Square specializes in serving small and mid-size businesses with a suite of convenient services that include payroll processing software and point-of-sale (POS) applications. Users access the Square platform via the Internet, with the basic form of the service providing excellent functionality while supporting detailed customization. Custom options are offered through Square Marketplace, which features hundreds of additional services and integration features that users can individually add to build a service package uniquely tailored to their needs.
Square is headquartered in San Francisco, California and was founded in 2009 by technology entrepreneurs Jim McKelvey and Twitter co-founder Jack Dorsey. McKelvey and Dorsey initially developed Square as a way to allow individuals to accept credit card transactions via a simple smartphone plug-in. The company took its name from the card reader’s square shape.
In 2015, Square launched its payroll processing service. Buoyed by the venture’s success, Square became a publicly traded company in November 2015. Shares are traded on the New York Stock Exchange (NYSE) under the symbol “SQ.”
Square’s full-service payroll platform: standard and optional features
While Square brands itself as “all-in-one payroll software that works with every business,” its design and functionality makes it best-suited to microbusinesses, small businesses, and growing enterprises of small to medium size. The platform’s core features allow users to:
- Pay full-time, part-time, freelance, and contract employees and workers
- Track payroll based on hourly or salaried rates
- Keep tabs on employee hours
- Import tips for service industry workers
- Integrate health insurance and other employee benefits with payroll
- Distribute employee payments via a smartphone app
- Create custom pay schedules and pay periods with no limits
The program’s core features also deliver access to Square’s customer support network. Users can also give individual accounts to employees, who can then view their own payment details.
Like all other reputable and worthwhile payroll services, Square also automates users’ payroll tax obligations. All fund withholdings and tax filings are handled by the system, without the need for further action once the platform is configured.
Square is also very easy to use. Customers can get started in just three easy steps:
- Enter basic information about your business, as prompted. Square will handle everything internally if you’re switching over from another payroll provider.
- Add each employee you would like to pay through Square Payroll, or ask employees to create their own accounts and link them to yours.
- Run your payroll data through the system. Square will collect, withhold, and submit payroll tax funds and automatically distribute payments to your team members.
Square can be customized in endless ways with the hundreds of optional features, add-ons, and integration supports available in Square Marketplace. Some popular highlights include:
- Benefits tracking and distribution for health insurance, workers’ compensation, pre-tax employee benefits, and 401(k) retirement plans
- Expanded payment options including e-checks, direct deposit, cash cards, and app-based distributions
- Data importing, exporting, and customized reporting tools
- Automatic calculation of overtime pay
- Advanced tax tracking, management, and payment features
The service is designed to streamline and simplify payroll processing, and the user-friendly platform is very easy to use, even for beginners.
Square was initially launched as a POS service, and the company has continued to focus on this vertical throughout its rapid growth. One especially useful Square feature is the optional ability to synchronize Square Payroll with a company’s POS system to automatically track employee tips paid by credit card.
The tip-tracking feature also links with Square’s timecard partners, creating complete synthesis of hourly wages and tip earnings. Employees don’t have to worry about declaring credit card-based tips on their income tax, since they are automatically tracked. Businesses don’t have to manually add credit card tips to their payroll tax calculations, since the software handles it automatically.
Costs and pricing
Unlike many other major payroll processors, Square is very up-front and transparent about its pricing policies. The basic service costs $29 per month plus $5 per employee. Thus, a small business with 10 employees on its payroll would pay $79 per month or $948 per year for core services. Contractors working on a 1099 basis also cost the same to add—just $5 per person per month.
Add-ons and optional features are charged a-la carte style, so they will impact pricing in various ways. Square does not try to hide its costs or bury hidden fees in the fine print, and new users do not have to pay anything until they have used Square to manage at least one payroll cycle. Square also automatically adjusts users’ payment obligations if the number of paid employees varies from one cycle to the next. Thus, if you had 10 employees on your payroll last time around and this time you pay just nine, Square will automatically adjust your charges down by $5.
Pros and cons
Square enjoys an excellent reputation, and has earned many positive reviews from both professionals and actual users. These reviews tend to highlight a similar set of helpful features that count among the platform’s distinct advantages:
- Fair, transparent costs and pricing
- Ideal scalability
- Automatic timecard importing and overtime tracking
- Online synchronization with QuickBooks accounting tools
- Excellent employee onboarding and management tools
- Highly convenient for service industry businesses, as it supports advanced tip tracking features
Complaints about Square are relatively scant and minor, but its drawbacks include:
- A lack of 24/7 telephone customer support
- It can be difficult to access advanced details about employee pay histories without specialized add-ons
Given the platform’s rapid growth and the way its pros far outweigh its cons, Square comes highly recommended by expert observers and users alike.
Is Square a good match for your business?
Square provides excellent value and predictable pricing, making it an excellent option for startups and cost-conscious small businesses. Many industry observers also cite it as the best available payroll processing tool for microbusinesses, as its costing model starts at just $34 per month for one employee and increases in $5 per person increments from there. This delivers outstanding bang for your buck.
Fast-growing mid-size businesses with hundreds of employees and large enterprises may find more utility from a payroll processor that bundles human resources and talent recruitment support and other advanced features in with payment distribution services. However, if you don’t need to add these external services, Square is hard to beat and represents one of the very best options on the market.