Square Payroll Review 2021

Like Square’s other apps and services, Square Payroll is affordable and easy to use. And if you only pay contractors, Square Payroll doesn’t include a monthly base fee—you pay $5 per month per payee, and that’s it.
Best for paying contractors
Square
Square Payroll
3.9 out of 5 stars
3.9
  • Starting at $5.00/mo./payee*
  • Check
    No base price for contractor-only plan
  • Check
    Employer-facing app for on-the-go payroll
  • Check
    Multiple employee payment options

Data as of 7/15/21. Offers and availability may vary by location and are subject to change.
*No monthly base fee with contractor plan only.

Thanks to its solid HR add-ons, highly reviewed mobile payroll app, and affordable base price, Square Payroll is one of our favorite payroll software solutions. Square Payroll is most affordable for small-business owners who only employ contractors—there’s no monthly base fee for contractor-only Square Payroll plans, just a $5 charge per person paid. Read our Square Payroll review to see if Square’s user-friendly payroll software is right for your business.

Square Payroll plans and pricing 2021

Plan type
Base fee
Additional cost per employee or contractor
Year-end tax forms filed for you
Learn more

Employees + contractors

$29.00/mo.

$5.00/payee

W-2 and 1099-MISC

Contractors only

None

$5.00/payee

1099-MISC

Data as of 7/15/21. Offers and availability may vary by location and are subject to change.

What is Square Payroll?

Square Payroll is an online payroll service provider by Square, which also offers popular point-of-sale software. As a full-service payroll provider, Square Payroll runs payroll, calculates payroll taxes, and automatically files those taxes with the right state and federal agencies. It integrates easily with Square’s other products (more on that below), and with its mobile app for iOS and Android, you can pay employees on the go.

Square Payroll is the best payroll solution for contract work

Square Payroll is a bargain no matter how you slice it. At $29 per month, it’s cheaper than just about any full-service payroll plan out there except for SurePayroll's, which starts at $29.99 a month.

But if you work mainly with contractors, Square Payroll offers next-level affordability: there’s no monthly base fee for employers who pay only contractors—just a $5 fee for each contractor you pay, every time you pay them.

That’s it.

Full-featured affordability

Even with its low monthly base cost, Square Payroll offers most full-service features small-business owners need to save time on payroll:

  • Unlimited payroll runs in every state
  • Automatic state and federal payroll tax filing
  • Quarterly state and federal tax filing
  • W-2 and 1099 forms generated and mailed to your employees
  • Automated payroll runs

Although you’re primarily responsible for setting up payroll and having your employees add their own information, Square’s US-based customer service team can step in if you need assistance.

Square’s low cost does have a small trade-off: it has slightly fewer features than pricier competitors. For instance, Paychex and ADP have more comprehensive reports, which are important for bigger businesses with complicated financials. Gusto has an autopay feature and more thorough HR and onboarding support. Additionally, since Square Payroll has just one plan, it isn’t too scalable for businesses that want more complex features and employee support as they grow.

Of course, if you primarily employ freelancers or seasonal W-2 employees, you don’t really need a payroll provider with scalable plans—a flat-rate plan should suit you fine. And even though Square Payroll doesn’t have loads of onboarding assistance, its workers comp, health insurance, and retirement add-ons are often the only HR benefits the smallest of small-business owners need.

Best Small Business Payroll Software
Gusto
Best overall
4 out of 5 stars
4.0
Paychex
Best for growth
4 out of 5 stars
4.0
OnPay
Best for new employers
4 out of 5 stars
4.0
ADP
Best Payroll + HR packages
3.5 out of 5 stars
3.5
SurePayroll
Best customer service
3.4 out of 5 stars
3.4
Learn more about our top brands.

Automatic annual and quarterly tax filing

As a full-service payroll solution, Square Payroll automatically files your taxes and all of the most important end-of-year tax documents for you. And as per the industry norm, Square Payroll includes a tax-filing guarantee. If Square Payroll makes a mistake on your taxes, it promises to pay any associated fees while dealing directly with the IRS on your behalf.

In contrast, QuickBooks Payroll offers a similar guarantee with its most expensive plan only—and yes, that’s why we rank QuickBooks Payroll so low on our best payroll software article.

Square integration

Square Payroll integrates neatly with other Square products, including Square Point of Sale and Square Capital. If your employees or contractors use Square Point of Sale to clock in and out, that data transfers easily and immediately to Square Payroll. Neither you nor your employees have to automatically add or approve hours, and with the employee self-service portal, workers can check their pay stubs and add their bank account information to set up direct deposit.

Square Payroll also syncs with non-Square software, including accounting software like QuickBooks Online and Xero. If you want to use QuickBooks’s excellent bookkeeping services but don’t feel great about its mediocre payroll plans (we don’t blame you), Square pairs great with QuickBooks.

Health insurance, 401(k)s, and workers compensation insurance

Like most full-service payroll competitors, Square Payroll offers health insurance, retirement package, and workers compensation add-ons for businesses with employee benefits. Via Square Payroll, you can access the following perks:

  • Medical, dental, and vision plans starting at $190/month through SimplyInsured
  • 401(k) retirement plans starting at $39/month + $8/month per employee through Guideline
  • Workers compensation plans through AP Intego—contact for a quote

Since you can access these benefits directly through Square, health insurance premiums and retirement plan funds are automatically deducted from your workers’ paychecks without you lifting a finger.

