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
To enable your Square Balance, you must have a Square Payments account. It’s free to activate and you don’t need to process credit card payments in order to use this feature.
Activate a Square Payments account by logging in with your Square Payroll credentials and following the prompts to complete set up. Once your payments account is activated, you will automatically have a Square Balance.
Note: Payment account activation is subject to Square review and approval. To use Instant Payments, you must also complete one pay run through Square Payroll first.
Set up your funds
If you already process credit card payments with Square or plan to in the future, you can start storing funds in your Square Balance by ordering a Square Card or switching to a Manual transfer schedule.
If your transfer schedule is set to Automatic, funds will automatically transfer out of your Square Balance each day and you’ll need to add funds to your Balance every time you run payroll.
Note: You are able to add up to $2,000 per day to your balance for payroll processing. Sellers that are new to Square will have a $500 per day limit, which can increase as you process more payments with Square.
To set your transfer method to Manual:
Log into your online Square Dashboard and navigate to Balance.
Select Transfer Settings.
Under Transfer Schedule, click Manual > Save.
To add funds to your Square Balance:
Make sure you have an external debit card linked. You can confirm this by going to the Balance tab > Transfer Settings > Instant Transfer.
On the Overview screen, select Add Money.
Select the amount you want to add, up to $2,000 per day.
Select Square Balance as a payment source
To select a payment source for your payroll net pay debits:
In your online Square Payroll dashboard, navigate to Settings > Bank Account.
Select Square Balance as your payment source for team payments.
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.
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: If you choose to process payroll immediately, you will not have the option to cancel the pay run once it has been confirmed.
If you are interested in Square Card, you’ll have instant access to the money from the payments you process with Square while avoiding recurring fees and bank transfers.
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.
To pay all team members via manual payment:
Go back to the first page of the payroll run.
Under Schedule Payment, select Manual Payment.
To 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.