help you manage your business’ budget. Sign up for a Square Payroll plan today.
