The Ultimate Square Payroll Review for 2019

Maddie Shepherd

Contributing Writer at Fundera
Maddie Shepherd is a former Fundera senior staff writer and current freelance writer. Maddie has an extensive knowledge of business credit cards, accounting tools, and merchant services, but specializes in small business financing advice. Maddie has a bachelor's degree in Spanish and Latin American cultures from Barnard College.
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As a consumer, a business owner, or both, you’ve likely heard of Square. Whether you’ve paid for something at a store that uses a Square POS, you yourself use a Square POS for your business, or you’ve considered taking on funding through Square Capital loans—you know what Square is.

But did you know that Square offers payroll services, as well? Square Payroll integrates with Square POS systems to pay both contractors and employees. That’s the main idea—but, of course, there’s much more to it than those basics.

To help you wrap your head around the details, we’ve compiled a Square Payroll review on all the information you need to decide whether or not it’s the right software for your business.

Let’s dive into this comprehensive Square Payroll review so that you can learn all of the details on this payroll option.

Square Payroll Features

First, you likely want to know what exactly Square Payroll can do for your business. You’ve probably gathered that it will help you pay your business’s team, as payroll software tends to do. But what will make it stand out from the crowd of payroll service options?

Beyond just making sure your team gets paid on time and in full, Square Payroll offers up some differentiating features that make it a top contender to be any small business’s go-to payroll solution.

So, let’s dive into the details on all of the features:

Square Payroll Administration

With the Square Payroll software, you will not only be able to pay your employees accurately and on-time, but you’ll be able to do it in a way that works for your business. Square Payroll allows you to pay salaried and hourly employees, accommodate multiple pay rates, and gives you the option to run payroll multiple times per month at no extra cost. You’ll also be able to pay your employees using direct deposit or manual check. The Square Payroll software also allows you to administer employee benefits—including health insurance, 401Ks, and pre-tax benefit programs.

Additionally, Square provides the option to set up automatic payroll based on your particular payroll schedule. With this function, Square Payroll will pull employee timecards or salary information, calculate any overtime as well as taxes, and process payroll for you. You’ll receive a notification when everything is complete. Furthermore, if you need to process your payroll on-the-go, you can download the free Square Payroll app. This app will give you access to all of the Square Payroll features from your mobile device.

Square Payroll Timecard Syncing

One of the biggest draws that Square Payroll offers will depend on whether or not you’re already using Square POS systems. If you have your employees and contractors clock in and out through your Square POS system, their timecards will automatically sync with your Square Payroll app.

Essentially, calculating paychecks for hourly members of your team becomes a non-issue if you use a Square POS’s time-tracking abilities and pay your team with Square Payroll. In fact, with Square Point of Sale and Payroll, paying contractors on an hourly basis is perhaps the easiest this process will ever be.

Square Payroll Compliance

At no extra cost, Square Payroll files all federal and state taxes you owe for full-time W-2 employee salaries. At the end of the year, Square Payroll will also generate, file, and mail all W-2 and 1099s on your business’s behalf. They’ll also save you from other bureaucratic headaches that often come with payroll compliance. With Square, you’ll be able to rest assured knowing you’re compliant in all of the following payroll nuances:

  • New-hire reports
  • Post-tax deductions and reimbursements
  • Sick leave tracking
  • Paid time off tracking
  • Workers’ compensation (via Square insurance partner, AP Intego)

square payroll

Square Payroll Online Accounts

Through the online accounts that Square offers, employees and contractors will have 24/7 access to their own personal payroll dashboards. Members of your team will be able to manage their direct deposit bank account, view and download their pay stubs, and update their W-4 tax withholdings. All they’ll have to do is create a login through an email they’ll receive from Square once you add them to your system.

Square Payroll Direct Deposit Payments

Square Payroll direct deposit will rely on members of your team having successfully linked their bank accounts to their Square online payroll account. If they do that, then they’ll receive their direct deposit paychecks according to the cadence that you choose for your payroll. For your paycheck cadence, Square will allow you to choose one of four schedules:

  • Weekly
  • Bi-weekly
  • Semi-monthly
  • Monthly

If you want to change your direct deposit schedule after setting up your account, then you’ll have to contact Square to see if they’re able to accommodate the switch.

