Square Payroll Pricing Guide 2023

Square Payroll pricing takes the form of two different systems. The first is for businesses that employ both contractors and standard employees – this costs $35 a month, plus $5 for each employee and contractor. The second pricing structure is for businesses that exclusively employ contractors – this is free, save for a $5 charge for each contractor you pay.

The affordability of Square Payroll shouldn’t turn you away – just because it’s cheap, doesn’t mean it’s cheaply made. It’s a very well-equipped piece of software that is absolutely worth any small business’s consideration.

With other payroll software options, you can find yourself spoiled for choice, with numerous plans and price points leading to a bit of decision paralysis. However, with Square Payroll, the choice pretty much boils down to “do you want it or not?” – which is a much easier question to answer.

Let’s look at Square’s two payroll pricing plans, and see what they offer.

On this page:

• Square Payroll pricing structure
• Are there any hidden costs?
• Square Payroll features
• How does Square compare to other payroll software?
• Frequently asked questions

How Is Square Payroll Pricing Structured?

Square Payroll is simple – you can either pay both employees and contractors, or exclusively pay contractors. Full features are included in both plans.

Square Payroll for Employees and Contractors

Square’s standard employee payroll plan costs $35 a month, plus an additional $5 for each employee or contractor you pay through the software. It allows you to not only pay your employees, but manage their state and federal tax deductions as well.

As an affordable payroll software, it does its job well. You can run it unlimited times a month without incurring any extra charges, which is very impressive, especially for such a low price. Setup is free of charge, so it’s very much an entry point into the world payroll software – so much so that there are no options to migrate data from another provider.

As far as employee limits go, there are no limits stated by Square. However, this product is intended for smaller businesses, so if you employ dozens and dozens of employees – or are looking to greatly expand your business – you might want to consider an option with larger limits, like Heartland Payroll or Dominion’s iSolved People Cloud.

Something to note is that Square takes four days to process payroll, so you’ll need to be on top of salaries and hourly workers a few days before payday drops. If this is a deal-breaker, you might want to look at a faster software, like Paychex Flex or QuickBooks’ Elite and Premium tiers, which all support same-day direct deposit. We go into more detail on Square Payroll features later in this article.

Square Payroll for Contractors Only

Square’s Contractor plan costs no monthly fee. Rather, it costs $5 each time you pay a contractor through the software.

This plan is essentially identical to the Employee and Contractor plan, with the sole exception of not being able to pay W-4 employees. This plan is intended to be used exclusively to pay 1099 contractors.

Make sure you don’t opt for this plan, then try to use it to pay W-4 employees. Not only will it not work, but paying an employee with methods intended for a contractor can bypass some taxes, which could mean you’re breaking a federal or state law.

Does Square Have a Free Plan?

There is no free Square plan for paying employees. However, as mentioned above, Square’s contractor plan is entirely free – you’ll only need to pay $5 each time you pay a contractor.

This means you can use that version of the software for free for as long as you want, before you begin paying people, so you can spend weeks getting to grips with navigating the interface without paying a penny. Effectively, it's an extensive free trial.

If it's free payroll software you're after we've got you covered. Check out our free payroll software guide to discover our top picks.

Are There Any Hidden Costs or Fees?

As a lovely breath of fresh air, there aren’t many hidden costs behind Square Payroll. In fact, there is only one thing that could be considered a hidden cost: time-tracking functionality, which you’ll need if you employ hourly employees.

Like Quickbooks, Square also offers POS software, and time-tracking requires integration with Square POS as well as the Square Team app. The Team app is free from the get-go, but the POS App is a bit trickier.

Square POS is free to set up but charges transaction fees for use, and requires a mobile device. Technically you will have to buy some hardware to use it, but Square offers the first mobile card reader for free, then subsequent hardware can vary in price depending on where you buy it. Costs can range from $49 for a basic contactless Square reader, up to $799 for a fully functional Square register. You can find out more in our 2023 Square POS Pricing Guide.

On the whole, you won’t find yourself being nickeled and dimed by Square – pay the standard pricing fees discussed above, and you’ll be good to go.

Square Payroll Features

Despite the low price, Square doesn’t cut corners. The software comes bundled with a good amount of features that can expand its functionality beyond a simple payroll service.

When it comes to employee self-service, employees can view their pay stubs through a web portal. However, there is no app for employees, which is a feature offered by other platforms like Paychex and Gusto.

And while Square doesn’t offer much benefit management aid in the form of ACA reporting or employee self-service, they do have partnerships with 401(k) provider Guideline, workers’ compensation provider AP Intego, and health insurance provider SimplyInsured, which can all offer you quotes through Square.

Users can also create tax reports, as well as custom and premade analytics reports. And while HR isn’t Square’s claim to fame, they still offer an easy way to store employee documents and onboarding documents.

How Does Square Compare to Other Payroll Software?

Square Payroll is the cheapest payroll software we’ve found. So if other products can’t beat Square at the price game, where else can they gain an advantage? Well, Square’s two weakest areas are its benefits management system and its HR resources.

Firstly, when it comes to benefits management, Square doesn’t offer much at all. There is no self-service benefits enrollment, and no ACA reporting either. It's not completely helpless, though – Square does have partners when it comes to 401(k)s, workers compensation, and healthcare, but these are all external services, so will need to be organized through Square’s partners, not Square itself.

Compare this to payroll software Gusto (with a base rate from $40 to $60 per month, and custom options available too), which includes ACA reporting, self-service benefit enrollment, and workers compensation and healthcare quotes that can be organized directly through Gusto. This comparison shows how much Gusto can help to streamline benefits.

And if HR resources are a big ticket item for you, Square does offer the ability to create employee profiles and store their important legal documents, but doesn’t go much further.

ADP’s RUN software (bespoke pricing) and QuickBooks’ Elite ($125 a month) plan both offer these functions, while also allowing you to create HR handbooks, and even consult a HR professional for advice. If you’re shaky on your HR knowledge, these services can be a game changer, elevating this software to stand in direct opposition to Square.

Square also only supports a single integration – QuickBooks Accounting. This can be a downer if you’re looking to integrate Shopify or some other useful add-on, but QuickBooks Accounting is still very useful on its own, as it can manage the rest of your business’s finances beyond payroll.

However, keep in mind that making these comparisons can be a bit unfair due to the fact that, again, Square is incredibly cheap. You’re trading these functions away, but also spending significantly less, so it’s definitely a trade off.

Frequently Asked Questions