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June 6, 2024
XX min read

How to Use Square Payroll: A Comprehensive Guide


Square Payroll is an online payroll service trusted by small businesses to streamline their payroll processes and ensure compliance with federal, state, and local regulations. Designed to simplify payroll management, Square Payroll allows businesses to easily pay employees and contractors, handle tax filings automatically, and integrate with other Square products and third-party applications.

In today's fast-paced business environment, time is a precious commodity. Managing payroll manually can be time-consuming and complex, leading to errors and non-compliance issues. Square Payroll automates these processes, enabling small businesses to focus on growth and employee satisfaction.

Who is Square Payroll for

Square Payroll is ideal for:

  • Small business owners who need a reliable and straightforward payroll solution.
  • Accountants and bookkeepers managing payroll for multiple clients.
  • Contractors and freelancers who want to manage their own payroll.
  • Businesses already using Square's suite of products looking for seamless integration.

Key features

Square Payroll offers a range of features designed to meet the needs of small businesses. Here's a closer look at what it can do:

  • Employee and Contractor Payments: Easily pay employees through direct deposit or mail checks. It also includes a feature for managing contractor payments.
  • Automatic Tax Filing: Square Payroll handles federal, state, and local tax filings automatically to ensure compliance and reduce the risk of penalties.
  • Garnishments and Deductions: Manage deductions such as health insurance, retirement plans, and garnishments with ease.
  • Timecard Integration: Integrates with timecard applications, including Square’s own time tracking tool, to import employee hours and reduce manual data entry.
  • Employee Self-Service: Employees can access their own accounts to view pay stubs, tax forms, and personal information.
  • Benefits Management: Facilitates benefits management by allowing you to offer health insurance, retirement plans, and other employee benefits.
  • Compliance Notifications: Alerts you to changes in payroll regulations to help you stay compliant.

Best use cases

Square Payroll excels in various scenarios, making it a versatile tool across different industries and team structures. Here are some examples:

  • Retail and Hospitality: Managing daily or weekly payments becomes easy with direct integration to timecards and sales data from Square Point of Sale.
  • Healthcare: Efficiently handle payroll for a diverse workforce, including full-time employees, part-time staff, and independent contractors.
  • Construction: Pay contractors and manage varying wage rates and deductions without hassle.
  • Freelancers and Consultants: Handle your own payroll and stay compliant with tax filings and obligations.

Square Payroll also benefits teams in diverse fields:

  • HR Departments: Simplify payroll management and let HR focus on strategic initiatives.
  • Operations Teams: Streamline the operational aspect of payroll to maintain smooth business processes.
  • Accounting and Finance Departments: Facilitate integration with accounting software to ensure accurate financial reporting and audits.

Getting Started

  1. Sign Up for Square Payroll
    • Visit the Square Payroll website and sign up for an account. You’ll need to provide basic business information, including your company's name, address, and employer identification number (EIN).

  1. Set Up Your Business Profile
    • Once your account is created, enter details about your business, including state tax information, pay schedules, and bank account details for payroll deposits.

  1. Add Employees and Contractors
    • Input the necessary information about your employees and contractors, such as names, addresses, and social security numbers. You can also invite them to enter their details directly via employee self-service.

  1. Enter Pay Rates and Schedules
    • Specify the pay rates and schedules for each employee and contractor. Include any applicable deductions or benefits.

  1. Integrate Timecards
    • Connect your preferred time tracking tool to import hours worked. If you’re using Square’s time tracking feature, this integration will be seamless.

  1. Process Payroll
    • Review the payroll summary and run payroll. Ensure all deductions and contributions are accurate. Once approved, Square Payroll will process payments and file taxes automatically.

  1. Review and File Tax Forms
    • Square Payroll will generate and file the necessary tax forms such as W-2s and 1099s at year-end. Employees and contractors can access these forms through their self-service accounts.

Tips and Best Practices

To maximize the benefits of Square Payroll, consider these practical tips:

  • Regularly Update Employee Information: Ensure that employee information is up-to-date to avoid discrepancies in payroll processing.
  • Leverage Employee Self-Service: Encourage employees to use the self-service portal for accessing pay stubs and tax forms, reducing the administrative burden on HR.
  • Track Time Accurately: Use an integrated time tracking tool to import hours worked directly into Square Payroll, minimizing errors and manual data entry.
  • Stay Informed on Compliance: Pay attention to compliance notifications from Square Payroll to stay updated on changes in payroll regulations.
  • Utilize Benefits Management: Offer and manage employee benefits through Square Payroll to enhance employee satisfaction and retention.

Integration with Guru

By integrating Square Payroll with Guru’s AI search capabilities, businesses can unlock even greater efficiency and productivity. Here's how:

  • Centralized Information Access: Guru enables employees to find payroll-related information quickly, whether it’s about pay schedules, tax filings, or benefits without having to navigate multiple systems.
  • Enhanced Knowledge Sharing: Knowledge Management becomes effortless as payroll-related documents and procedures can be stored and searched for in Guru.
  • Streamlined Onboarding: New HR staff can access a wealth of information and training materials about Square Payroll through Guru, ensuring a smooth onboarding process.
  • Proactive Assistance: Guru’s AI search can proactively deliver relevant payroll information and updates to employees based on their queries and actions.


Square Payroll is a powerful tool designed to simplify payroll management for small businesses. With features like automatic tax filing, employee self-service, and seamless integrations, it addresses the complexities of payroll processing and ensures compliance. 

Integrating Square Payroll with Guru further enhances the experience by offering centralized information access, streamlined onboarding, and improved knowledge sharing. Try Square Payroll today and consider integrating it with Guru to elevate your payroll management and overall business efficiency.

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