Additional Payroll Terms of Service
Effective Date: April 26, 2021
Posted Date: March 30, 2021
For terms that are effective until April 26, 2021, click here.
We’ve included annotations in the gray boxes below to emphasize certain portions of our terms and help guide you as you read them. The annotations aren’t summaries, so please take the time to read everything!
This page explains our terms for using our Payroll Service and are in addition to the General Terms of Service. By using the Payroll service, you and your company agree to these terms.
These Additional Payroll Terms of Service (the “Payroll Terms”) govern your use of Square Payroll, which provides payroll calculation tools, payment and related tax reporting, and other related payroll services (the “Payroll Services”) offered by Square, Inc. (“Square,” “we,” “our,” or “us”). By using the Payroll Services, you agree to be bound by these Payroll Terms, the E-Sign Consent, and the General Terms of Service (“General Terms”) and all other terms, policies, and guidelines applicable to the Payroll Services, including, but not limited to, the Payment Terms. If you are using the Payroll Services on behalf of a business or entity, you represent to us that you have authority to bind that business or entity to these terms, and that such business or entity accepts these terms. For more information about Payroll, visit our Support Center.
To use Square Payroll, you’ll have to provide us with information about you and your employees and independent contractors. You promise to provide only information that is accurate and that you obtained legally. We will not be liable if you supply inaccurate or incomplete information, if you do not comply with applicable laws, and/or if you fail to make necessary adjustments to wages (such as overtime). We will have no employment, independent contractor, or third party beneficiary relationship with your employees or independent contractors.
You may only use the Payroll Services in the United States. You appoint us as your agent for the limited purpose of providing the Payroll Services, which includes any expedited processing and payment access services, to your employees and independent contractors. You authorize us to provide the Payroll Services to you, your employees, and your independent contractors. To use Square Payroll, you must timely submit information we require to provide the Payroll Services, including your company’s tax information, employee and independent contractor time worked and payment information, as applicable, and other information we may request. You assume sole responsibility for and will ensure that your payroll information, Content, data, documents or materials used, disclosed, entered into or created using the Payroll Service are accurate, reliable and complete, do not violate these Payroll Terms or the General Terms, and comply with the Office of Foreign Assets Control of the U.S. Treasury regulations and all other applicable laws or regulations. You hereby acknowledge and agree that all information you collect and share with Square in connection with the Payroll Services is done in accordance with your legal obligations and complies with all applicable laws.
You are fully responsible for verifying the identity and work authorization of your employees and independent contractors in accordance with applicable law and all of the information you, your employees and independent contractors submit through the Payroll Services, including for any IRS or other penalties due to incorrect, inaccurate, incomplete or outdated information.
You are further responsible for verifying the accuracy, timeliness, and completeness of any personal, wage, payroll or any other information you, your employees or independent contractors provide, directly input via the Payroll Services or any other method, approve, or fail to correct. We are entitled to rely upon, and are not obligated to independently verify, any such information, and you waive any claim against Square arising out of errors or omissions that you have not corrected or requested to correct. We will not be liable for any penalty, interest or other liability that results from inaccurate or incomplete information you, or your employee or independent contractor may supply. You may elect to provide your employees or independent contractors with access to a Square Payroll site where they can provide, view and update work related information and elections. You understand and agree that we merely make such Square Payroll site available to your employees or independent contractors on your behalf as a convenience. Employee and independent contractor access to such Square Payroll site does not create any contract, customer or employment relationship between us and your employees or your independent contractors.
You give us permission to do certain tax and payroll tasks on your behalf. Square Payroll has a lot of tools to help you, but ultimately it’s your responsibility to make sure they work for your business and that you comply with all laws and reporting obligations. When you provide information to us you guarantee you have the right to do so.
In order to use the Payroll Services with regard to your W-2 employees you must complete IRS Form 8655 (Reporting Agent Authorization) naming “Square Payroll, Inc.” as your authorized reporting agent and any other forms or authorizations requested by us. Further, you hereby authorize Square and its affiliates to take actions on your behalf as is necessary to effectuate the Payroll Services. By using Square Payroll, Inc. to pay independent contractors, you hereby authorize Square Payroll, Inc. to make payments and filings, including Form 1099-NEC, on your behalf. You represent and warrant to us that you have obtained all consents necessary under applicable law to provide us with the information required to provide the Payroll Services, including consent to access your employees’ and independent contractors’ bank accounts to process direct deposits of payments and to debit overpayments and payment errors.
You acknowledge that the Payroll Services may not meet all federal, state, and local payroll obligations that apply to your business. You are responsible for your own compliance.
While the Payroll Services provide tools to help you calculate and pay wages and earnings, Square does not guarantee that the Payroll Services perform these tasks in a manner that is consistent with the laws applicable to your business, which can vary by region and can change at any time. Square assumes no responsibility for assuring your compliance with applicable law, including wage and hour laws. Similarly, the Payroll Services may not include all features and functionality necessary to meet the federal, state, and/or local requirements applicable to your business, including but not limited to those pertaining to itemization and issuance of pay statements; overtime calculation and payment; paid sick leave accrual, pay rate, and usage increment requirements; minimum wage laws, wage deduction laws; meal period and rest break premiums; and laws pertaining to the timing of pay (including final pay).
It is your sole responsibility to comply with all applicable laws, including federal, state, and local wage and hour laws. You are responsible for determining whether the Payroll Services meet your business’ payroll and reporting obligations, and we are not providing any legal, financial, accounting, tax or other professional advice to you by providing the Payroll Services. You should consult federal and local government websites and/or consult with qualified counsel to help you with your compliance obligations.
Square Payroll may provide support articles or other content related to payroll. This content is not tax or legal advice.
