Set up paid time off and sick leave policies with Square Payroll
About paid time off (PTO) and sick leave
Square Payroll allows you to set up a PTO and sick leave policy for your employees. This can be used to calculate accruals and track the PTO balance for vacation and sick leave policies.
You can choose between two types of tracking: based on hours worked (accrual) or fixed amount. In an accrual policy, your employee earns a certain amount of hours based on the number of hours worked. In a fixed amount policy, your employee receives a set amount of PTO hours.
Employees can track their PTO and sick leave balances on their pay stubs in their Square Payroll team member dashboard. Learn how to update Square Payroll information for team members.
Any remaining PTO or sick balances for employees automatically roll over to the new calendar year. If you need to reset an employee’s PTO and/or sick leave balances, we recommend resetting these prior to sending your first pay run of the new year.
Before you begin
You can set up PTO and sick leave policies from your Square Dashboard from either a team member profile or your Square Payroll settings.
You can set up policies for eligible W-2 employees. You can set up unique PTO and sick leave policies for each employee, but each employee can only have one PTO and one sick leave policy assigned to them.
Overtime and double time hours count towards PTO and sick leave accrual on a 1:1 basis (they do not count 1.5x or 2x). Check your state and local laws for accrual rate, sick leave pay rate, and usage increment requirements.
Set up or adjust PTO policy
You can set up or adjust the PTO policy for your team from individual employee profiles or from your Square Payroll settings. Updating an employee’s PTO balance and/or policy only applies to future pay runs and will not affect past pay runs or pay stubs.
You can set up or adjust PTO policies for each employee from their team member profile.
- Sign in to your Square Dashboard and select Staff & payroll > Team > Team members.
- Select the employee you want to set up or adjust a PTO policy for.
- When the team member panel opens, select Payroll and go to Employment.
- Under Paid Time Off (PTO), toggle on Track paid time off.
- Select a tracking method from the drop-down menu: Based on hours worked or Fixed amount.
- If you select Based on hours worked, enter the number of hours your employee should work for each PTO hour earned, enter the Current balance, and set an optional accrual limit for how much PTO an employee can accrue.
- If you select Fixed amount, enter their total PTO hours into the Current Balance field.
- Select Next to save.
In your Square Payroll settings, you can set a PTO policy that will apply to any new employees you add to your team.
- Sign in to your Square Dashboard and select Staff & payroll > Payroll > Settings.
- Go to Paid Time Off (PTO) and toggle on Track paid time off for new employees.
- Select a tracking method from the drop-down menu: Based on hours worked or Fixed amount.
- If you select Based on hours worked, enter the number of hours your employee should work for each PTO hour earned, enter the Current balance, and set an optional accrual limit for how much PTO an employee can accrue.
- If you select Fixed amount, enter their total PTO hours into the Current Balance field.
- If you want to apply this PTO policy to any existing employees without a PTO policy, select Apply to current employees without PTO settings.
- Select Save.
Set up or adjust sick leave policy
You can set up or adjust sick leave policy for your team from individual employee profiles or from your Square Payroll settings. Updating an employee’s sick leave balance and/or policy only applies to future pay runs and will not affect past pay runs or pay stubs.
You can set up or adjust sick leave policies for each employee from their team member profile.
- Sign in to your Square Dashboard and select Staff & payroll > Team > Team members.
- Select the employee you want to set up or adjust a sick leave policy for.
- When the team member panel opens, select Payroll and go to Employment.
- Go to Sick Leave and toggle on Track sick leave.
- Select a tracking method from the drop-down menu: Based on hours worked or Fixed amount.
- If you select Based on hours worked, enter the number of hours your employee should work for each sick hour earned, enter the Current balance, and set an optional accrual limit for how much sick leave an employee can accrue.
- If you select Fixed amount, enter their total sick hours into the Current Balance field.
- Select Next to save.
In your Square Payroll settings, you can set a sick policy that will apply to any new employees you add to your team.
- Sign in to your Square Dashboard and go to Staff & payroll > Payroll > Settings.
- Go to Sick Leave and toggle on Track sick leave for new employees.
- Select a tracking method from the drop-down menu: Based on hours worked or Fixed amount.
- If you select Based on hours worked, enter the number of hours your employee should work for each sick hour earned, enter the Current balance, and set an optional accrual limit for how much sick leave an employee can accrue.
- If you select Fixed amount, enter their total sick hours into the Current Balance field.
- If you want to apply this sick leave policy to any existing employees without a sick leave policy, select Apply to current employees without Sick Leave settings.
- Select Save.
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