Square Payroll Review: Pros, Cons & Alternatives

Square is a PCI-compliant end-to-end payment processor.¹ Since 2020, Square has served more than 64 million businesses.²

Square Payroll is a cost-effective, easy-to-use service with a range of integrations.

This Square Payroll review will break down all the features, so you can see if it’s the best fit for your business. We’ll also compare it with other providers that support international payroll management.

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Square Payroll: Quick overview

Here’s an overview of our review of Square Payroll services.

Feature	Square Payroll
Fees	For paying employees and contractors: $35 USD monthly subscription fee plus $5 USD per person paid per month For paying contractors only: $5 USD per person paid per month
Ease of use	Convenient to run payroll and manage your team all from the Square app
Payroll tax filing	Automatic tax filing, calculations and payment to federal and state agencies
Customer support	Live customer support chat and access to a team of payroll experts³
Great for	Small to medium-sized businesses. Good for hourly paying or seasonal businesses, due to pay-as-you-go feature

In this article:
Pros and Cons of Square Payroll Square Payroll key features Alternatives to Square Payroll

Pros and Cons of Square Payroll

Pros

Cons

Automatic tax filing and withholding Square Team app for easy team management Access to integrated third-party services to provide custom employee benefit packages Integration with QuickBooks for accounting and Bambee for HR compliance Cost-effective with no hidden fees Employees are able to clock in and out, as well as request time off through the app Capable of running multi-state payroll Pay-as-you-go feature and ability to cancel anytime makes it flexible for small to medium-sized businesses

Third party employee benefit providers come at an extra cost No reporting or analytics features - lack of insight into operations

Square Payroll key features

Now that we’ve covered the pros and cons of Square Payroll processing, let’s dive into its features.

Payroll processing

With Square Payroll, you can manage your employees and run payroll from anywhere. This you can do all through Square’s convenient mobile app.³

Square Payroll allows you to pay your employees with direct deposits, checks, as well as via Cash App.³

Square Payroll automatically calculates the wages of your employees and contractors. It ensures payments are made on time. It also ensures tax compliance and is capable of running multi-state payroll processing across all 50 states.³ ⁴

Square Payroll also comes with extra features such as the ability to freeze subscription services. Likewise, it integrates with QuickBooks for accounting and Bambee for HR compliance.³

If you’re looking to pay employees and contractors, Square Payroll charges a monthly subscription fee of $35 USD plus $5 USD per person paid per month.⁵

But if you’re only needing to pay contractors, then you’ll pay just $5 USD per person paid per month.

You should also consider that some features aren’t available if you’re subscribed to the contractor only plan. For example, automatic tax filing, benefit deductions, and Paid Time Off (PTO) and sick leave tracking, are only available on the employee plan.⁶

Team management

Square Payroll comes with a range of team management features that simplifies payroll processing.

With the Square Team app, your employees can see their pay stubs, request time off, and update their direct deposit payment method.

Similarly, employees can clock in and out, using time cards. These allow them to track their working hours and earnings.⁷

With this information, automated payroll processing is simplified.

Additionally, Cash App integrates directly with Square Payroll. Employees can get paid one day faster via Cash App. On top of this, they can use the free debit cash card anywhere that Visa is accepted.⁸

Eligible employees can also immediately access up to $200 USD of their wages through the app.⁹

Employee benefits

Through Square Payroll, you can offer your employees a range of benefit packages. Square integrates with third-party services to offer you these employee benefits.

After setting up and integrating your benefit provider, Square manages the rest. From calculating contributions and deductions to employee enrollment, Square handles it.¹⁰

With SimplyInsured, you can offer your employees medical, dental and vision insurance plans. Plans start from $190 USD per month, though you can contact them to get an exact quote for your business.¹¹

Similarly, via Guideline, you can offer your employees affordable 401(k) retirement plans. Their plans start at $49 USD per month + $8 USD per active participant.¹²

Likewise, with Next Insurance, you can provide an integrated pay-as-you-go workers’ compensation. This means you’ll only be billed for hours worked. Additionally, the cost will be spread out over the year on a pay-as-you-go basis.¹⁰

Depending on your business, you can expect to pay between $50-100 USD per employee per year.¹³

These are just a handful of the benefits you can offer your employees. With Square Payroll, you can fully customize your benefit package and decide exactly what you want to offer.¹⁰

Tax reporting

Square Payroll ensures complete compliance with federal and state tax laws.

