Instant Payments through Square Payroll
With Square Payroll, you no longer need to submit payroll 4 days in advance. By enabling Instant Payments, you can store and use the funds in your Square balance to pay your team faster. You can also choose to hold on to your funds longer and run payroll as little as one business day prior to your employees’ pay date. With Instant Payments, your team will receive their pay on the next business day with direct deposit or instantly when they use Cash App, even on weekends.
How to set up and use Instant Payments
Enable your Square balance
If you already process credit card payments with Square, you can start storing funds in your Square balance by switching to a Manual transfer schedule. You can also choose to apply for a Square Checking account as another way to start storing funds with Square.
If your transfer schedule is set to Automatic, funds will automatically transfer out of your Square balance each day and you will not be able to use your Square balance as a funding source for payroll.
To set your transfer method to Manual:
1. Log into your online Square Dashboard and navigate to the Balance tab.
2. Select Transfer Settings.
3. Under Transfer Schedule, click Manual > Save.
Select Square balance as a payment source in Payroll
To select a payment source for your payroll net pay debits:
1. In your online Square Payroll dashboard, navigate to Settings > Bank Account.
2. Select Square balance as your payment source for team payments.
3. Press Save.
Note: Only direct deposit net pay amounts can be debited from your Square balance at this time. You will still need to have a traditional bank account linked for other debits including payroll taxes and benefits.
Run payroll
Once your Square balance is set up as your payment source, when you run payroll you will have the option to send payments immediately or on the scheduled pay date. If you choose to process immediately, team members paid via direct deposit will receive their pay on the next business day. Team members that use Cash App will receive their pay instantly, even on weekends.
Note: Instant Payments cannot be used on the first run. If you choose to process payroll immediately, you will not have the option to cancel the pay run once it has been confirmed.
What to do when you don’t have enough funds in your Square balance
If you run payroll and the total net pay for you team is more than your available Square balance, you will need to either add funds, pay all team members via manual payment, or revert to your linked bank account.
Add funds to your Square balance
You can add funds to your Square balance via a debit card or bank account. However, you must first convert your Square balance to a Square Checking account. To apply for a Square Checking account:
1. Go to the Balance applet in your Square Point of Sale app or Dashboard and select Square Checking.
2. Select Open account and verify your information.
3. Personalize your business debit card.
4. Confirm the shipping address for your business debit card.
To add funds via a debit card:
1. Make sure you have an external debit card linked. You can confirm this by going to Balance > Transfer Settings > Instant Transfer in your online Square Dashboard.
2. On the Overview screen, select Add Money.
3. Select the amount you want to add, up to $2,000 per day. Sellers that are new to Square will have a $500 per day limit, which can increase up to $2,000 as you process more payments with Square.
4. Press Add.
Pay all team members via manual payment:
Go back to the first page of the payroll run.
Under Schedule Payment, select Manual Payment.
Press Continue.
Revert to your linked bank account:
Exit out of the run payroll flow.
Navigate to Payroll > Bank Account.
Under Payment Sources, choose your linked bank account instead of Square balance as your payment source for Team Payments.
Depending on when you run payroll, your team members’ pay date may be delayed.