Set up Square Payroll
About Square Payroll
Signing up for Square Payroll is quick and easy, even if you’re switching payroll services in the middle of the year. We do not require you to process payments or use any other services with Square to use Square Payroll.
Before you begin
You can sign up for Square Payroll from a web browser.
To sign up for Square Payroll, you and your employee(s) will be required to provide personal information, such as an address and Social Security number, as well as tax withholding information required for Form W-4.
Square Payroll is currently only for businesses that file Form 941 or Form 944. Square Payroll does not support paying household employees or agricultural employees.
To sign up, we recommend having this information ready:
Federal Employer Identification Number (EIN).
State employer tax Information.
Business type.
Legal business name and address (as registered with your EIN).
Bank account details for payroll withdrawals.
If you’re switching payroll services midyear, we also need the following information:
Your employees’ first and last name
Your employees’ email address (used for direct deposit set up), Form W-4 (if paid by check or if you want to enter this information yourself), and state withholding form (if your state has employee income withholding).
Employee details for former employees that you’ve paid this year
Payroll reports from your previous payroll provider
If you update your business type, the IRS may issue your business a new Employer Identification Number (EIN). In this situation, you’ll need to create a new Square Payroll account to pay your team members. When your EIN is updated, tax caps will reset and Form W-2 will need to be filed for each of your W-2 employees through both EINs.
You can set up Square Payroll with no previous payroll history or by switching and uploading your previous payroll provider history. If you don’t have a Square account, create one first. Learn how to set up your Square account.
Set up Square Payroll
If you have no previous payroll history from another provider, you can add your tax information, verify an authorized signer, link a bank account, add your team, and set your pay schedule.
Sign up for Square Payroll from your Square Dashboard.
Navigate to Staff & payroll > Payroll > Setup.
Add your tax info. Enter your business information, including your business name and type, address, and business locations. If you process payroll across different states or multiple tax jurisdictions, provide your business’ tax account information for each location. Make sure your information is accurate and up to date. We may be unable to make tax payments or filings if the information you provided does not match what is on record with the IRS and/or your state employer tax agency. For assistance, visit our Square Payroll state tax resources.
Link the bank account you want to use for Square Payroll. If you are signing up with an existing Square account you can choose to use your existing linked bank account, link a separate bank account exclusively for Square Payroll, or use instant payments. With instant payments, you can choose to have your team member’s direct deposit debits come from your stored balance. You will still need to link a traditional bank account for tax debits.
If you manually link your bank account, Square Payroll will deposit and then withdraw two small amounts from your bank account as a security measure to ensure that the account you linked belongs to you after confirming your bank details. If using a traditional bank account, you are unable to process payroll until you have confirmed the security deposit amounts. Learn how to verify your Square Payroll bank account.
Authorize Square Payroll as your Reporting Agent and, if your state requires it, provide us with Power of Attorney (POA). This authorizes us to pay and file taxes on your behalf and will be submitted to the IRS. The information entered must match your EIN data. If you are switching payroll providers midyear, Square Payroll requires additional information regarding your previous payroll history.
If you’ve paid a team member this year, and they are a W-2 Employee, enter their year-to-date gross wages. If your team member was previously paid as an independent contractor, enter $0.00. Do not estimate this value — provide the exact amounts including any additional pay such as bonuses, commissions, and cash tips. This information is critical to ensure your employees’ taxes are calculated correctly.
If you have former W-2 employees who you paid within the current year, they will need to be created within Square Payroll to ensure accurate W-2 filings. We file W-2s for all employees paid within the current calendar year. Square Payroll does not contact employees who no longer work for your business.
Add previous payroll history. Provide your payroll history details from your prior provider. If you are switching from another provider, upload any filings and/or paycheck reports you have.