Square Payroll automatically files federal and state employer tax forms on behalf of your company, saving you the work. They generate copies of forms, such as Form 1099-NEC, W-2 and W-4, for each of your employees.

These forms can be sent either physically or electronically to your employees, allowing them to sign them.¹⁴

Every time you process payroll, Square calculates and withholds taxes. This ensures they have the correct amount to pay state and federal agencies. Square doesn’t charge any extra fees for tax filings and payments. They include this service in the monthly subscription fee.¹⁴

Alternatives to Square Payroll

Square Payroll offers small to medium-sized businesses an affordable payroll processing solution. But, it’s not the only alternative out there.

Here are three other payroll processing providers to consider.

Gusto

Gusto is another payroll processing solution, but with some extra features.

Gusto offer insights and reporting tools such as:

• Actionable team reports
• Workforce and project cost analyses
• Automated custom report creation
• Tax credits for R&D¹⁵

On top of this, Gusto offers an end-to-end onboarding solution that scales with your business. They offer a range of features, from applicant tracking to custom onboarding checklists.¹⁵

Gusto offers a suite of HR tools which they claim can save businesses up to 5 hours per month on HR.¹⁶ It also enables you to make cross border payroll payments to over 95 countries, for an extra fee.¹⁷

Gusto offers three different subscription plans, depending on the services you need:

• Simple - $40 USD per month plus $6 USD per month per person paid
• Plus - $80 USD per month plus $12 USD per month per person paid
• Premium - custom price plan based on your business¹⁷

Overall, these features make Gusto a great option for businesses wanting to scale.

RUN Powered by ADP®

RUN powered by ADP® is another payroll processing solution that caters to businesses of all sizes.

ADP® is one of the leaders in payroll processing services, with more than 1 million clients.¹⁸ In fact, they’re responsible for paying 1 in 6 workers in the US.¹⁹

ADP divides it services into three categories, depending on the size of your business:

• Small - 1-49 employees
• Midsized - 50-999 employees
• Large - 1000+ employees¹⁸

It provides the whole range of HR solutions, payroll processing, tax compliance, and employee benefits. For example, it offers small business PEO and outsourcing solutions such as one-click posting to the top 100 leading job boards.²⁰

The only downside to RUN powered by ADP is that they’re not transparent with their pricing. All plans are quote based, making it difficult to judge its value compared to other providers.²¹

Wise Business

If running international payroll is a key part of your business, then a Wise Business account can be a great option for you.

With Wise Business’ batch payments tool, you can send up to 1,000 international payments in one click. On top of this, when paying employees and contractors abroad, your money will be converted at the real, mid-market rate.

This saves you on hidden fees and exchange rate mark-ups. Additionally, paying your employees and contractors abroad won’t incur any cross border fees, as you can pay them in their own currency.

With Wise’s API, you can automate high volume international payments to save you time and make your operations run smoother.

Discover how Wise payroll can save
time and money

Opening a Wise Business account is free of monthly subscription fees. You can also get 10 local account details for a simple one-time fee in the US.

With transparent, low fees and a competitive exchange rate, Wise is great for small to medium-sized businesses. Manage international payroll with ease while saving money for your business.

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Sources:

1. What Is a Payment Gateway? (And Why You Don't Need One)
2. What Is Square POS? A Guide for Small Businesses
3. Payroll tools & features | Square
4. Square Payroll FAQ | Square Support Center - US
5. Square pricing
6. Square Payroll Features & Billing
7. Square Team App for Payroll Subscribers
8. Square Payroll + Cash App
9. Payroll Features to Manage Your Team
10. Employee Benefits for Small Businesses | Square Payroll
11. Square and SimplyInsured
12. Square and Guideline
13. Square and Next Insurance
14. Square Payroll Tax FAQ
15. Gusto
16. HR Software and solution for business | Gusto
17. Gusto Pricing
18. ADP
19. HR Services: The Support & Tools You Need | ADP
20. HR for Small Business | ADP
21. Small Business Payroll Services | 1 - 49 Employees | ADP

All sources checked March 22, 2023.