Switching Payroll Providers
Interested in transitioning your payroll services to Square Payroll? Our team makes it simple and easy to change providers, regardless of the time of year.
Watch the video below for a detailed walkthrough of onboarding to Square Payroll and sending your first pay run, then follow the instructions in this article.
Transition to Square Payroll in 3 steps:
Step 1: Gather your required business information
Legal business name, business type, and address (as registered with your EIN)
Year-to-date (YTD) gross pay for each of your employees (not necessary if you are switching at the beginning of the new year)
Payroll reports from your prior payroll provider. Learn how to pull reports from prior payroll providers Here’s how you can pull those reports.
Employee and contractor email address (if you are enabling employee online accounts)
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Employee and contractor details:
Physical mailing address
Social Security Number
Tax withholding information
Email address (You can send them an invitation so they can fill out their tax and direct deposit information themselves)
Former W-2 employee details so we can generate their W-2s at the end of the year
When setting up your account, please provide previous payroll records for the current tax year to Square Payroll. This information is required to ensure accurate tax withholding and reporting for current and past employees that are added to Square Payroll.
You can upload this report to your payroll dashboard. If you need help locating your report, you should be able to ask your prior provider for directions on how to pull this report, or you can contact support or further assistance.
If you have 1099 contractors in addition to W-2 employees, read more about transferring historical contractor payment information for accurate reporting on Form 1099-NEC.
The start of the year is the best time to switch because you won’t have to go through the hassle of collecting all your year-to-date and quarter-to-date information from your old provider or from your own records if you run payroll on your own. Your new payroll provider can start fresh for the new year.
To simplify the switching process, make sure your last pay date of this year is with your old provider and your first pay date of the new year is with your new provider.
Step 2: Go to squareup.com/payroll and click Get Started
If you already have a Square account, log in to your Square Dashboard and select Payroll.
Enter your business information.
Enable two-step verification to protect your account from unauthorized access and to add an additional layer of security.
Once you land on the Payroll overview page, enter your tax information. We need this to file and pay taxes on your behalf.
Create profiles for each team member, and define their jobs and level of access. Add your W-2 employees and/or 1099 contractors to Square Payroll. Learn more about W-2 employees employees and/or 1099 contractors.
Link a bank account. Salaries and tax payments are withdrawn from this account. You can easily link via Plaid, which verifies your bank account instantly.
Select your pay schedule and details, such as pay frequency and pay period start and end dates. If you link your account with Plaid, you should automatically qualify for two-day direct deposit speed (instead of the standard four-day speed).
Upload your year-to-date payroll records.
Step 3: Close your old payroll account
Save all payroll and employee records. This includes breakdowns of your quarterly (QTD) and year-to-date (YTD) gross pay and prior state and federal tax filings. Note: Some payroll providers restrict access to this information after you close your account, so make sure to download or ask for this data before canceling.
Maintain your employee records. Square Payroll generates W-2s for all employees you paid within the calendar year, including those who are not currently working for you. We need to have your employees’ addresses, social security numbers (SSN), and YTD gross pay with tax breakdowns to ensure their W-2s are accurate.
If you switch in the middle of a quarter, clarify which tax payments and filings your former payroll provider is making on your behalf. Your previous provider should refund quarterly taxes collected but not submitted to the IRS and/or state (SUI, FUTA, and ETT) to you. Square Payroll will recollect and submit those specific taxes on your behalf. Your prior provider should pay any federal and state income taxes collected. Contact us if they do not so we can be sure your payments are up to date.
Learn more about Square Payroll’s features.