The Payroll Services may provide support articles or other content on payroll topics. These articles are limited in scope and are only intended as a high-level overview of the topics discussed. The information is current as of the publication date only. Square undertakes no obligation to update these articles for future changes in the law. In addition, laws vary by jurisdiction, and these articles do not attempt to address all jurisdictions; for example, states, counties, or cities often have requirements that differ from federal law. Nothing in these articles is or should be used as tax or legal advice. In particular, these articles cannot be relied upon for the purposes of avoiding taxes, penalties, or other obligations under applicable law. For guidance or advice specific to your business, you should consult with a qualified tax and/or legal professional.
You may need to manually adjust wages.
The Payroll Services calculate overtime based on the rules you set in your dashboard, at 1.5 or 2x the base hourly rate(s) of pay. Other forms of compensation, including commissions and bonuses, are not automatically included in overtime calculations. If your non-exempt (hourly) employee earns these types of compensation, you may need to manually adjust their pay to meet federal and state wage laws.
Similarly, the Payroll Services pay sick leave at the base hourly rate or a fixed amount, according to the rules that you set in your dashboard. If your state and/or local law requires you to pay sick leave at a rate higher than the base hourly rate, you will need to make a manual adjustment to pay.
In addition, if you use Square products for time and/or break tracking for your employees, the Payroll Services do not automatically pay any premium for missed, late, and/or interrupted meal period or rest breaks, as you may be required to do under state law. You may pay meal period and/or rest break premiums manually through the additional pay feature.
There may be other instances where you need to manually adjust pay to comply with laws applicable to your business, and it is your sole responsibility to do so. You may edit any information, including wages, tips, taxes, deductions, contributions, and similar data, using the manual adjustment feature prior to processing your payroll.
To run payroll, we need to get money from your bank account. If you don’t have enough money there, you give us permission to take it from other sources.
You must have a Square Account (as defined in the General Terms) with a linked, verified, ACH-enabled U.S. bank or other depository account. You authorize Square and other authorized third parties to debit your linked account in the amounts necessary to (i) fund your payments (ii) pay any fees or charges associated with the Payroll Services, (iii) pay your payroll taxes, (iv) pay any debit, correction or reversing entry initiated, and (v) pay any other amount that is owing, including for services provided by us to you unrelated to Square Payroll. You will maintain a sufficient balance in your linked account to pay disbursements, fees, payroll taxes or any other amounts due at the time required.
If you have insufficient funds in your linked account to pay amounts due at the time required, or if you refuse to pay, we may (i) recover funds from you pursuant to the Recovery Authorizations you granted to us in agreeing to thePayment Terms(ii) debit amounts from your payroll taxes withheld on your behalf (iii) refuse to pay any unremitted payroll taxes, (iv) discontinue the Payroll Services, and/or (v) immediately freeze, suspend, or terminate your Square Account or access to the Payroll Services.
Employees and contractors may have the option to expedite access to their earnings; Square may transmit funds to a linked debit card or bank account for a service fee or to Cash App for free.
You agree that Square Payroll may provide your employees and/or independent contractors (“Payees”) with “On demand pay,” a feature that allows your Payees, in their sole discretion, to receive an amount equivalent to a portion of their earnings (“Transfer Amount”) in advance of your regularly scheduled payday.. If your Payee selects the on-demand pay feature, they may transfer funds to a linked debit card or bank account for a 1% service fee on the amount of funds transferred early or to Cash App for no service fee. You instruct Square, as your agent for the limited purpose of payroll processing, to transmit their paycheck less the Transfer Amount to your Payee, less the service fee, if applicable. Withholdings will be deducted and remitted from the balance of the Payee’s earnings at the time of the normally scheduled pay run. You acknowledge that if and when available, this on-demand pay feature is offered to your employees at no additional cost to you.
To the extent On-Demand Pay is available to your Payees, you acknowledge that Square provides this feature as a convenience for your Payees to use at their voluntary election, and you will not in any way require any Payee to utilize this service.
If an employee or contractor asks you for payroll information, you agree to provide it. You also agree to cover us for any liability that occurs if you don’t.
You agree to provide any information to your employees or independent contractors that such employee or independent contractor requests either directly from you, or requests from Square. If your employee or independent contractor requests their personal payroll information from Square, for example, a copy of their pay stubs or timecards, Square will fulfill the request (to the extent we have retained the information subject to our data retention policy) to the employee or independent contractor and will provide you with 24 hours advance notice to the email address associated with your Square Account. You agree to indemnify and hold Square harmless from any liability resulting from your failure to respond to such requests for information.
While we help in filing your taxes, ultimately it’s your responsibility to pay them and to make sure they get filed correctly and on time.
Important Tax Information: Please be aware that you are responsible for the timely filing of tax returns and the timely payment of taxes for your workers, even if you have authorized us to file the returns and make the payments. Therefore, the Internal Revenue Service recommends that you enroll in the U.S. Treasury Department’s Electronic Federal Tax Payment System (EFTPS) to monitor your account and ensure that timely tax payments are being made for you. You may enroll in the EFTPS online at www.eftps.gov, or call (800) 555-4477 for an enrollment form. State tax authorities generally offer similar means to verify tax payments. Contact the appropriate state offices directly for details.
As your service provider, we rely on you to obtain consent from your employees and independent contractors for Square to provide the Payroll Service.
Square is processing your employees’ and independent contractors’ personal information on your behalf in order to provide these services. You agree to obtain any necessary consent from your employees and independent contractors for Square to provide the Payroll Service and to process personal information. You acknowledge and agree that Square may transfer personal information over international borders as necessary for processing in accordance with Square’s standard business practices, and consistent with Square’s Privacy Notice for Sellers’ Employees.