Square Payroll Tips Distribution

Square Payroll tips distribution works a lot like their timecard syncing. Every tip processed through your Square POS will be attached to a given employee, and will automatically import to your Square Payroll data.

The Square Payroll direct deposit for each employee will automatically reflect the tips that your business’s Square POS processed and attached to their name.

For cash tips through Square Payroll, you’ll be able to manually enter the data into your Square online payroll account to record for tax season.

Square Payroll Integrations and Support

As we mentioned earlier, if you already use Square POS, you’ll be able to connect your system directly to Square Payroll. In addition, this payroll software gives you access to the Square dashboard for full integration with other Square products as well. Your payroll dashboard will also allow you to create and download custom reports based on paychecks, pay stubs, employee totals or business totals. To connect your payroll and accounting platforms, Square Payroll gives you the ability to integrate with QuickBooks Online.

Furthermore, Square offers U.S. based phone support for their payroll customers and will transfer your data from an old payroll provider if necessary.

Square Payroll Cost

Taking all of these features into consideration: How much does Square Payroll cost? Luckily, Square Payroll pricing is one of the most flexible and affordable on the market. The ultimate cost of your Square payroll software, however, will depend on the kind of employees your team consists of and how many of these employees your team contains. You will be charged for Square Payroll costs on a monthly basis and the process will work a bit differently for teams of only contractors compared to teams of both employees and contractors.

Let’s break down the fees and costs that might come with your account, based on the makeup of your business’s team:

Square Payroll for Contractors Only

If you have a team made up solely of contractors who you pay by the hour, then the Square Payroll cost will be remarkably simple. With Square, 1099 contractors will only cost your business $5 per contractor per month. And that’s it!

If you pay your contractors with this platform, your Square Payroll fees will only be based on how many contractors you have on your payroll, with no flat monthly fees or pay-based fees tacked on.

Square Payroll for Contractors and Employees

If your team consists of contractors and full-time employees, then the Square Payroll cost will be slightly higher. If you have full-time employees on your payroll, then Square will be filing taxes on your business’s behalf and making sure your payroll is fully compliant with tax law. As a result, your Square Payroll fees will also include a monthly base cost of $29, plus $5 per person on your payroll per month. Even with this monthly subscription system, however, Square does not require an annual contract.

Square Payroll Customer Reviews

Now that you’re familiar with all of the logistics that Square Payroll entails, it’s time to zoom out a bit. What do business owners who have actually used this payroll software have to say about it?

We’ve compiled some themes from customer reviews so you can get an idea of common complaints about and praise for the Square Payroll app.

Positive Square Payroll Reviews

As we sifted through all of the positive Square Payroll reviews from customers—and there were many to sift through—we noticed that most happy customers remarked on how easy it was to set up their payroll as well as how user-friendly and flexible the software is. Additionally, many reviews laud their customer service as extremely helpful and professional.

Even more, Square Payroll reviews often feature customers raving about the affordability of this payroll software and how it is not only cost-effective but that it also makes the payroll process quick and simple. Plus, many customers have written that data tracking and error correction in the Square app is much easier than they had anticipated.

All in all, Square Payroll reviews suggest that this payroll service has many happy customers.

Negative Square Payroll Reviews

That said, not every Square Payroll review is a positive one. A common complaint within Square Payroll reviews is that this payroll app tends to be a bit wonky when handling time zones—customer reviews state that Square Payroll timecards don’t autocorrect the time zone when you manually enter them. Some customers also report bugs with other facets of the software, as well as mention specific areas, like search functionality and dashboard display, that they would like to see improved.

Plus, Square Payroll reviews often feature customers complaining about the short turnaround from when a business owner receives a payroll reminder and the payroll deadline. If you find that you’re often busy around your payroll deadline, then keep this one little hitch in mind before opting for payroll with Square.

square payroll

Alternatives to Square Payroll 

After reading through all the details of this Square Payroll review, you might still be hesitant to decide on this payroll software. Though the Square Payroll pricing is one of the most affordable on the market, you might need more from your payroll service. You might need your payroll software to support more employee benefits that Square can. Or perhaps you simply don’t use a Square POS system and most of this payroll software’s benefits are lost on you as a result.