Square Payroll vs. Gusto: Key feature comparison

FeatureContractor-OnlyContractor + EmployeeGusto Core
Starting base price$0.00/mo.$29.00/mo.$39.00/mo.
Additional price per user$5.00/contractor/mo.$5.00/payee/mo.$6.00/payee/mo.
Automatic payroll tax deductions
Icon Yes  DarkYes
Icon Yes  DarkYes
Icon Yes  DarkYes
Direct deposit and paper check payments
Icon Yes  DarkYes
Icon Yes  DarkYes
Icon Yes  DarkYes
Employer-facing mobile app
Icon Yes  DarkYes
Icon Yes  DarkYes
Icon No  DarkNo
PTO and sick leave tracking
Icon Yes  DarkYes
Icon Yes  DarkYes
Icon Yes  DarkYes
New hire reporting
Icon No  DarkNo
Icon No  DarkNo
Icon Yes  DarkYes
Accounting software integration
Icon Yes  DarkYes
Icon Yes  DarkYes
Icon Yes  DarkYes
Reporting
Basic, customizable payroll reports
Basic, customizable payroll reports
Thorough payroll, tax, and benefits reports
Learn more

Data as of 7/15/21. Offers and availability may vary by location and are subject to change.

Square Payroll pros and cons

Pros
Pro Bullet Well-reviewed apps for employers and employees
Pro Bullet Free seasonal inactivity (no plan commitments required)
Cons
Con Bullet Limited scalability
Con Bullet Limited reporting

Square Payroll pros

Unlike most payroll solutions, Square Payroll has an employer-facing mobile app that lets business owners review timecards and pay employees anytime, anywhere. While you can’t set the app to autopay employees on a set schedule, you can use it to review employee hours and submit payroll numbers even when you’re away from the office. Both the Android and iPhone payroll apps are incredibly well reviewed: iOS users give it 4.8 stars out of 5,1 and Google Play reviewers give it 4.5 out of 5.2

Along with its user-friendly app, Square Payroll makes life easier for employers by eliminating plan contracts or annual commitments. If you employ seasonal W-2 employees, you don’t have to pay a monthly base fee to keep your payroll plan once their seasonal employment ends. Just freeze your Square account, then reactivate it when you have employees again.

Square Payroll cons

Tired of payroll? Gusto handles payroll taxes and more

With unlimited payroll runs and automatic tax filing, Gusto helps small-business owners worry less about payroll and put more time into growing their business.

  • Get automatic payroll tax filing, including end-of-year tax forms
  • Manage workers compensation insurance
  • Track paid time off, sick leave, and holiday pay

Square Payroll FAQ

Is Square Payroll expensive?

Nope, Square Payroll isn’t expensive—in fact, Square Payroll is one of the most affordable full-service payroll plans you can find. With a $29-a-month base fee (waived if you only pay contractors), Square Payroll is cheaper than almost any other payroll provider.

Love Square Payroll’s price but not its features? SurePayroll’s $29.99-a-month full-service plan and Patriot Software’s $30-a-month plan have similar prices with slightly different features.

Does Square Payroll print checks?

Yes, Square Payroll lets you pay employees through a paper check. You can use the software to generate a PDF with the employee’s paycheck information, which you’ll then print out on a personalized check. (Bear in mind that you’ll need to purchase and customize the check stock yourself.)

Along with paper checks and direct deposit, Square Payroll also lets you pay employees via the Cash app.

Does Square Payroll have good customer service?

Square Payroll’s US-based customer service team is available slightly outside regular business hours: 6:00 a.m. to 6:00 p.m. Pacific time, Monday through Friday. The SquareUp payroll help center also has a pretty comprehensive forum of how-tos and customer questions.

As for customer reviews, most customers have an excellent experience with Square Payroll’s software and customer service team. On the review site Trustpilot, Square as a whole gets a 4.7 out of 5 with most reviewers calling out Square’s stellar customer service.3 Reviewers also call out Square Payroll’s simple set-up process, user-friendly interface, and (of course) affordability.

What’s the difference between a 1099 contractor and a W-2 employee?

A 1099 contractor is an independent, self-employed worker who pays their own payroll taxes at the end of the year. Employers don’t provide benefits to 1099 contractors (though depending on your state, you might need to offer workers compensation insurance). At the end of the year, you or your payroll service provider will mail contractors a 1099-MISC tax form, which shows how much the contractor made while working with you and lets them file their own taxes.

In contrast, a W-2 employee works directly for your company. Along with deducting the right amount of payroll taxes from their paycheck each pay period, you must offer benefits like health insurance. At the end of the year, you (or your payroll service provider) will mail employees a W-2 form that lists the employee’s gross wage, tax withholdings, and net wage after taxes.

Which pay schedules does Square Payroll support?

Square Payroll supports weekly, biweekly, semimonthly, and monthly pay schedules.

The takeaway

We’ll make it simple: if your publishing business works mainly with freelance editors or your yoga studio hires teachers as contractors, you should probably be using Square Payroll. In the expensive world of payroll runs, paying only $5 per contractor with no monthly base fee is an absolute steal. And if you use Square’s payroll app and sync Square Payroll with your contractors’ timecards, you hardly have to do any work to pay your contractors on time.

Not sure Square Payroll is right for your business? Check out our list of the year’s best online payroll software, which reviews more payroll solutions for businesses like yours.

Related reading

Disclaimer

At Business.org, our research is meant to offer general product and service recommendations. We don't guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services.

Sources
1. App Store, “Square Payroll.” Accessed July 15, 2021.
2. Google Play, “Square Payroll.” Accessed July 15, 2021.
3. Trustpilot, “Square US.” Accessed July 15, 2021.

Kylie McQuarrie
Written by
Kylie McQuarrie
Kylie McQuarrie has been writing for and about small businesses since 2014. Prior to writing full-time, she worked with a variety of small-business owners (from freelance writers to real-estate solopreneurs), which gave her a front-row look at small-business owners' struggles, frustrations, and successes. Currently, she’s Business.org’s accounting and payroll staff writer. Her work has been featured on SCORE.org, G2, and Fairygodboss, among others.
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