Set up the Automated Sales Tax Folder in Square Savings
About the Automated Sales Tax Folder
The Automated Sales Tax Folder is a feature within Square Savings that automatically sets aside the sales tax collected on eligible card sales into a dedicated folder. Instead of manually calculating and reserving your tax funds, the system sweeps sales tax funds from each transaction based on your existing tax settings.
When you process a card sale, the sales tax amount (based on your configured tax rate) is automatically moved into the Sales Tax Folder within your Savings account. The folder uses your existing sales tax settings – no separate percentage needs to be configured. If you have multiple locations and different tax rates, the amounts are automatically swept into one dedicated Sales Tax Folder.
Before you begin
You can set up the Automated Sales Tax Folder from your Square Dashboard.
The Sales Tax Folder currently sets aside tax from card sales only. Other payment types (cash, checks, invoices, etc.) are not included in the automatic sweep at this time.
If you see an error that a "Sales Tax" folder already exists, you'll need to rename your current folder first, as the automated feature requires exclusive use of the "Sales Tax" folder name. Once renamed, you can proceed with setup.
Note: The Folders tool is provided for your convenience only. We do not provide advice, services, or guarantees through this feature, and you are solely responsible for reviewing and confirming the accuracy, completeness, and suitability of any information before relying on it or using it for reporting, filing, remittance, compliance, or other business purposes, including tax reporting or tax remittance purposes. For any tax-related inquiries in connection with your Account, consult your own tax or legal advisor.
Step 1: Add the Sales Tax Folder
Sign in to Square Dashboard and go to Banking > Savings.
Locate the billboard: "Sales tax – Automatically set aside a percentage of each card sale for Sales tax."
Click ••• > Add folder.
Step 2: Confirm your tax settings
Choose the option that matches your current tax setup:
Option 1: Sales tax is set up and active
Review your active tax rates, names, and percentages.
Click Confirm and add folder.
Your folder is created and sweeping begins immediately. You can view the sales taxes you're saving for in the Automated Savings section.
Option 2: Sales tax is set up but inactive
You'll see your sales tax settings listed as inactive.
Click Edit Tax settings. You'll be routed to the Sales Tax page.
Reactivate at least one tax rate. Your funds won't be swept until a tax rate is active.
Option 3: Sales tax is not set up yet
Click Add Sales Tax Folder. You'll see a confirmation that your Sales Tax Folder is created.
Click Set up Sales tax. You'll be routed to the Sales Tax page.
Configure and activate your tax settings. Once tax is activated, your folder begins sweeping automatically.
Delete the Sales Tax Folder
You can delete the Sales Tax Folder just like any other Savings folder. Learn how to Manage your savings account.