Either way, you’ve got a wide variety of alternatives to Square to choose from. Here are a few options worth considering:

Patriot Payroll

For a Square Payroll software alternative that is both affordable and highly-reviewed, you might look into Patriot Payroll. Patriot Payroll is an online-based solution with two different plan offerings: Basic and Full Service. The Basic plan includes unlimited payroll runs, flexible payroll cadences, time-off tracking, and paychecks through multiple vehicles, including direct deposit. The Patriot Payroll Basic plan also gives you payroll setup assistance and expert support, as well as a self-service portal for your employees. This is perhaps one of the most inexpensive plans out there, costing a monthly base fee of $10 plus a $4 per employee per month fee. Additionally, Patriot offers a free 30-day trial of their payroll software.

To add tax filing to your payroll capabilities, you can choose Patriot’s Full Service payroll plan. In addition to all of the features included in the Basic plan, with the Full Service plan, Patriot will file your relevant federal, state, and local taxes and generate year-end reports. They’ll also withhold accurate taxes for tips and record these on pay stubs and on W-2 or W-3 forms. This plan, costing $30 per month, plus $4 per month per employee, is certainly more expensive than the Basic plan, but is very competitive with the cost of Square Payroll. Moreover, to expand the functionality of your payroll software even further, Patriot offers time and attendance and HR software add-ons. If therefore, you don’t currently use Square products and won’t benefit as greatly from their payroll software offering, Patriot Payroll is a cost-effective alternative with comparable capabilities.

Gusto Payroll

If you’re looking for payroll software that supports more employee benefits, on the other hand, you might consider Gusto Payroll. Gusto offers three payroll plans: Core, Complete, and Concierge. The Core plan costs $39 per month, plus a $6 per employee per month fee. Although this may seem high compared to Square and Patriot, even at their first plan level, Gusto gives you an impressive range of features for that price. The Core plan includes full-service payroll capabilities—such as tax filings and payments, direct deposits, and tip credits—as well as an employee self-service portal, employee information profiles, health benefits and workers’ comp administration, PTO tracking, and unlimited customer support.

The next plan tier, the Complete plan, Gusto charges $39 per month, plus $12 per employee per month. The Complete plan includes all of the features of Core, as well as administrative permissions, PTO approvals, employee offers and onboarding, an employee directory, and employee surveys. The last plan, Gusto Concierge, costs $149 per month plus $12 per month per employee. In addition to all of the components of both Core and Complete, the Concierge plan offers unlimited access to certified HR professionals, an HR resource center, and a dedicated Gusto payroll customer services team. Gusto also gives you the option to add on further HR services like commuter benefits, college saving plans, and tax-advantaged spending accounts for associated monthly costs.

At the end of the day, Gusto Payroll may be more expensive than Square and Patriot, but with any of their plans, your business is receiving many of the capabilities of both payroll and HR management software rolled into one. Therefore, if you want a payroll software that provides a truly robust range of services, Gusto is a platform worth considering.

Square Payroll: The Bottom Line

Ultimately, there are a variety of payroll software options on the market—but you’re the only one who can decide which solution is right for your business. This being said, if you already use Square POS or one of Square’s other products, there’s no doubt that Square Payroll is worth considering. Not only is this payroll software easy to use and affordable, but it includes many features—from direct deposit to tip distribution—that can benefit your business operations by streamlining your payroll and tax processes. However, if you’re not already utilizing a Square product, you might want to consider other payroll services to see if an alternative offering will better fulfill your business’s needs. We would recommend, therefore, deciding on the payroll software elements that matter most to your business (if you haven’t already), research and explore your various options, and test any free trials that are available to you—this way, you’ll have the best idea of how different platforms work and how they can meet your business payroll requirements.

Editorial Note: Fundera exists to help you make better business decisions. That’s why we make sure our editorial integrity isn’t influenced by our own business. The opinions, analyses, reviews, or recommendations in this article are those of our editorial team alone. They haven’t been reviewed, approved, or otherwise endorsed by any of the companies mentioned above. Learn more about our editorial process and how we make money here.

Maddie Shepherd

Contributing Writer at Fundera
Maddie Shepherd is a former Fundera senior staff writer and current freelance writer. Maddie has an extensive knowledge of business credit cards, accounting tools, and merchant services, but specializes in small business financing advice. Maddie has a bachelor's degree in Spanish and Latin American cultures from Barnard College.

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